Avoiding Retail Pitfalls: Why Wishin’ and Hopin’ is Not a Business Strategy

14 MAR-APR 15

If you are of the age that you can claim one-time ownership of a transistor radio then you might just remember the song “Wishin’ and Hopin’.” I recently heard this tune while listening to the “oldies” station on my car radio. Ironically I had just finished speaking with a retailer who had used the exact same words as we discussed his merchandising strategy and year-end outlook. The coincidence really struck me.

Dusty Springfield’s catchy tune reached Number 6 on the music’s top pop charts in 1964. Though “Wishin’ and Hopin’” (“W&H” going forward) is much better suited for a song title than a business strategy I still encounter many retailers who either fail to plan or don’t effectively implement or execute their plan. These retailers end up with W&H results: Sometimes it works out most of the time it doesn’t.

Planned or Haphazard?

Let me lay out what I mean by the W&H strategy. The W&H retailer typically buys merchandise with no clear thought of how it might fit into the existing assortment. New arrivals are distributed among stores in a predetermined order and are seldom (if ever) transferred to balance the assortment. This ultimately leads to missed sales opportunities in some stores while potentially creating unnecessary margin problems in others. In-season markdowns are not addressed in a timely fashion and fill-in orders are hit-and-miss. Promotional merchandise is not sought out regularly which would help the store build volume and margin. The W&H retailer probably doesn’t have a solid marketing strategy either. Other typical traits might include not paying attention to freight costs current market rates on leases employee selling expenses and inventory shrinkage.

At RMSA we see this scenario all too

Often

The W&H merchant enters each new season full of optimism yet is often left disappointed at season end. The retailer is unprepared to deal with day-to-day reality due to inadequate tools poor training lack of time or insufficient manpower. You can recognize this merchant by his “Ready Fire Aim” approach to most problems. This is management by crisis because the day is dominated by the urgent never leaving time for the important. In other words valuable time is spent putting out small fires while the big blaze continues to burn out of control. Because of these and other problems the W&H store is left wishin’ for a different outcome than it experienced in the past – wishin’ customers will like the selections he or she has made and hopin’ that the store will be profitable at year end. This really isn’t much different than playing the lottery. Most of the time you end up with the same results.

Be Proactive

W&H is a reactive strategy not a proactive one. A goal without a plan to achieve it is nothing more than a wish and “hope” is not a strategy at all. Many times a W&H retailer ends up with little or no profit season after season and year after year barely staying afloat and not growing or improving. Unfortunately the vendors and the landlords are the ones making the most money in this case not the retailer. In some cases in fact the retailer is simply buying himself a job.

For better results make changes now.

If the W&H strategy sounds all too familiar there are things you can do now to ensure a profitable year. With a full three quarters remaining in the year there is time to make adjustments to the merchandise plan – but don’t put this off. Cash is king in the retail business. With that said:

Wishin’ and Hopin’
Ritchie Sayner
Ritchie Sayner

The W&H merchant enters each new season full of opti-

Mismatched Expectations

Yet is often left disappointed at season end. The retailer is unprepared to deal with day-to-day reality due to inadequate tools poor training lack of time or insufficient manpower. You can recognize this merchant by his “Ready Fire Aim” approach to most problems. This is management by crisis because the day is dominated by the urgent never leaving time for the important.

Published in the March/April 2015 issue of Shoe Retailing Today Copyright © 2015 National Shoe Retailers Association Tucson AZ www.nsra.org. All rights reserved.

Group Dynamics

All branches of one family in one group or perhaps using geography to get diverse folks together putting into groups family members who don’t see each other that often. Invite volunteers to summarize the group discussions and report back findings. Be careful not to make assumptions about who should or might come forward to volunteer – many families are surprised at which members get so energized that they unexpectedly volunteer.

Setting Goals

Once you have volunteers in place write down goals and timelines and the names of the individuals who said they would work on agreed-on tasks. Set a time for your next meeting and begin it with updates on the list.

Sound like a business meeting? In essence it is – and adding this familiar discipline from your business into your family interactions will help you create and execute business expansion plans. You’ll show your family how to listen plan and execute and give them encouragement to being accountable for family business and individual goals and actions.

Please note: The meetings suggested especially at the family level are not for the faint of heart. You may need assistance.

Most families do.

Reach out for qualified help if you think (or fear) you’ll get into topics and discussions that are hard or controversial. Outside facilitation and assistance make it possible to discuss hard topics. That said it’s important to have the right assistance – so ask current trusted advisers (attorneys accountants financial planners or others) who they would suggest. Some of their other clients have undoubtedly tapped a facilitator or moderator for business reasons; they can help you find assistance. (A national listing of consultants is included in the resource section following this article.)

3. Asserting/Maintaining Integrity

Creating a culture of accountability is like training for a triathlon. It takes daily discipline recovering from injuries dealing with and even encouraging vulnerability and celebrating victories – small and large. You must walk the talk and be a role model holding yourself accountable.

Carol Wittmeyer Ed.D. is a faculty member with Chicago’s Loyola University Family Business Center a member of NSRA’s NextGen faculty and an associate professor of management at St. Bonaventure University.

Resources

For more information on the strengths of vulnerability watch Dr. Brene Brown’s Ted Talk:
http://brenebrown.com

For a listing of family business consultants visit
http://www.ffi.org/?page=consultantsus.NextGen

continued from page 13 so that it will be gone by the end of March if possible.
> See that seasonal classifications (i.e. winter boots slippers etc.) have realistic stock levels if carryover inventory is needed.
> If you haven’t already review current selections and take markdowns now on styles sizes and colors not performing.
> Any available OTB dollars should be reserved now for fill-ins on key styles and sizes and for opportunistic buys (i.e. off-price).
> Review remaining spring orders to make sure all bases are covered.

Review operating expenses and make adjustments if expenses look out of line with industry benchmarks.

Review marketing strategies – including email blasts and social media – for effectiveness.

Reassess fixtures signage lighting window presentation and in-store display to determine if updates are warranted.

Perhaps most important of all is to make sure that every employee beginning with you is doing everything possible in this competitive retail environment to exceed customer expectations. We all need and want new customers but it is much easier and less costly to keep existing customers happy and coming back than it is to find new ones.

Make an effort on the items mentioned above and you won’t have to go through the rest of this year “Wishin’ and Hopin’” for higher profits at year end.

• Ritchie Sayner is vice president of business development at RMSA Retail Solutions. To follow him on Facebook please go to www.facebook.com/RitchieSayner.

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Ritchie Sayner

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