by Michael Sansolo
In "The Tempest," William Shakespeare wrote: “What's past is prologue,” reminding us that what happened before frequently sets the context for whatever happens next. Sometimes, though the past gets forgotten far too fast, taking with it valuable lessons that suddenly we all need.
Just last week, I had a sense of that while talking to a crowd of retailers in northern California. With the nation, and obviously supermarket operators, grappling with inflation for the first time since the early 1980s, I asked the crowd how many were actually working back then. In a room of maybe 250 people five hands went up including my own.
The lesson is simple: most working people and, of course, most consumers, are actually facing inflation as adults and business leaders for the first time in their careers. And while the causes and landscape are starkly different this time than in the late 1970s and early 1980s, there remain lessons we need to learn from the past and pretty quickly.
First off, let’s accept that 2022 is a world removed from 1981. Forget the obvious that back then the Internet wasn’t really a thing, smart phones didn’t exist and Amazon was just a river. Consider this: in 1981, the nation’s largest retailer was Sears and Walmart was merely a regional operator. In the supermarket industry, there were no Walmart Supercenters, Safeway was the industry’s giant and the Great Atlantic and Pacific Tea Company (A&P) was becoming ever less great on the road to obsolescence.
Today’s retailers face a raft of challenges that were unthinkable back then, especially the ability for shoppers to price check items in multiple stores from handheld devices. In addition, today’s marketplace includes extreme value operators such as Aldi, Costco, the array of dollar stores and, if I didn’t mention it yet, Walmart.
Plus the nation is still emerging - in fits and starts - from the shadow of the Covid pandemic, which is still impacting supply chains and labor.
In other words, the current situation could make one nostalgic for the late 1970s (minus the disco music, of course). But I believe there are lessons from that previous era that should be considered.
First, private label products today are a force for quality and differentiation. The late 1970s era gave us black-and-white generics, long derided for their lack of quality, consistency and style. Consumers may go looking for extreme value again, but it would be a horrendous mistake to bring back an era of spotty products that were more a punch line than a solution.
Second, in the years following the earlier era, the industry learned painful lessons about losing competitiveness. There are so many elements of inflation you cannot control, but you can look to create cost savings by eliminating any points of friction and inefficiency in your stores and supply chains. Recognize that many of your competitors will be taking a hard look at those same costs in hopes of finding small savings that can add up to big advantages.
No doubt there are many more lessons from the past that can provide some guidance in this new era and it’s time to seek them out and fast. While past indeed may be prologue,
we also know that, in the words of George Santayana, “Those who cannot remember the past are condemned to repeat it.”
Let’s hope that doesn’t include disco!
Michael Sansolo can be reached via email at email@example.com.
His book, “THE BIG PICTURE: Essential Business Lessons From The Movies,” co-authored with Kevin Coupe, is available here.
And, his book "Business Rules!" is available from Amazon here.