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CUTTING-EDGE MERCHANDISING
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Relying on technology can put you behind the times
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This is one of a series of articles written by Gail Cottle that offers practical guidelines on successful retailing.
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Great merchants get excited about what they do. They live for the adrenaline rush of selling. And this passion benefits the company, the customer and the bottom line. But these days, much of the “wow” of merchandising is disappearing because of management’s increasing emphasis on technology over creativity.
The Information Age has brought about some wonderful advances. The Internet spreads news about the latest fashion trends at a rapid-fire pace. Just-in-time manufacturing makes vendor replenishment automatic, and point-of-sale terminals now provide immediate access to sales data. However, these advances do not represent a whole new way of conducting business; they are just another set of tools that merchants have in their arsenal.
The human element will always be critical in retailing. Why would a woman walking into a department store possibly buy one more black sweater? Because the unique features of that black sweater were pointed out to her by a salesperson — it’s the human connection that makes the sale.
And it’s not just on the selling floor that this connection with the customer is necessary — merchants, like salespeople, have to be acutely in tune with the times and the psychology of shoppers. However, we are seeing an unfortunate increase in buying decisions based on mathematical formulas, which is resulting in a lack of product mix, a lack of color, a lack of variety — in short, a lack of excitement — which is deadly when you consider that shopping at its core is an emotional experience.
Ironically, a reliance on technology can make a merchant’s decisions out of date. Computer-generated figures are the report card for yesterday. By looking at the previous day’s sales report, I can tell, for instance, how many dresses sold in what colors and sizes. This is very useful information. However, what these numbers will never be able to tell me is why these dresses sold. Does the dress have an especially appealing fabric, a forgiving fit, a new neckline that is in vogue? And even the best set of figures will only tell me what I sold, not the selling opportunity that I missed.
Yet so many merchants are being expected to make their buying decisions based on computer-generated reports. Or worse yet, their role is being usurped by financial planners who are experts at crunching numbers but who never set foot on the salesfloor and know little about the lifestyles of their customers. The content of the inventory mix comes second to managing inventory dollars, meaning that customers often can’t find what they’re looking for.
The reality is that fashion does not follow a neat mathematical formula. One year, the numbers might indicate a gradual downward trend in denim as a category, but since denim has historically been a strong seller, a financial planner will suggest sticking with the status quo. However, an experienced merchant with an intuitive instinct for what is happening in the marketplace will understand that denim is “out,” that inventory needs to be reduced in order to make room for the “hot” new category.
Retail is a business of exciting people, of enticing them — and the “wow factor” shouldn’t be undervalued. When I was a buyer at Nordstrom, it was common for an item to hit the salesfloor and immediately I’d have 10 salespeople in my office requesting more to replace the ones that had already sold out. There was a “gotta-have-it-right-now” mentality. There was a buzz in the air around certain products that guided our merchandising decisions, an excitement that a computer-generated report will never be able to match.
Technology is an incredible thing, and it should improve our decision-making process, enabling merchants to react faster and reorder those items that are selling well. However, technology shouldn’t make us lose sight of the other side of the information factor: the customer factor. Merchants have to be on the salesfloor, in the arena with customers. The old maxim still applies: “Know thy customer.” What do your customers like? What lifestyles do they lead? What do they aspire to?
Even as stores grow bigger and financial systems become more complicated, selling remains an old-fashioned business where the key is creating a psychological connection with your customer. And at a certain point, it’s time to put computer-generated reports aside and put imagination, risk-taking and creativity to work.
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