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|Congratulations to Fleur De Lys (Dan Jablons and Dave Leib) in Costa Mesa, CA, for receiving the honor of being named one of the Top 50 Retailers in the COUNTRY!|
|And the winner is....For the 2nd year in a row Mimosa Rose of Katy, Texas (Cathy Wagner) has been awarded the Living Magazine's Reader Choice Award of Best Women's Store!|
|Happy Dog Barkery (Robert Buffo) was recently featured on the Chicago news for its healthy and delicious dog treats! The adorable dog featured, Kale Chips, was rescued and saved by Happy Dog Barkery. Great story! Click here and see the "Happy Dog" for yourself.
My first encounter with narrow and deep merchandise strategy was watching The Limited eat our lunch. It was in the spring in the mid or maybe late 1970’s and the category was dresses. They, The Limited, brought in a handful of styles in a variety of colors, but lots of them. I worked in the family business and we competed with them in all the local malls that were springing up in the suburbs of Northeastern Ohio. We, on the other hand, had a wide variety but shallow depth. Many styles from many vendors and not deep in any of them, and relied heavily on reordering key styles in the season. I watched in amazement (they were directly across the mall from our store) as women were buying 2 or three dresses each in what appeared to me as a handful of styles. I recall 6-8 different colors and each color in a few different fabrics. For some reason, I still remember the chambray dress with a ruffle trim at the bottom. There were racks and 4 ways covering the front third of the store. The presentation made a statement. There was a selling frenzy across the mall, and I looked back at our stock that we tediously curated and seemingly no one wanted. The lesson continued as they consumed market share with the 10 button Henley (that they took right under the nose of the GAP) and the Forenza V neck sweater. A sweater we carried for years from a company I recall was Di Di Scott (not sure of the spelling) and we had sold only marginally well. The Limited knew how to create a look, get behind it and knock it out of the park. It did not take long to learn the lessons of The Limited and what a powerful strategy they had uncovered. So much for the myth that, “my customers don’t want to look like each other.”
Some say we are now in an “Uber” deep and narrow merchandising cycle. A few Sku’s can dominate a classification and a few styles in a narrow array of colors and fabrics can be significant. One client remarked that a single shirt represented $750,000 in revenue last year with almost no markdowns. We have found this type of merchandising to be true in almost every market we cover.
As you prepare for market, think about where you can go to be narrow and go deep. There is a risk associated with this strategy. There is a risk as well in wide and narrow, when you sell 2 out of three and the other styles don’t sell.
Ken Rodriguez, Management One™ affiliate and former merchandising executive for a billion dollar specialty retail chain says,” Narrow and Deep” should NOT be trendy, but rather transcend and compliment trends. These items aside from naturally narrowing the assortment because of deeper buys, also compliment the balance of the "Wide and Narrow" fashion buys that will also be a part of the assortment. They help sell that last "One" of the three.
Ken further advises “that buying narrow and deep in core classes eliminates duplication of similar items. Why have the same pant or jean body from a variety of vendors when you can establish and validate the vendor YOU chose as the Best. If you believe in it, then so will your customer! You validate your choices by the commitment you make and your customers will follow your lead. If you do not make a commitment, then the customer may not as well, as they are looking for you to lead them.”
First step is to run a vendor sell through report by classification. Get rid of all those lame vendors that you spent money on and they did not sell and take that money and invest it in a few good vendors and go deep. Review your two or possibly your three best-selling denim brands. As Management One™ affiliate Martin Bebout coaches, “look at sell through percentages as well as days on the floor instead of just the list of the top 10 sellers or the slow sellers, which may be skewed by quantity received or price point or even markdowns.”
Instead of buying 4 or 6, double the quantity, and if you believe in it triple it. A few years back one of our clients took their top selling 5 pocket denim styles and bought those same styles deep into chino and each style in 6 colors; 3 basic and 3 fashion colors. At the time they doubled up on Black and White. As summer went into fall they did the same thing only moved the bodies into corduroy. At times retailers are in a hurry to give up on something that is working. Let the customer decide.
Martin Bebout, as mentioned above was also former owner of one of the premier specialty stores in Santa Barbara, with annual revenue north of 10 million dollars. Martin commented about giving up too early, “The top styles and top wash for "7 for all Mankind" were exactly the same for 12 years after they launched the brand. What if they had discontinued that wash after the first season?”
Many retailers struggle with how to spend their open to buy dollars. They think they are playing it safe by going broad and wide and yet it is quite the opposite. Start with the low hanging fruit. Run your vendor reports and pick 2 or three classes that merchandise well with each other. Lay out the looks so they work back to each other and go deep in a few styles and make a statement in fabric and/or color.
This merchandise strategy has an additional bonus as it makes your store presentation easier to create and makes for a powerful statement that can energize and motivate your customers to buy.
When you have a vision and a clear point of view, then it is time to act boldly.
Onwards and Upwards,
Data Driven or Data Informed? What would you consider yourself? Are you data driven or are you data informed? In a recent webinar by Jeff Gothelf on agile planning, he discussed being data driven versus being data informed. The example he used is if you measured the response to favoring red or green, what would that data tell you and what decision would you make? If the results were 60% liked red and 40% liked green, would you then buy just red, if you had one option. That would be a data driven example based on Quantitative evidence.
If you were to dig a little deeper and study why the results are what they are, you might come up with a different decision. For example, what was the makeup of the response group? Based on the breakdown of social status, ethnicity, age, income, etc., would that make a difference? Understanding from whom the responses are coming from and the influential factors affecting the decisions of each of those groups might make a difference in your decision. In this example if you are data informed you would weigh the Qualitative questions, as just raised, and that might change your decision. Think of quantity of data for quantitative analysis and the quality of the data for qualitative analysis. Consider this series of data you might analyze:
Vendor A has the highest sales but also the highest purchases.
Vendor B has the highest Gross profit.
Vendor C has the best turn and GMROI.
Each set of data represents a different set of results. If you only looked at one set, you might draw a different conclusion. Vendor A represents the highest volume, Vendor B the highest Gross profit and Vendor C has the best purchases to sales ratio as well as the highest turn and GMROI. If you only looked at sales, or only at Gross profit you would not be seeing the entire picture. As you look at other sets of data questions arise and perhaps seeking additional data may be required. This would be an example of Qualitative analysis that includes reviewing the data with critical thinking and asking what is behind the data.
Data analysis is now a part of every piece of your business, from incentivizing your people, managing your inventory, understanding your customer's behaviors, and managing your expenses.
I have always considered myself a sort of data junkie. Over the years, I have learned to ask, what is the data telling me? What data is important? How do I analyze it and does it play an important role in my decision making process?
Now consider this; Amazon updates logic into various parts of their goliath systems every 11.6 seconds. They use some of that logic to measure customer's behaviors. They have also become incredibly skilled at knowing how to qualitatively use that information to make decisions. In some sense, this type of instant measurement allows them to act as nimbly as a small retailer.
We are not Amazon, with apparently unending resources, but we have plenty of data we can collect and understand to make better and more informed data decisions. We have other advantages, but they only become our advantage if we know what to look for and how to act on what we have discovered.
For more information on digging into and measuring and analyzing your data, contact Management One™. We will gladly provide you a review and share with you what we find out about your business. Together, we may discover some hidden treasures buried within all that data. Let's find out!
Speaking of data analysis, the trend line is down, but what other data is missing before arbitrarily considering that business is trending south? It seems a reasonable conclusion, at least on the surface. There is however a direct correlation for our stores of delivery of product, (inventory flow) and sales growth. The ongoing strength and solid increases of the contemporary stores tells us something about the market and the customer's willingness to continue to spend. This niche has constant access to merchandise. They also can get often, key items and fill in important categories. The fact that we are seeing double digit increases across the country in this important grouping, gives evidence to how well this category continues to evolve. By mixing both branded and non branded goods, shoulder seasons no longer have to suffer waiting for the next delivery from key vendors. This also makes us believe that stores with decreasing results may have more strategic issues to compensate as seasons trail down. If your store had a 6.1 % increase for the season and slid at the end, what were the contributing factors? In every category we manage, from luxury to, bridge and moderate apparel and then from footwear , outdoor, gifts, home and pets, there were significant numbers of winners in every month in every sector of the country. Your goal and our job are to seek out what is working and build, and not only sustain and maintain market share, but to capture a greater slice of the pie. There are always classifications that are working and your job as a retailer is to be in business in those categories, irrespective of any published trending information you consider.
Onwards and Upwards or as our Irish family likes to say "Er eyeg augus a knee us"
The 2015 Annual Management One™ affiliate conference saw the largest attended meeting in our company’s history. Attendees were there to learn, share ideas and network with each other for the benefit of the Management One™ community of retailers. Sixty-three affiliates from the United States, Canada, and Europe shared a common thought that was expressed by many of the attendees, “I wanted to be part of this game-changing moment in retail.” Retail ORBIT™ (One Retail Business Intelligence Technology) is the result of 25 years of field testing and technology. The key to unlocking the potential of Retail ORBIT™ is within the affiliate base. They are the coaches and guides to our retail community. They are the ones tasked to work with our retailers and carry the ball to the end zone, using Retail ORBIT™ to solve problems, identify opportunities, and to grow and manage the business profitably.
“A goal without a method is nonsense.” said Dr. W. Edwards Deming. We built and designed Retail ORBIT™, to create a method to measure the key metrics necessary for our clients to make better decisions about their inventory. These metrics include key dashboard analytics that allow retailers to navigate the timing of deliveries better and to maximize, capture and expand market share. Investing in the right categories to exploit opportunities and generate cash is paramount to our retailer’s success and a key to the logic of Retail ORBIT™.
We feature colorful new reports to enhance optical viewing. New charts and our unique “L” framed dashboard are designed to quickly and easily identify Key Performance Indicators (KPI’s), necessary to analyze the business and make decisions. Included are upgraded reporting with additional trending information to make on demand decisions throughout the month. Retail ORBIT™ runs on multiple platforms that are mobile enhanced and ready to serve our retailers on any of their various smart devices.
Retail ORBIT™ allows a retailer to see information and data that may not have previously been apparent. What is performing, what is on a growth curve, what is trending down? Retail ORBIT™ generates a detailed plan on what is happening in the future and specifically where your inventory dollars should go.
A detailed plan alleviates uncertainty and allows retailers to sleep at night knowing that their purchasing dollars are being invested into the appropriate products.
There is a high-level summary for those looking for a quick review, and for those individuals that are detail oriented there is sufficient information to drill down to a more granular level.
Different reports allow information to be analyzed from different perspectives. Inventory efficiency and other selected performance indicators are used throughout the reporting venues to allow for decision making at multiple levels.
We are in the process of releasing this over the summer to our client base worldwide. Following the conclusion of phase one, we will launch into phase two which will deliver the next generation of information to benefit our retail community.
Thank you for your continued support and patience as we transition to Retail ORBIT™.
Onwards and Upwards,