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We saw a 6.5% increase in July in Management One™ client sales over last year.
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,