Four Pillars of Successful Retailing – Part 1
By Jim Lewis, CEO Enhanced Retail Solutions LLC
As I mentioned in my last blog, I really enjoy watching the numbers this time of year. The last 2 weeks have not been disappointing. I noticed more shelves starting to fill up leading up to Christmas and then empty out the day before. At a local mall I enjoyed seeing (what felt like) pre-pandemic traffic levels. I saw longer lines in most stores. A few crazy people complaining about not having this or that. Perhaps they haven’t been following the news for the last year. It was a lot quieter. What I mean by that is less people talking because they were wearing masks.
I saw several promotions in play, lively merchandise presentations, and not enough help. No surprise. But it reminded me that the fundamentals of retail have not changed. Like for thousands of years. The process of procuring goods and the logistics that go along with that certainly have. It made me think of what’s fundamentally required to be successful at retail today. I came up with these 4 things: Merchandising, Entertainment, Financial Planning and Data Science. They are all inter-related but require different skills sets. The blending of creativity and science must be in balance.
The 4 Pillars
It starts with determining the products and merchandise mix that will appeal to your customer base.
To attract those customers, you need to entertain them. Draw them in with marketing, value, convenience, and an emotional connection that makes them feel good.
To help with all that we need data. Good thing is we have a lot of it now and the tools to make it useful. Drawing conclusions and acting on the data has improved over the last few years. However, most retailers (and suppliers) still have a long way to go in using data to improve their inventory productivity and allocation. We track lost sales based on store level POS data and even some very sophisticated retailers leave money on the table.
None of this would be possible without money, which is why strong financial planning and capital are equally important.
Each of these topics have insights and lessons of their own. Over the coming weeks we will look each one in more detail. In part 2 we will take a closer look at Merchandising and Entertainment.
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