Time for Your "Inner Merchant" to Shine

As we have taught for years, anyone selling something to the ultimate consumer is a "retailer." 

However, only a small portion of these retailers are truly "merchants".

And now is the time the merchants can shine!

While we certainly are not economists (among other things), we are sensing that consumer confidence is generally stronger now than it has been in many Holiday seasons. 

And merchants recognize there is an opportunity to benefit greatly from a few carefully-selected additional markups this Holiday Season, and perhaps into the first quarter of 2015 as well. 

Don't by shy! If you have discovered unique merchandise and brought it in, do not undervalue your discerning choices!

• Identify that unique, non-commodity merchandise you have. (Perhaps 5%-10% of the total.)
• If you haven't already, take a markup that is bit higher on those carefully-selected items.

What's the worst that can happen? It ends up being marked down in 7 weeks?! Hmmm.

• During that time, those 5–10 days before Christmas, all true merchants will be "dumping" (that's understood, right?) merchandise they do not want come December 26. 
• So what if you still have some of this specialized merchandise at that time; you still are likely to generate some revenue from it.

But, between now and then, get that extra markup wherever you can! This is not the time to leave money on the table.

The merchants of the world assure you: this is not being greedy. It is being strategic! 

You know, like a merchant!!

Herding Cats: Those Ever-Changing Demands of Retailing

Warren Buffet, the "Oracle of Omaha", is widely considered the most successful investor of the 20th century. But what is his "Achilles heel"? What investments does he self-describe as "failures"? According to Mr. Buffet, it is his investments in the retail industry. 

The problem? The constant change in retailing makes it difficult to achieve economies of scale. 

"Mr. Buffet has said that retail is challenging because shopping habits and sales channels are constantly changing, making it difficult for businesses to build and maintain competitive advantages, or what he calls 'economic moats,'" reported Anupreeta Das in the July 17 Wall Street Journal.

Meanwhile, there is Amazon. At one point, in their postings for retail jobs, Amazon stated their goal was to "Turn the art of retailing into the science of retailing." Oh really?! They, too, believe that retail should be easily reduced to an algorithm.

Retailing defies predictability. There are no straight-line projections. And, not everyone has the stomach for retailing's unpredictability.  

Today, it is common to cite the internet as the major competitive threat to retailing. Indeed, e-commerce has challenged retailing.

But, so did the big box stores. And mail order. And before that, outlet malls. Before that, regional shopping malls. And shopping centers. And before that, department stores. 

Responding to change is not news to seasoned merchants. In fact, it is this dynamism of retailing that attracts so many people into the industry! 

The true merchants thrive on this ever-changing environment. Instead of being dismayed by change, they relish its challenges.

In retailing, being nimble and responsive offers a decided competitive advantage. And with today's technology, any retailer, anywhere, can gain that advantage, and compete far more effectively. 

Baseball Is Back! And Like Retailing, "It Ain't Slow Pitch!"

Question: Why is specialty retailing like Major League Baseball? (And, why is online shopping a lot like Spring Training?)

• Much like shopping at Amazon, eBay, etcetera, Spring Training games offer lots of selection! Each team's Spring Training rosters number 60 to 70 players! Talk about an "endless aisle"...
• With that "breadth of selection" comes variation in quality. Some are young "prospects"; others are players attempting comebacks; still others are veterans trying to hang. Plus, there are the big-name free agents establishing themselves with a new team.
• Just like online shopping, Spring Training offers every imaginable price point (that is, total team payroll, as well as individual player's contracts.) From prospects to free agents, there is much variation.
• And, while the scouting reports from the pros aren't available, there is no lack of "reviews": newspaper columns, TV reports, blog posts, tweets, etcetera about the relative merits of each player. Opinionated? Yes! Informed? Maybe.

But then, the "regular season" approaches. Rosters must be trimmed to 25 players on each team. As they say, "It ain't slow pitch!" 

That "editing" of the assortments - cutting the roster to the best 25 players - is why specialty retailing is like the Major Leagues. Retailing isn't slow pitch either!

The competitive advantage of specialty retailers is much like that of the baseball manager: wisely editing for the most success and the best fan appeal.

• Specialty retailers decide every day which merchandise "makes the team", and of that, which is in the starting lineup.
• Specialty retailers are dispassionate about trying new merchandise, as well as taking markdowns on under-performing merchandise. (Just like baseball managers send players back to the minor leagues, or trade them, or cut them from the team.)
• And yes, just like a baseball manager, a retailer's livelihood depends on how good a job of "editing" has been done, and how it performs.

When it comes down to it, the toughest decision in retailing is what merchandise to NOT carry. (Especially when the vendors want you to carry everything!)  And baseball managers risk their jobs with their decisions of which players to not have on the team.

See, good specialty retailing IS the Big Leagues!!