Use Your Fear to Your Advantage

Are you afraid, retailer? The Conference Board says that confidence among your U.S. consumers dropped about 19% from January to February. German business confidence fell, with Investors Business Daily attributing the drop to weak retail sales and adding that other European countries are reporting low consumer confidence and/or weak consumer spending.
     Even if your retail business is doing nicely, an aura of fear can disrupt optimism. Although retail sales in Australia rose 1.1% from the third calendar quarter to the last calendar quarter of 2009, Business Week headlined an article “Australian Retail Sales Unexpectedly Decline 0.7%,” talking about only December.
     Fear can immobilize a retailer, preventing them from taking actions necessary to stay on top of events. Fear can shut down the creative thinking needed to navigate through setbacks.
     But realize, retailer, that fear also can help you move fast and think sharply. The trick is to keep the fear manageable. A century ago, psychologists Robert M. Yerkes and John Dillingham Dodson sketched out what became known as the Yerkes-Dodson law. In terms of retailing management and fear, the law becomes "As fear builds in a retailer, the quality of their thinking and the effectiveness of their actions improves. To a point. Past that point, as fear builds further, the quality of the retailer’s thinking and actions drops fast."
     If your fear seems to be getting too high, switch to a less demanding retailing task briefly. Research indicates that success there causes the fear to decrease.
     In the diagram, the green curve shows what happens to the quality of retailer performance for difficult tasks as fear increases. The gold curve shows the same, but for less demanding tasks. Notice that at the point where the green curve starts to go down sharply, the gold curve stays up a while longer.