Vital Retailer Resources, A Breakdown

Do you call ‘em the way you see ‘em?

By Evan Wise, Management One  


There are three umpires sitting in a bar discussing a game they just watched. The first one says, “I call ‘em the way I see ‘em!” The second one disagrees and says, “They aren’t anything till I call ‘em!”  “Still wrong,” says the third one, “I call ‘em the way they are!”That illustrates three philosophies of calling balls and strikes and those three philosophies characterize how small business owners and retailers manage their business.

I call ‘em the way I see ‘em

This is the retailer who goes to market with a clean slate. They shop and buy what they like. If they really like an item, they buy more. They make decisions on the spot with little prior planning other than looking at what was sold last year. This is a great way for an owner to stay in control of the situation because no one else has an idea of how the owner “sees ‘em” so no one else can replace the owner in buying picking merchandise. This is truly the way for a small retailer to remain small.

They ain’t nothing until I call ‘em

This is the owner who will not allow anything to happen without his approval. Delegation is something he talks about but naturally his staff is not worth or capable of delegated responsibility.  Every decision must be approved by the owner. It is not a decision until the owner makes it. In the game, the players must adapt to the situation the umpire creates, regardless of how good or bad the call may be or how frustrating it is for players and fans. In a business, the employees are forced to do the same thing regardless of how frustrating it is for employees or customers. There is no instant replay in business nor can a customer throw a flag on the field and have the decision reviewed by a higher authority!

I call ‘em the way they are

These are the managers who are able to study the situation and draw conclusions from accurate data. They look at history and use it to identify the trends and the opportunities that exist for the customers. These owners understand the customers, the vendors and the markets from both a quantitative and qualitative viewpoint. These are retailers who invest in information to help everyone in the organization to make the right decisions based on reality. These are the owners who invest in training for their staff so that they can delegate and have the right decisions made by others. These are the owners who define what the goals are and then empower people to make them happen.

As a retailer, you must manage two key assets and get the most return on your investment in each:

·         INVENTORY

·         PEOPLE

ASSET ONE: INVENTORY

Too often we find retailers who say, “They aren’t anything until I call ‘em.”The way they judge success in the business is based on sales. If they reach their sales targets, they declare that they are successful regardless of any reality. Other retailers who “call ‘em the way they see ‘em” are likely to focus on  profits. Inventory is an asset according to your accountant. This retailer may be profitable based on the level of inventory in the store but he cannot pay his bills because his cash is all tied up. The manager who “calls ‘em the way they are”recognizes that inventory is only an asset if you sell it profitably. It is a liability when it sits on the shelf. On the shelf, it ties up money that could be invested in fresh goods. It takes up space that could be used to show the items customers want. When you “call ‘em the way they are,” you focus on cash and the key measurables, not just profits.

 
A retailer has two options to clear out goods that are a liability to his store:

·         MARKDOWN STRATEGY
·         MERCHANDISE PLANNING

Too often retailers are forced to take heavy markdowns to reduce inventory levels, raise cash to pay bills and generate traffic in the store. A markdown strategy can include offering incentives to employees to show the merchandise, increased marketing, re-merchandising to highlight the items and markdowns. All of these are expensive and serve to drain cash and profits from the business but these tactics are a fact of retail life. Many of the merchants who believe “they ain’t nothing until I call ‘em,” make these offhanded and ad hoc decisions about markdowns. They approve every markdown based on “gut feelings”.

The owner who “calls ‘em the way they are” takes an approach of gathering the data and uses MERCHANDISE PLANNING.

ASSET TWO: PEOPLE

People are what make your store unique. Your people, your service, your policies and procedures should be unique to your store. They are what should set you apart from the competition and be the basis for your reputation and your brand image. Your people are truly your most valuable asset. In which type of management approach would you enjoy working? The most fair, predictable and reasonable approach is “I call em they way they are.”This is directed by the manager who gets the facts before jumping to conclusions.

 
That being said, most retailers take a haphazard approach to managing their staff. If you want to put more cash in your pocket, you must do a better job from point of hire to point of sale... period!  That is where we work with retailers on our solution called Winning@Business™. There are three components to the process of getting the most out of your investment in people:

• STRATEGY
• MANAGEMENT
• TRAINING

A retailer who can get these right can truly dominate his marketplace, develop loyal customers, keep the best employees and have more fun and profit from the business. The reality is that most independent specialty retailers do not even have a written strategy. The few I have met who do have a strategy, have rarely shared that strategy with the rest of the organization.

The second step in the process involves the management process. A business that has a strategy must also have a process whereby the employees can be organized, motivated and involved in the achievement of that strategy. A method to enhance communication, collaboration and action that focuses on both the strategy and the customer is essential to achieve results. The Winning@Business™ solution involves the essentials of a management process including teamwork, problem solving, capturing opportunities, meeting technology, measurement and accountability. Moving the owner from “I call ‘em the way I see ‘em” or “they aren’t anything until I call ‘em” to “I call ‘em the way they are” is a critical part of success. A certified Management One® affiliate works hand in hand with the owner and the staff to not only set up the solution and teach the principles, but also to implement and nurture the process to be certain that the benefits are realized.

RESULTS

Inventory planning, strategic planning, management and training are key elements to success in any retail business. Management One® is focused and committed to the results we achieve for each and every client. It is critical to measure the return that a retailer receives on any investment and the investment in business coaching services is no exception.  Our clients generally see a return of three to ten times the investment in our solutions in the first year alone. We measure and report that information too!

 
The results are staggering. They include:


OWNER

• Increase in profit and cash
• Greater market share and sales
• Greater peace of mind that the store can run effectively in his/her absence
• Pride in a growing business that is a market leader
• Freedom to grow the business instead of work in the business

EMPLOYEE     

• The right merchandise is available to sell
• A feeling of belonging, commitment, and involvement in the operation
• Understanding expectations and empowerment lead to more significant action
• More input
• Often greater remuneration

CUSTOMER

• A shopping experience that is fun and productive
• A personal relationship in addition to a business relationship
• A place where everybody knows his/her name
• Convenience
• Service
• Loyalty

As a specialty retailer, you cannot afford to operate in an ad hoc, haphazard, shoot-from-the-hip or random manner any longer. When you do, you are providing your competition too many opportunities to take customers, employees and market share. You are robbing yourself of profits needed to grow the business. It is time you put the latest techniques to work to boost your business, find reality and start “calling ‘em the way they are!”