Welcome to The Merchant Life, for retailers and retail enthusiasts wanting the insider perspective of all things retail.
As we quickly approach the holiday season, retailers are getting more and more nervous.
From containers stuck in traffic jams at ports across the world and not enough truckers to transport goods to a shortage of raw materials and factory closures due to COVID outbreak – our planners are getting a run for their money.
The unexpected shift in customer behaviours, closed stores, the excess, the supply chain, and the disruption has been unpredictable.
As we approach the busiest time of year, where many retailer’s make 60% of their yearly sales if not more, we will drive our planners to the edge.
So how do we save them? Our retail planners?
I have some ideas.
Let’s dive in.
SAVE our Planners!
The pandemic put planners in the spotlight and clearly retail planners are suffering and we need to help them.
High levels of anxiety on Sundays in anticipation of Monday morning analysis paralysis…
Justifying the hours you spent on a deep dive on bringing forward your pre-Fall drop to take advantage of more time to sell your highest priced products…
ONLY TO FIND that mother nature is mad at EVERYONE and has extended summer temperatures well into October.
AND because the global pandemic has created chaos in your supply chain, your pre-Fall collection may not even arrive in the Fall.
Okay, let’s take a breath and first examine the current state.
Most retailers today plan far in advance, from 52 weeks in advance to as much as 3 years for truly innovative products.
Planning so far in advance has advantages, of course, but can also be detrimental to your business, especially if there is a drastic shift in customer demand and all anyone is wearing is athleisure and stretchy pants.
Suddenly, casual comfort-wear is on the rise and formal wear is down 100%.
The more we learn from the customer and what they want, we must respond by giving them the products they are looking for at the right time, where they like to shop, whether it be in store or via Tik Tok.
For sure the pandemic exposed planning teams, but it also uncovered the reality of planning too far ahead without the support of data and technology to help predict what the customer might actually want.
Sales history and past-season trends are just not enough for planners to build an assortment plan, and let’s be clear: gut feelings need to be thrown out the window.
Planning a product mix a year out, without the right tools, could break your business.
And your planners will most definitely blame themselves.
Forget about changing your buys once the retail landscape changes. Flexibility in-season is non-existent and getting out of an order is as heart-wrenching as throwing away your very first, completely worn-out, tattered and destroyed, designer bag that you bought with your first paycheck.
Going Off Price
Let’s pause for a minute and take a deep dive into the treasure-hunting world of off-price stores re: TJX and The Rack.
Capitalizing on the fact that retailers must get out of discounted inventory and planning product assortments based on actual lead times is not rocket science.
And it runs contrarian to traditional retailing.
Not only are off-price retailers buying excess products that full-price retailers can’t sel,(or goods that shipped late because of supply chain disruptions), they are also giving traditional retailers a run for their money.
Working on an in-season planning model and a weekly open-to-buy (OTB) that allows for buyers and planners to shift and adjust to shopping trends almost immediately changes the way we think about long range planning and seasonal plans.
I asked one of my merchant friends at an off-price retailer, “how often are you buying product?”
She said “every damn day.”
Here is the beauty of an off-price model:
- Deals are abundant. Retailers are always looking to get out of inventory for a multitude of reasons.
- Disruption is constant. Blame COVID, cotton bans, ships stuck in the Suez or the supply chain “crisis.”
- Get what the customer wants. A weekly OTB gives buyers/planners the ability to follow the deals.
Lastly, off-price planners and merchants work much closer to market by developing and buying product based on the actual lead times of the business.
The off-price model is liquid because of the ability to plan in-season.
The moral of this story: Don’t discount off-price retail and definitely take a page out of their book.
Imagine if we actually did free up more OTB to buy closer to the season and have the ability to immediately shift into products that customers are looking for.
Imagine giving planners the time and the space to marry the art and science of planning by empowering them with smart tools that enable them to plan closer to market.
Imagine removing manual and redundant tasks so planners can develop assortments that are aligned with what the customer wants.
Imagine spending time infusing innovation into the assortment plan instead of trying to get out of products that you know will never sell because the customer prefers to wear leggings this year instead of tuxedo pants.
Imagine. If we can save our planners.
Talking Shop – In Conversation with Brandon Rael🎙️
We continue our discussion on department stores, focussing on Macy’s and Lord & Taylor with our friend and former merchant, Brandon Rael.
We had a lot to discuss and took a deep dive into Lord & Taylor’s evolution, what Macy’s could be up against, and what it will take for department stores to truly stay afloat.
Grab a coffee or cocktail and tune in on The Merchant Life‘s YouTube channel or click below!
You can find Brandon on LinkedIn and Twitter for his POV on retail.
We round out this edition of the newsletter with recent content and appearances.
📰 My latest contribution for Forbes hit the news stands and we talk Macy’s and it’s push towards sustainability. The industry needs more transparency across its practices…from raw material sourcing and private label production to more visibility on the vendors retailers and brands get into bed with.
🔖 We talk grocery delivery on RetailWire and I had some thoughts on how Kroger’s latest move will put them head to head with Walmart and Amazon.
🎙️ The latest podcast series for The Retail Code with Gary Newbury are up on The Retail Code’s YouTube channel and we talk supply chain challenges that are facing retailers today. Are empty shelves inevitable?
🛍️ I join a few retail experts and we talk with our friends at Aptos on retail assortments, the shifts in customer behaviour and the shocks to demand.
Retailers will need to continue to adapt to this massive disruption and so much more.
Inside you’ll find:
- Top recommendations for new ways to differentiate and thrive in a post-pandemic landscape.
- Why evaluating every aspect of the product lifecycle has become more important than ever.
- How agile supply chain operations and last mile delivery are now key differentiators.
Thanks to Aptos for keeping it real and always letting me talk ‘shop’!
My retail friends, please check out Aptos and all their retail rescuing solutions so that you can start saving our retail planners.