I continue to visit with some stores that do not have an inventory control system.
Let me note here ... I am not in the business of selling inventory control systems!
In EVERY situation they were over stocked, over bought and all had much to much
old out of season carry over inventory!
In every situation they had too much in some classifications and too little in
other classifications.
If you are in the retail business you should have an inventory control system -
if you want to be profitable!
You should know what is on hand at all times!
You should know what is selling at all times!
You should know what is not selling at all times!
You should be carrying the necessary inventory in each situation!
You should know what your Open to Buy (OTB) going forward is ... at all times!
You should know what your OTB is by classification.
You should adhere to an OTB like you should adhere to a budget!
There are a number of companies that offer computerized inventory control and OTB!
Some are excellent, some are not!
Much is dependent on the representative you work with.
Some are excellent, some are a disaster!
I have worked with stores that were signed on with respected inventory control
companies and their representative had no clue about what was right for the
store ... their turn was much too low, their markdowns were too low - yes, their
markdowns were too low! Their inventory was not focused on where the customer
was buying! ...and too often the representative took great exception to my
honest analysis of the situation.
Regardless ... not having an OTB is like attempting to build a house without a set
of detailed plans!
And, it's up to you to make sure you are getting the right advice!
Sunday, August 1, 2010
Surviving As This Unusual Economy Continues to NOT Recover
Driving home late evening recently I was thinking about the stores I am working with and some of the stores I am talking with. This was following a heart breaking conversation at dinner with a man whose son and son-in-law have a men's operation which is soon to be in bankruptcy. In as much as they are too far gone with too many problems to attempt to save, even too many problems for me to become involved with ... and I have an enviable reputation in crisis management. The son and son-in-law are going to lose their store, their homes along with their savings!
I could not think of anything else from the time I left them, waiting in the airport, on the flight home, as I walked to baggage claim, as I drove home from the airport and since ... I made some notes, finally this afternoon I am getting around to creating this blog and at the same time adding additional information so as to hopefully assist some merchant store owners from getting in the same situation!
The point of this email is to emphasize ...
1. The great importance of keeping your inventory in line, not allowing your store to get over inventoried and not getting over bought. You would not go to the super market and buy more tomatoes than you can eat before they spoil. Why allow that to happen with merchandise in your store?
2. Buy less and only what you can sell over the short term and pay for!
3. Take fast markdowns and increase turn while maintaining a constant flow of fresh desirable merchandise, so every week there is newness in the store ... Remember there is new merchandise on the market constantly. In over 40 years in the women's and men's fashion apparel and accessory business I have NEVER been to New York and not been able to locate more fresh desirable merchandise that was right for our stores.
4. Stay liquid and take care of every customer that enters the store like you and your employees have never taken care of customers before. It is very expensive to attract a new customer, keeping an existing customer is so important, don't lose sight of their great importance to you and your survival.
5. Write every customer a thank you note and phone customers to thank them for their business .... yes, 'write' a thank you note and phone ... make that a must! Sure it is time consuming and requires a special effort ... it is less of hassle and less expensive than locating and motivating a new customer to shop your store. Convince your sales people that it is also less hassle than locating a new job! If you really want to save and grow your business - this is a must!
6. Don't miss an opportunity to communicate with a customer who has been in the store and express your appreciation for their shopping in your store. Sales people come and go ... you are a constant ... you are the owner ... you need and must have customer loyalty ... to you and your store! Re-read item number 5 above!
7. It is a buyers market ... the weak, unattentive, unappreciative, unorganized store owners are not going to survive these difficult times. Re-read # 5 and # 6 above!
8. For the last eight+ years stores have been closing faster than ever in my memory, regardless of the promises you hear out of Washington ... a significant recovery has not happend and not on the immediate horizon. Don't bet on what might happen - stick to solid proved retail practices! Matter of fact, drive by any automobile dealers parking lot ... look carefully, you'll see less cars than at any time in the past 20 years ... why? People are buying less automobiles just like they are buying less apparel, accessories, shoes and just about everything else!
Matter of fact ... walk through Neiman's, Nordstrom, Saks, etc., you'lll note they are all carrying a great deal less inventory.
9. Businesses may now be laying off less employees then over the last five or six years, hiring is still much lower than in the past and there is no solid indication it will pick up anytime soon. Nearly everybody I know and talk with have been and are effected in some manner! You! Me! Your son and daughters! Your neighbors!
10. Homes are still being foreclosed and there are more homes on the market than can be absorbed in the next 18 to 24 months ... probably longer.
11. Banks have not made it easier for small or big business to get loans, they continue to cancel and call customers loans at the slightest indication of slowness.
12.Jobs continue to be scarce, unemployment in many areas of the country is 8+ percent.
13. Gas prices will sky rocket if Iran develops nuclear weapons, which according to the media could happen within the next 24 months, perhaps much sooner. The Middle East remains in constant turmoil, don't bet your money in the form of excess inventory on what may or may not happen in that area ... or with Korea.
14. Retail chains are still closing stores. Including Starbucks, Blockbuster and super market chains.
15. Wal-Mart may be doing a few percentage points more than last year. The retail specialty stores I know are not a Wal-Mart!
16. Airlines are continuing to pack us in like sardines, without the olive oil! Most are charging for checked bags and some like U. S. Air charge for desirable coach seating.
17. Stores are continuing to promote earlier, with deeper markdowns, deeper discounts and stronger and more frequent advertising! ... especially email!
18. Now is not the time to expand or open new stores ... and nearly all shopping center devlopment around the country is continuing to be on hold. New store openings are being postponed.
19.Congress remains totally dysfunctional!
20. The wars in the Middle East continues to cost 2+ BILLION a week! Our goverment is having to borrow more and more BILLIONS, primarily from foreign countries - debt is now measured in TRILLIONS upon TRILLIONS of dollars. At some point Washington is going to have to bite the bullet and increase taxes to pay this debt down!
21. The congressional election in November will not solve the problem! Don't bet on it! If the Democrats keep a majority in congress they still will not function without the cooperation of the Republicans. If the Republicans take the House and/or Senate they will not function without the Democrats and a Democratic President.
22. Do not depende on an improved economy over the short run! Let's say it does improve dramatically, you will be able to buy additional merchandise! Note # 3 above!
23. 90% of your customers do not have to buy clothes and accessories! They can wear the same dresses, shirts, blouses, sweaters, jackets, skirts, pants, shorts, bras, lingerie, etc., they currently own ... the great majority of people don't buy new clothes because they wear them out or have nothing to wear! They are not going to go nude because they don't buy something new. People, including you and me, buy because we 'think'or 'want it' not because we need it, rather because it makes us 'feel good' ... however, as income stays tight and especially if taxes go up at the end of this year, customers can live without what you sell, eating out, electronics, furniture, decor items, cars, suv's, and vacations ... all things we can put off or live without! In the depression of the late 1920's and the 1930's the consumers did not start buying clothes until needed - by then WWII had started!
24. To survive, you and every other store must operate smarter, constantly watch expenses and pay more attention to every detail.
25. Spend all day or at least as much time as possible every day on the sales floor! Greet your customers, remember names, make sure your employees are greeting your customers, make sure the customers know you are there, you apprecaite them and as I said in item # 5 and 6 ... thank them with a thank you note or phone call. Regardless of the amount of the purchase! Remember the person that buys a small and inexpensive items today is a customer that knows your store and may well be in the market for something more expensive tomorrow - they will certainly share with their family and friends disappointing service - we know that from hundreds of studies made over the past 40 years, additionally, by being on the floor you will get better production from your sales people ... and perhaps you will not need as much coverage, if you are on the floor.
It is going to be a great deal easier to follow these suggestions than it is to look for a job in this economy. And, if you have an employee that is not giving you a 100% and does not follow your instructions about taking care of customers and writing thank you notes, you need to remind them as noted in item # 5 above, "It's going to be a lot easier to do what is necessary to keep this job than it is to locate another job!"
DO NOT ALLOW UNATTENTIVE AND UNAPPRECIATIVE EMPLOYEES TO PUT YOU OUT OF BUSINESS!
I am not preaching doom and gloom'!
I am saying it is not going to get better over the short term!
No one has a clue as to how long this will last!
Don't try to out smart the economy!
Economist don't know!
Think about something a great football coach once said about his under performing losing team ...
"It's the basics ... blocking and tackling that we are not doing! Unless we get them correct, you can forget about winning!"
So it goes for retail!
It is Retail 101.
If you don't take care of the basics ... you can forget about surviving!
There will be thousands of independent retailers that will survive this economy!
There will be thousands that have not and will not survive this economy!
"It's the basics!"
Get them right or your store will become history!
If you have better survival ideas ... we all need to hear them!
A summation of some of what I have said above: merchandise flow must be timed right, merchandise must be fresh and desirable, slow sellers must be reduced rapidly and moved out of the store, sales people must be attentive, caring and express their appreciation and do the things that will keep your store(s) viable!
A quote to remember:
"The most common form of failure is giving up what you want most for what you want right now." Earlier this afternoon I posted on this blog additional quotes on 'Failure' you might find of interesting.
Very simply, there are less dollars being spent on apparel, accessories and shoes ... competition is tougher and the customer has more options to save on what they buy. Clients that have followed our recommendations are without exception doing better if we are assisting them in staying in business, and if we are or have assisted them with a going out of business sale.
Regardless, you will continue to see a lot of store closings and going out of business sales over the next 12 to 18 months ... we have gotten more calls in the past six months than at anytime over the past 12+ years!
A thought that I picked up from Vicki Pevsner, a respected consultant:
There is an art to opening a business!
There is an art to operating a business!
There is an art to closing a business!"
Milton Waldoff
The Waldoff Group
Solutions Especially For Independent Stores
I could not think of anything else from the time I left them, waiting in the airport, on the flight home, as I walked to baggage claim, as I drove home from the airport and since ... I made some notes, finally this afternoon I am getting around to creating this blog and at the same time adding additional information so as to hopefully assist some merchant store owners from getting in the same situation!
The point of this email is to emphasize ...
1. The great importance of keeping your inventory in line, not allowing your store to get over inventoried and not getting over bought. You would not go to the super market and buy more tomatoes than you can eat before they spoil. Why allow that to happen with merchandise in your store?
2. Buy less and only what you can sell over the short term and pay for!
3. Take fast markdowns and increase turn while maintaining a constant flow of fresh desirable merchandise, so every week there is newness in the store ... Remember there is new merchandise on the market constantly. In over 40 years in the women's and men's fashion apparel and accessory business I have NEVER been to New York and not been able to locate more fresh desirable merchandise that was right for our stores.
4. Stay liquid and take care of every customer that enters the store like you and your employees have never taken care of customers before. It is very expensive to attract a new customer, keeping an existing customer is so important, don't lose sight of their great importance to you and your survival.
5. Write every customer a thank you note and phone customers to thank them for their business .... yes, 'write' a thank you note and phone ... make that a must! Sure it is time consuming and requires a special effort ... it is less of hassle and less expensive than locating and motivating a new customer to shop your store. Convince your sales people that it is also less hassle than locating a new job! If you really want to save and grow your business - this is a must!
6. Don't miss an opportunity to communicate with a customer who has been in the store and express your appreciation for their shopping in your store. Sales people come and go ... you are a constant ... you are the owner ... you need and must have customer loyalty ... to you and your store! Re-read item number 5 above!
7. It is a buyers market ... the weak, unattentive, unappreciative, unorganized store owners are not going to survive these difficult times. Re-read # 5 and # 6 above!
8. For the last eight+ years stores have been closing faster than ever in my memory, regardless of the promises you hear out of Washington ... a significant recovery has not happend and not on the immediate horizon. Don't bet on what might happen - stick to solid proved retail practices! Matter of fact, drive by any automobile dealers parking lot ... look carefully, you'll see less cars than at any time in the past 20 years ... why? People are buying less automobiles just like they are buying less apparel, accessories, shoes and just about everything else!
Matter of fact ... walk through Neiman's, Nordstrom, Saks, etc., you'lll note they are all carrying a great deal less inventory.
9. Businesses may now be laying off less employees then over the last five or six years, hiring is still much lower than in the past and there is no solid indication it will pick up anytime soon. Nearly everybody I know and talk with have been and are effected in some manner! You! Me! Your son and daughters! Your neighbors!
10. Homes are still being foreclosed and there are more homes on the market than can be absorbed in the next 18 to 24 months ... probably longer.
11. Banks have not made it easier for small or big business to get loans, they continue to cancel and call customers loans at the slightest indication of slowness.
12.Jobs continue to be scarce, unemployment in many areas of the country is 8+ percent.
13. Gas prices will sky rocket if Iran develops nuclear weapons, which according to the media could happen within the next 24 months, perhaps much sooner. The Middle East remains in constant turmoil, don't bet your money in the form of excess inventory on what may or may not happen in that area ... or with Korea.
14. Retail chains are still closing stores. Including Starbucks, Blockbuster and super market chains.
15. Wal-Mart may be doing a few percentage points more than last year. The retail specialty stores I know are not a Wal-Mart!
16. Airlines are continuing to pack us in like sardines, without the olive oil! Most are charging for checked bags and some like U. S. Air charge for desirable coach seating.
17. Stores are continuing to promote earlier, with deeper markdowns, deeper discounts and stronger and more frequent advertising! ... especially email!
18. Now is not the time to expand or open new stores ... and nearly all shopping center devlopment around the country is continuing to be on hold. New store openings are being postponed.
19.Congress remains totally dysfunctional!
20. The wars in the Middle East continues to cost 2+ BILLION a week! Our goverment is having to borrow more and more BILLIONS, primarily from foreign countries - debt is now measured in TRILLIONS upon TRILLIONS of dollars. At some point Washington is going to have to bite the bullet and increase taxes to pay this debt down!
21. The congressional election in November will not solve the problem! Don't bet on it! If the Democrats keep a majority in congress they still will not function without the cooperation of the Republicans. If the Republicans take the House and/or Senate they will not function without the Democrats and a Democratic President.
22. Do not depende on an improved economy over the short run! Let's say it does improve dramatically, you will be able to buy additional merchandise! Note # 3 above!
23. 90% of your customers do not have to buy clothes and accessories! They can wear the same dresses, shirts, blouses, sweaters, jackets, skirts, pants, shorts, bras, lingerie, etc., they currently own ... the great majority of people don't buy new clothes because they wear them out or have nothing to wear! They are not going to go nude because they don't buy something new. People, including you and me, buy because we 'think'or 'want it' not because we need it, rather because it makes us 'feel good' ... however, as income stays tight and especially if taxes go up at the end of this year, customers can live without what you sell, eating out, electronics, furniture, decor items, cars, suv's, and vacations ... all things we can put off or live without! In the depression of the late 1920's and the 1930's the consumers did not start buying clothes until needed - by then WWII had started!
24. To survive, you and every other store must operate smarter, constantly watch expenses and pay more attention to every detail.
25. Spend all day or at least as much time as possible every day on the sales floor! Greet your customers, remember names, make sure your employees are greeting your customers, make sure the customers know you are there, you apprecaite them and as I said in item # 5 and 6 ... thank them with a thank you note or phone call. Regardless of the amount of the purchase! Remember the person that buys a small and inexpensive items today is a customer that knows your store and may well be in the market for something more expensive tomorrow - they will certainly share with their family and friends disappointing service - we know that from hundreds of studies made over the past 40 years, additionally, by being on the floor you will get better production from your sales people ... and perhaps you will not need as much coverage, if you are on the floor.
It is going to be a great deal easier to follow these suggestions than it is to look for a job in this economy. And, if you have an employee that is not giving you a 100% and does not follow your instructions about taking care of customers and writing thank you notes, you need to remind them as noted in item # 5 above, "It's going to be a lot easier to do what is necessary to keep this job than it is to locate another job!"
DO NOT ALLOW UNATTENTIVE AND UNAPPRECIATIVE EMPLOYEES TO PUT YOU OUT OF BUSINESS!
I am not preaching doom and gloom'!
I am saying it is not going to get better over the short term!
No one has a clue as to how long this will last!
Don't try to out smart the economy!
Economist don't know!
Think about something a great football coach once said about his under performing losing team ...
"It's the basics ... blocking and tackling that we are not doing! Unless we get them correct, you can forget about winning!"
So it goes for retail!
It is Retail 101.
If you don't take care of the basics ... you can forget about surviving!
There will be thousands of independent retailers that will survive this economy!
There will be thousands that have not and will not survive this economy!
"It's the basics!"
Get them right or your store will become history!
If you have better survival ideas ... we all need to hear them!
A summation of some of what I have said above: merchandise flow must be timed right, merchandise must be fresh and desirable, slow sellers must be reduced rapidly and moved out of the store, sales people must be attentive, caring and express their appreciation and do the things that will keep your store(s) viable!
A quote to remember:
"The most common form of failure is giving up what you want most for what you want right now." Earlier this afternoon I posted on this blog additional quotes on 'Failure' you might find of interesting.
Very simply, there are less dollars being spent on apparel, accessories and shoes ... competition is tougher and the customer has more options to save on what they buy. Clients that have followed our recommendations are without exception doing better if we are assisting them in staying in business, and if we are or have assisted them with a going out of business sale.
Regardless, you will continue to see a lot of store closings and going out of business sales over the next 12 to 18 months ... we have gotten more calls in the past six months than at anytime over the past 12+ years!
A thought that I picked up from Vicki Pevsner, a respected consultant:
There is an art to opening a business!
There is an art to operating a business!
There is an art to closing a business!"
Milton Waldoff
The Waldoff Group
Solutions Especially For Independent Stores
Failure
FAILURE
The most common form of failure is giving up what you want most for what you
want right now. Unknown
want right now. Unknown
Failure is simply the opportunity to begin again, this time more intelligently.
Henry Ford
Henry Ford
Remember the two benefits of failure. First, if you do fail, you learn what
doesn't work; and second, the failure gives you the opportunity to try a new
approach. Roger von Oech
doesn't work; and second, the failure gives you the opportunity to try a new
approach. Roger von Oech
Success is not built on success. It's built on failure. It's built on frustration.
Sometimes it’s built on catastrophe. Sumner Redstone
Sometimes it’s built on catastrophe. Sumner Redstone
Failure is not fatal; victory is not success. Tony Richardson
Far better is it to dare mighty things, to win glorious triumphs, even though
checkered by failure ... than to rank with those poor spirits who neither enjoy
nor suffer much, because they live in a gray twilight that knows not victory
nor defeat. Theodore Roosevelt
checkered by failure ... than to rank with those poor spirits who neither enjoy
nor suffer much, because they live in a gray twilight that knows not victory
nor defeat. Theodore Roosevelt
Success is not forever and failure isn't fatal. Don Shula
We learn wisdom from failure much more than from success. We often
discover what will do, by finding out what will not do; and probably he who
never made a mistake never made a discovery. Samuel Smiles
discover what will do, by finding out what will not do; and probably he who
never made a mistake never made a discovery. Samuel Smiles
Like success, failure is many things to many people. With A Positive Mental
Attitude, failure is a learning experience, a rung on the ladder, a plateau at
which to get your thoughts in order and prepare to try again.
W. Clement Stone
Attitude, failure is a learning experience, a rung on the ladder, a plateau at
which to get your thoughts in order and prepare to try again.
W. Clement Stone
Failure should be our teacher, not our undertaker. Failure is delay, not
defeat. It is a temporary detour, not a dead end. Failure is something we
can avoid only by saying nothing, doing nothing, and being nothing.
Denis Waitley
defeat. It is a temporary detour, not a dead end. Failure is something we
can avoid only by saying nothing, doing nothing, and being nothing.
Denis Waitley
The Waldoff Group
Retail Solutions Especially For Independent Stores
TheWaldoffGroup.com
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