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Your Performance Depends on Your Tools –
so Evaluate Them
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Despite the pressures of daily business, every successful business owner periodically takes quiet time to analyze the business – what's going right, what needs improvement, where changes should be made. And spring-into-summer, with its promise of longer days and new fashions, is a perfect time to take a fresh look at whether you're doing everything you can to maximize your business returns.
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Start by making a list of the major areas in your business that you feel should be scrutinized.
I am providing this list as an example; your list may differ. Examining how each of these areas might look, we would include the following:
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- Merchandising – Look at all buying functions, including assortment planning, resource structure, floor presentation, and the evaluation of metrics, including sales, turnover, mark-up (both initial and maintained), and return on investment (ROI).
- Marketing – Assess trunk shows, pop-ups, catalogs, ads for productivity. Don’t forget to include an evaluation of any online business activities, including social media, internet selling, current website effectiveness, email lists, print media, and broadcast media if you use it.
- Human Resources – Basically, this is the “people” part of the business. Review every key position to determine if any changes need to be made. Now is the time.
- Technology – Needless to say, tech is changing at a very rapid pace. Is your point-of-sale system keeping up with you? Do you employ a state-of-the-art merchandise planning system? Are the company’s computer software programs up to date regarding security?
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Let’s take a deeper dive into each of these four areas.
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Begin with a review of the year-end merchandising metrics.
- Were sales up or down by store and classification?
- Has the initial markup (IMU%) been reviewed recently, or are you pricing items the way you always have? A small increase now, in this area alone, can make a huge difference in the bottom line.
- Is the maintained markup (MMU%) in line with industry standards? If not, what is the reason?
- Could there be a markdown issue? Was it weather-related, product-related, poor timing of deliveries, or did you just buy too much of the wrong stuff?
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Each resource needs to be evaluated at year end, as well. Determinations need to be made:
- Does the vendor’s past performance justify more exposure on the sales floor?
- Or does that vendor need to be decreased or eliminated completely?
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(Note: It’s OK to change lines once in a while, to keep things fresh and interesting, if they have been thoroughly vetted. And it’s OK to discontinue lines that no longer perform or have become “long in the tooth” in the customer’s eyes.)
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Look around your store as if you were seeing it for the first time.
- How is the selling floor presentation?
- How is the lighting, the customer fitting areas, the cash/wrap area?
- Does the store need decorating to spiff it up?
- How is the outside signage?
- Are the fixtures up to date and fully functional?
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The list could go on, but this makes a good start.
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- Were the scheduled vendor trunk shows successful? If yes, what made them so and if not, why?
- Did you do any pop-ups this year and were they worth the investment?
- Be sure to review all advertising contracts with all print and broadcast media.
- What does the direct mail campaign look like this year?
- Is the advertising message you are sending always consistent with your brand and store image?
- What kind of message does your website send? Is it informational only, or are you trying to sell from it as well? If so, is the shopping cart feature easy to use?
- Finally, does the cash outlay spent on all forms of marketing generate a good return?
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- Every person should be evaluated and formally reviewed during the first quarter. This would include key division heads such as merchandising, finance, and store operations.
- Everyone’s performance gets reviewed – from the sales floor to the office, from receiving to even the receptionist who often has the first interaction with customers and vendors.
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- Are you keeping up with the changing tech world? Be honest with yourself. If you don’t know or can’t figure it out, find someone who can.
- Does your point-of-sale system serve you as well as it should, or are you simply putting up with it because you think that finding a new one is too big of a hassle or will be too expensive?
- Ask yourself this: How much is it costing you if you can’t get accurate data, or the reporting is not helping you make better management decisions? Staying with a bad POS system is much like staying in a bad relationship.
- Make sure that the class structure is set up correctly for the business you anticipate in the coming year.
- Does your OTB plan adjust monthly, based on rate of sale?
- Are the sales plans accurate or do you have to come up with them yourself?
- How is the inventory planned?
- Are markdowns planned as part of the program?
- How often does the information update?
- And finally, do you have an experienced merchandising analyst on staff, or an outside consultant, who will give it to you straight and not simply tell you what he or she thinks you want to hear?
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Remember, your performance is only as good as the tools you have. If you have the merchandise, location, right people, and systems, you are off to a good start. Now it’s up to you to manage well.
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- Discover strategies, tactics and tips that lead to success
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- Leave energized with an action plan to implement in your store
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Paul Erickson
Senior Vice-President of Management One
Paul’s passion for client service and for preparing independent retailers to excel in the area of inventory productivity and control also earns him the title of Inventory Productivity and Control Genius. This has been central to both his personal success and that of the Management One client base.
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Widely recognized for his talents as a retail educator and engaging speaker, Paul has conducted seminars and workshops to top trade shows and such groups as National Shoe Retailers Association, FN Platform, Outdoor Retailer, America’s Mart, National Sporting Goods Association, and the Global Retail Conference in Barcelona, Spain. He has been featured in Fortune Magazine, Women’s Wear Daily and on the CBS Evening News.
Management One is excited to participate again in this world-class training. Among some of the best creative minds in the business, guest speakers include our own Paul Erickson, sharing his insights on these two topics.
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Open to Buy Basics: Get A Grip on Your Inventory!
Inventory is the heart of your business. How healthy is your heart? Do you know the connections between your SKUs and your financial health? Do you understand merchandise planning and open-to-buy? Starting with the basics, Paul will share important concepts, techniques, and formulas to improve your inventory turnover, cash flow, revenue growth, and gross margin. Get ready to start making more money NOW!
The Psychology of Price: The Markup and Markdown Game
Consumers want the best deal possible whether they need the item or not. Getting to the best price is winning, in their minds. But the right price is not always the lowest price. Come along on this fascinating journey with Paul, as we explore the psychology of price from the retailer and consumer’s point of view and then learn what to do about it. Learn the tactics you will need to deploy to maintain your competitive position with an eye – or two – on your long term profits.
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Want more one-on-one help at MAGIC?
On your RSVP form, you can reach out to contact a UBM Retail Concierge.
UBMFASHION.COM
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CHARTING PROFITABLE TRENDS
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MAY 2018 through May 2019
The graph below represents monthly sales increases, year to date, based on our clients who have comparable data from last year’s sales as Management One clients.
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OUR NEWSLETTERS...RIGHT TO YOUR INBOX
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It’s easy to sign up and get insights and inspiration from Management One and Retail Orbit CEO, Marc Weiss, every month. Know someone else who would be interested? Feel free to share this link!
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IN RETAIL, THERE IS ALWAYS A NEXT LEVEL
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Management One™ is the leading provider of inventory and merchandise planning to specialty retailers around the world, through highly trained Retail Experts. Our positive culture and intense attention to our products and our customers make us the premier choice for merchandise planning. |
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JUNE 2019 © MANAGEMENT ONE™
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