Wishin’ and Hopin’ Nov/Dec. SRT
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 #6 on the 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 who 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.
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.
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 this retailer ends up with little or no profit season after season and year after year barely staying afloat and not growing or improving. The vendors and the landlords are the ones making the most money in this case unfortunately… not you. In some cases you are simply buying yourself a job!
There is still time left this year
Preparation for Next Year
If the W&H strategy sounds all too familiar there are still things you can do now to prepare for next year. With a full two months left in the year make plans now to ensure that all old merchandise is discounted so that it will be gone by the end of December.
- See that seasonal classifications (i.e. winter boots slippers etc.) have manageable stock levels going into season end.
- If you haven’t already take markdowns NOW on styles sizes and colors not performing as they should.
- If you have OTB to spend for opportunistic buys (i.e. Off-price) contact key vendors to see what might be available to freshen the presentation during the transition period between now and the arrival of spring goods.
- Review your spring on-order once again to make sure all bases are covered and that you are not overextended.
- If business is good pay off credit card and attempt to reduce lines of credit.
In January we will discuss what steps can be taken to make sure 2015 gets started on the right foot. Make an effort on the items mentioned above and you won’t have to go through next year Wishin’ and Hopin’ for profits.
Ritchie Sayner
Summary of “Wishin’ and Hopin’ Nov/Dec. SRT”
The article critiques the “Wishin’ and Hopin’” (W&H) strategy among retailers highlighting how reliance on hope rather than strategic planning often leads to poor business outcomes. It emphasizes the importance of proactive planning timely markdowns and inventory management to avoid the pitfalls of the W&H approach and suggests actionable steps for retailers to prepare for a more profitable future.
“A goal without a plan to achieve it is nothing more than a wish and ‘hope’ is not a strategy at all.”
Real-World Examples of the W&H Strategy
The “Wishin’ and Hopin'” strategy as described in the article is a common pitfall for many retailers. Here are a few examples of how this approach manifests in the real world:
- A small boutique owner regularly purchases trendy items without analyzing past sales data or customer preferences hoping they will sell out. This often results in excess inventory and forced markdowns at the end of each season.
- A local electronics store fails to create a marketing plan or promotional calendar. Instead they sporadically offer discounts when sales are low missing opportunities to strategically drive traffic and increase margins during peak shopping periods.
- A chain of home goods stores does not regularly review or adjust their inventory distribution across locations leading to stockouts in high-demand areas and overstock in low-demand areas causing lost sales and increased storage costs.
