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The #1 responsibility of every retailer is to manage and control the inventory. By doing that, you are managing margin, profit, cash flow...also known as success! Managing inventory demands a merger of art – the selection of merchandise – and science – the quantity of merchandise at any given time. And here is a formula that makes the science part accessible for every retailer. All you need is a pencil to do this (remember those?) And it can and should be embraced by every retailer!
Christmas is less than four weeks away. The march toward your 12/31 targeted ending inventory level has begun.
This is the moment an “enforcer” steps up. No, this time we’re not referring to sales or customer service or better displays. We are instead referring to your #1 responsibility! Ahh yes. Inventory at 12/31 is a vital, critical touchstone. It prepares your store for the months ahead. You must have appropriate inventory levels and mix, plus the cash to pay for it! And here's a quick and easy – and free! – way to know what that target ending inventory number should be. By department. It's all based on your turnover rate for each department. Here's how it works. For each department:
And now, the crucial test: Are you on track to hit the year-end inventory target? If not, what adjustments do you need to make? Like much sharper markdowns? Or canceling or delaying orders? Or...?? Nice to have that estimate now, right? A worthy enforcer (ahem, that would be YOU!) will monitor this process two/three times a week through December. Customers are available! But time is running out. Tick tock. Tick tock. Do not miss out on this golden opportunity! As the old adage goes, "If you don't know where you're going, any road will get you there." Having a targeted ending inventory is the answer for "where are you going?" And you will be much happier when you get there!
This is so important, that if you have any questions, contact us directly. Always happy to help. -- Pat & Dick
Another real challenge of 2021 is rearing its head: Whatever you used to do in terms of managing your staff likely will not work this year.
In the aftermath of the pandemics, lockdowns, stimulus payments, low unemployment, and minimum wage increases, finding and keeping good employees is even more daunting for independent retailers.
As we approach April of 2021, the question for retailers is "Now what?" Having survived 2020, in many cases on guts and guile, we must now focus on how best to survive 2021 and beyond. As having one foot on the dock and one foot in the boat, the future of retailers in that Red Zone is not a pretty picture. Granted, there is much talk about the expectation that "convenience" will become a major factor for shoppers going forward. And we don't disagree.
Here's the deal: We see that this has brought heightened awareness of two different retail strategies: Convenience Retailing versus Destination Retailing.
Yes, we know. Owning a retail business these days is one flexibility test after another. And there are no one-size-fits-all solutions. In the United States, one of the most widespread impacts of the virus is uncertainty. With no end in sight. It is the virus that is in charge. As the president of Alaska Airlines noted, "We don't know what the future looks like."* But the fact remains, whomever is selling to the ultimate consumer has leverage. Might that be you?
Throughout the pandemic, millions of shoppers – including the older Baby Boomers – discovered the benefits of online shopping. Then, as brick-n-mortar retailers scrambled to survive, the increased availability of delivery, curbside pickup, BOPIS (Buy Online, Pickup In Store) and BORIS (Buy Online, Return In Store) was well received by a broad swath of consumers. We see that this has brought heightened awareness of two different retail strategies: Convenience Retailing versus Destination Retailing.
And here's the deal: retailers now must choose either one or the other of those two strategies. You cannot have one foot on the dock and one foot in the boat. You DO have to decide!
The season of ghosts and goblins and things that go bump in the night is upon us. While Halloween comes and goes, there may be another very unhappy monster haunting retailers this Holiday season. And it is spooky! What is this monster? It is an unintended consequence of the good faith efforts of many retailers to provide "excellent customer service." Customer expectations have been raised to heights that may not be fulfilled this year. A grim reality is setting in.
As we reflect on this year and the multiple and still-ongoing effects of the pandemic, we are inspired once again by the resilience and perseverance of independent retailers. Then we saw a comment about dealing with adversity that seems particularly relevant to retailers. Remember Cher, the entertainer? (And conservationist and philanthropist.) She was asked by Christine Amanpour about how she dealt with adversity and setbacks (like bankruptcy) throughout her career.
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