Just a Retailer? Or, a True Merchant?

Everyone, and anyone, can be a retailer.

If you put on a garage sale, you are in retail; you are selling to the ultimate consumer. By selling on eBay or Amazon or Etsy or a farmer's market or your own stores, by definition, you are a retailer. And every day, The ROI is helping many of them worldwide.

But, just as in education, or in sports, there exists a highest, ultimate level of professionalism. In retailing, this is to be a "Merchant".

Acres of Merchants

A few weeks ago, we visited the huge outdoor Orange County Market Place® in Southern California.

• It covers acres!
• Open Saturdays & Sundays only, 7 a.m. to 4 p.m. 
• The vendors sell all new merchandise – everything and anything – to the throngs that come each weekend. 
• And, each year, in the 100 or so days it operates, it attracts 2 million visitors! 

It was absolutely fascinating to watch! 

We came away with a great deal of respect for the Orange County Market Place vendors who survive. They are pure Merchants. And, in our view, retailers who become Merchants will survive. (The others will contribute to the deplorable 8-9% annual failure rate.)

How Do We Define a "Merchant"?

These are the attributes that separate Merchants from "just retailers":

• Merchants source for a particular group of customers. They are agents for the customers, not agents for - or beholden to - any vendor. 
• Merchants closely monitor any changes in their customer group. 
• Merchants judge every piece of inventory they own on whether it (still) appeals to their customer group. 
• Merchants dispassionately add or delete products, services, locations, personnel as needed to best serve "their" customers. 

Think of retailers around you. 

• Clearly, some are or have been led by Merchants: Starbucks, Costco, Nordstrom, Crate & Barrel, etc. 
• Now, think of recent or pending retail failures.

See the difference? Whether large or small, the distinction between success in retail or failure is traceable to the Merchant-instincts between the ears of the top people.

Can any retailer become a Merchant? 

Indeed, yes! But to do so, 110% of their mindset must be on getting and doing what a specific group of customers will pay for. And to do that better than the competitors.

Want to see lots of Merchants?

Go to the largest Farmer's Market or Street Fair you can find. In that environment – as in yours – only the Merchants survive!

Mother's Day Promo That's Really About the Millennials

Retailing is a wonderful spectator sport. We pay attention  to retailers of all sizes, in all merchandise segments, at all price points.

And often, what we see is inspiring! The creativity and resourcefulness of merchants is a major part of the magic of retailing. We enjoy sharing examples of creativity in one segment to retailers in other segments.

For instance, consider the cleverly multi-faceted way one retailer, in this case Nordstrom, is approaching Mothers Day.

First, they're using major window displays that feature likely Mothers Day gifts. But what sets them apart is the intended audience for these displays: those "digital natives", the Millennials. 

Here's the message Nordstrom has on these windows:

"Here's How to Wow Your Mom. 

Download our app, scan the barcode on the window display of the item you want, and order by May 1 for delivery by Mothers Day."

In our view - (Note: We're just speculating; we've not discussed this with anyone at Nordstrom) - the Mothers Day merchandise Nordstrom will sell through these windows is secondary. We suspect that Nordstrom's #1 priority for this two week time frame is to connect with more of the Millennials.

• This is a powerful prompt for Millennials to download the Nordstrom app. That's the key metric!
• The emphasis is on ease and speed. That's spot on for this group! No need to go into the store. Just make your choice from the window display (or the app itself.) They barely need to slow down while walking by!
• And then there's the reassurance angle. These time-pressed 20 to 35 year olds being targeted are the offspring of Nordstrom's established customer base. (So a Mothers Day gift from Nordstrom is a safe choice. Or, of course, it always can be returned!)

The Benefit for All Other Retailers

But, as clever as we think this is, here's why we are describing it: 
How might you be able to leverage this kind of thinking in your own stores?

You don't have to have an app, or a full time window display department. Just some inspiration, and a good idea of who you want to reach.

Then, 3 basic steps:

• reach them, connect with them on their terms
• make shopping easier for your desired customers
• reassure them that they're making the right choice

So, That Question Again

We are asked frequently - and again last week it occurred - “Well, Pat & Dick, what’s your view on the economy for retailers?”

We began by recounting the challenges: 

“Well, this is the New Normal. That is, modest population growth, many fewer people in the Generation X valley between the Baby Boomers and the Millennials, and the sense that worldwide events may at any moment substantially impair our economy." 

Then, we also noted the positive indicators:

• consumer confidence continues to rise
• last week the stock market hit an all time record high
• and of the 54 retail segments we follow, although some are suffering, most are doing quite well. (see Monthly Sales comps on The ROI site - compare your sales trends to your segment).

"Actually, It's Just Like the Weather"

But, here's the real key: in every retail sector, some retailers are declining, and others are doing quite well indeed.



What separates those succeeding retailers from all the others?

• Those who are thriving tend to be focused on the “controllable variables” - managing inventory, expenses, people issues, cash flow.
• Of course, they're always doing what they can to improve sales. But that's not as controllable!
• And, they consciously choose to not be drawn into the distractions of the 24/7 bad news cycle, even though those around them tend to be.

In other words, the economy, like the weather, does have an impact on retailers. But, like the weather, the economy is beyond their control.



The best one can do is:

• pay attention
• stay nimble
• adapt
• and control the controllables!

That's why it seems to us the answer to the question - “Well, Pat & Dick, what do you think of the economy for retailers?” - is this:

Three things: Execution. Execution. Execution.