The Retail Ten Commandments

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The internet is rife with historical perspective on the topic of The 10 Commandments. Without becoming overly philosophical perhaps most would agree that The 10 Commandments are general rules that if adhered to would lead to a more enriched life. Break the Commandments often enough and life would most likely become increasingly more challenging.

Outlined below are my 10 Commandments for Retail. Yours may differ. My list has evolved over the past fifty years of selling and buying merchandise managing buyers and consulting with all types of retailers.

Commandment 1: Treat everyone fairly and with respect.

I learned very early on that you meet the same people going up that you do going down in this business. One example: The vendor that has what you feel is an unimportant line today may someday have the hottest line going. When possible extend everyone the courtesy of a look. You don’t always have to buy but it’s a good practice to look. One thing you can count on in the retail business is change.

Commandment 2: Never buy more than you can sell profitably.

On the surface this might appear to be obvious. If that is true why do so many retailers continually do it? Buying more than you are able to sell profitably is generally the result of not having – or not following – a merchandise plan. Often the results are excessive markdowns slower turnover higher operating expenses and – in some cases – interrupted cash flow.

Commandment 3: Mind your own business.

Instead of obsessing about compet-

Protect Your Business

Spend your time on ways that will serve your business and employees better. Protecting your business from over-distribution of lines is a good practice. All too often I hear complaints from retailers that their business is down because so-and-so down the street has all the best lines or is carrying the same product and on and on. Remember imitation is a form of flattery. Accept the compliment and work harder both on the lines you do have and on taking good care of your customers.

Commandment 4: Watch Your Operating Expenses

You might be surprised at how many retailers run a monthly profit-and-loss statement only to file it away and never look at it. For most retailers this segment of the business accounts for over 40% of every dollar coming in. You can have the best merchandising metrics in the world but if operating expenses continually exceed your margin you have a big problem. Begin by addressing occupancy and payroll for they are the two largest areas to watch.

Commandment 5: Thou Shall Not Live by Margin Alone

I have seen many businesses close – businesses that had very healthy margins but no cash. I prefer to focus on increasing sales volume and improving inventory turnover which increases cash flow. I have never encountered a store that had to close because sales volume and cash flow were just too good and they couldn’t take it any longer.

Commandment 6: Don’t Fear the Markdown

Markdowns are a part of the retail business – and they can have many benefits if you follow the rules. The number one rule is never let the cost you paid determine the markdown price. The quicker you recognize a problem and deal with it the more likely it will sell for a smaller price reduction. Use psychological pricing when possible as it can minimize the markdown percent.

Age if practiced regularly. For example an item that originally sold for my keyword00 marked down as one-third off would sell for roughly $67. The psychological price would be $69.99.

Commandment 7: Establish a Merchandise Plan and Follow It

If you are not already using an open-to-buy plan start. Guessing how much to spend seldom works in the long run. Do not spend all of your OTB on initial orders. Reserve money for fill-ins and promotional merchandise which is always available if you know how to look for it. A good rule of thumb is 50/30/20 but this can vary based on industry and vendor.

Ritchie Sayner

The 10 Commandments of Retail

Ritchie Sayner

Continued on page 17

Published in the September/October 2019 issue of Shoe Retailing Today Copyright © 2019 National Shoe Retailers Association Tucson AZ www.nsra.org. All rights reserved.

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Markets for the cities listed above. This category has evolved over the past two decades. As a train commuter to New York City I saw the “Wall Street” businessmen of 25 years ago wear either an Alden or Gucci loafer with their suits. Today’s young financial workers are opting for more casual looks. This can range from a suede chukka to a cognac wing-tip lace-up boot with a sport coat worn with 5-pocket pants. This look is quickly taking a greater part of the pant market share.

Office Attire Footwear

This category is probably the fast-

Fast Growing Category

In both men’s and women’s fashion this is the fastest growing category and has the broadest range in pricing for both footwear and clothing. It appears that all of the tech workers based in the Pacific Northwest as well as those in northern and southern California dress casually many with a “luxury casual” sensibility. The main difference between them and their co-workers is probably pay scale. They can buy cashmere tops with a fine wool 5-pocket pant and either a luxury sneaker or a fine Italian moccasin without a sock. Their lower-earning counterparts will buy the same outfit and footwear at a lower price—but the overall look is the same.

Service Industry

In both men’s and women’s fashion this is probably the largest category as it employs close to 50% of all U.S. workers. A lot of this is now sneakers starting at my keyword00 and up to the designer end with slip-resistant bottoms and some with steel toes. Many in all walks of the service industry wear uniforms. This footwear has evolved through the past few decades from a “garage oxford” to designer sneakers. This is a very important sector—and once again you want to sell them two pairs so they do not wear the same pair each day.

Teenagers and First Jobs

In men’s fashion many of the younger men will move from sneakers to “their dad’s shoes”—moccasins and chukka boots.

Seasonal Shoes

This category is dwarfed by the women’s business. Outside of a Teva sandal for spring and a winter boot that’s it as far as seasonal shoes go for the average customer. In the luxury business fur-lined chukkas do well in the northern tier and for the summer nice boat shoes.

The Bottom Line

The bottom line is that there are many…

Categories of Footwear for Both Men and Women

That’s without going into specific genera such as hunting fishing yoga individual sport shoes and overall athletic which on its own is extremely diverse. No one expects one store to carry all of these categories but the important point to remember is to know your customer base. Focus on their needs and ask more questions about both their work and what they do during their off-work time and you may find additional categories of footwear to sell them.

Scott Prentice

Scott Prentice is an analyst with Blacks Retail. He has been an executive in the footwear industry for 30 years starting with running a division of H.H. Brown followed by stints with Street Cars Bruno Magli Bally of Switzerland North America Calvin Klein Women’s and Haflinger North America. He can be reached at 203-220-9422.

Commandment 8: Minimize Seasonal Carryover

Clearly there are instances where it might make economic sense to carry over seasonal inventory from one year to the next. However in general this is a bad practice for a number of reasons. Among them being if the item didn’t sell this year will it sell more readily next year? Another reason: it ties up cash and slows inventory turnover. And the list could go on.

Commandment 9: Go to Market Regularly

Get out of the store or office and get to market. Much can be learned by interacting with others in your industry. Shop for and test new lines often. Your competition is doing so and you had better do it too.

Commandment 10: Maintain a Positive Attitude and Remember the Customer

Nothing is more contagious to your staff and by extension to your customers than attitude—yours! Nobody wants to work with or shop at a store with negative energy. Keep the vibe positive. I love the saying that a fish rots from its head down. Don’t be a rotting fish! Remember that the customer is #1. Without them your store would not exist.

Consider the Most Important Retail Commandments

Email me yours at ritchie@arsotb.com – and don’t worry if they don’t add up to ten. A shorter list – or a longer one – may be exactly right for your company.

• Ritchie Sayner with Advanced Retail Strategies LLC is an affiliate of merchandise planning company Management-One.
• Sayner’s book Retail Revelations: Strategies for Improving Sales Margins and Turnover is available on Amazon.

Sayner continued from page 13
Matching Footwear continued from page 12

Summary of Retail Commandments

The article outlines Ritchie Sayner’s “10 Commandments for Retail” developed over fifty years of experience in the industry. These commandments include treating everyone fairly buying only what can be sold profitably and maintaining a positive attitude among others. Sayner emphasizes the importance of having a merchandise plan managing operating expenses and adapting to change to ensure success in retail.

“Remember that the customer is #1. Without them your store would not exist.”

Real-World Examples of Retail Commandments

The following examples illustrate how the retail commandments can be applied in real-world scenarios to enhance business operations and customer satisfaction.

• A small boutique owner regularly attends fashion trade shows to discover new trends and products aligning with Commandment 9: Go to Market Regularly. This practice helps them stay competitive and offer fresh merchandise to their customers.
• A national retail chain implements a detailed open-to-buy plan reflecting Commandment 7: Establish a Merchandise Plan and Follow It. This strategy prevents overbuying and ensures that inventory levels match consumer demand optimizing cash flow and reducing markdowns.
• A local shoe store emphasizes customer service and a positive shopping atmosphere in line with Commandment 10: Maintain a Positive Attitude and Remember the Customer. The store trains employees to greet every customer warmly and assist them with personalized recommendations fostering customer loyalty and repeat business.

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