8 TODAY JUL-AUG 23
Ok so you dodged a few bullets in the past couple of years. Covid lockdowns are in the rear-view mirror supply chain issues for the most part are yesterday’s news and staffing issues are at least better. Things are going reasonably well as measured by sales increases against last year with customers shopping once again. Back to business as usual right? Time to relax? Fuhgeddaboudit! You’ll have plenty of time to take life easy when you sell or retire. P.T. Barnum once said “comfort is the enemy of progress.” If you are too comfortable you might be tempted to stop aiming for improvement and that could be dangerous. I would suggest stepping out of your comfort zone and challenging the status quo. Reviewing your retail operation store by store department by department class by class and vendor by vendor is a wonderful starting point.
If you are like many retailers you have most likely encountered a classification or category that at one time or another was underperforming. In this article I will point out some things to look for that might help you identify and hopefully correct that issue. First off the warning signs of a troubled category must be recognized. Secondly the cause of the problem needs to be determined. Finally a strategy needs to be developed and executed properly in order to fix the underperforming category.
Signs That a Class Might Be in Trouble
Here are a few indicators that should set off some red flags. Things to look for are as follows:
- Sales that are trailing last year for several consecutive months for no apparent reason.
- A decrease in maintained markup.
- No significant receipts of new merchandise in the past few months.
- Excessive markdowns.
- Stock-to-sales ratios begin exceeding plan causing inventory turnover to slow.
If one or any combination of the above is happening the next step is to begin by asking questions.
Questions to Ask
Has anything changed in the months since sales began slumping?
This could pertain to placement in the store vendors or even staffing to name a few.
Top Sellers and Slow Sellers
What are the top sellers in the classification currently?
What are the slow sellers how are they being identified and what corrective action has been taken?
Inventory and Vendors
How fresh and saleable is the current inventory? How many vendors are you currently buying from?
Product Selection and Pricing
Is the selection too broad? Are the price points right for the intended customer?
Product Overlap and Online Availability
Is there any duplication/overlap of products styles colors sizes etc.? Are any of the products carried in this class available online (most likely) and if so are you price competitive?
Assortment Plan and Shipping Policy
Is the assortment plan correct for the classification? If a significant portion of the sales in the category are sold online how does your current shipping policy compare to others?
Competition and Staff Training
Are you suddenly competing with your vendor and if so has this resulted in a loss in sales? Are your sales associates properly trained?
Overstock and Product Age
If you are over-stocked compared to your merchandise plan what can you eliminate?
How much of the product in the class is old? Over three months? Six months? One year?
Deep Dive into Subclasses
If you determine that there are multiple different items contained in the slumping category a deep dive into the subclasses will be needed to isolate the problem. You might find that there are very fast turning items in a poorly performing class that are being overshadowed by the poor performance of the rest of the category.
Once you have discovered the problem it’s time to create and execute a strategy.
Create and Execute a Strategy
- Have someone on the staff or marketing department study the web for influencers in the area to find out what is trending in the category. This should most likely be done by age group 30-40 40-50 over 50 etc.
- Assign a designated staff member to oversee the category and become the resident expert. This individual will oversee presentation as
How to “Fix” an Underperforming Category
Ritchie Sayner
Published in the July/August 2023 issue of Shoe Retailing Today Copyright © 2023 National Shoe Retailers Association Tucson AZ www.nsra.org. All rights reserved.
Create a Marketing Campaign
- Email blasts and social media content e.g. Instagram reels.
- If appropriate conduct vendor-sponsored clinics to educate sales associates and customers regarding features advantages and benefits.
- Consider sales contests for a limited time.
- Reach out to vendors for input assistance display ideas advertising money promotional merchandise and even samples for sales associates if applicable.
Implement and Review
Once a strategy is created and agreed upon it needs to be implemented.
Review your results weekly and tweak your strategy as needed to improve results.
By following the steps outlined of 1) identifying the problem 2) determining the cause and 3) implementing and monitoring a strategy the chances of improvement are greatly improved.
As a service to NSRA members I am available to discuss any unique situations not covered in this article. My contact information is listed below.
Ritchie Sayner is with Advanced Retail Strategies LLC an affiliate of Management One. Sayner’s book Retail Revelations: Strategies for Improving Sales Margins and Turnover (2nd Ed.) is available on Amazon. He can be reached at advancedretailstrategies.com.
Important Considerations
It’s also important to note that not everything ChatGPT says is true. At times it does produce inaccurate data and facts that are incorrect so be aware that like all information your brand produces ChatGPT’s writing still needs to be reviewed for truthfulness and accuracy.
New technology also comes with ethical issues that will need to be explored.
Plagiarism and Copyright Concerns
For example if ChatGPT can spit out a college essay or a short story how do plagiarism and copyright infringement come into play? If ChatGPT does make some mistakes that its users aren’t aware of does this perpetuate the spread of inaccurate information?
Credibility and Data Privacy
When we read information on the Internet how will we know if it came from a credible source or a chatbot? What data privacy concerns do we need to worry about? What risk does this pose for original thought and creativity? We can expect all of these to continue to be topics of conversation as the program continues to grow in popularity.
Marketing Implications
Overall it’s important to be cognizant about ChatGPT’s pros and cons so that you can make your brand’s marketing easier without losing your brand voice or providing false information both of which will quickly erode brand trust. At this time ChatGPT is by no means a replacement for your current marketing efforts but can be used as a helpful tool to brainstorm ideas for content generate outlines and provide a starting point for your copy.
About the Author
Allie Horner is the founder of Brand Bloom LLC a digital marketing and social media firm rooted in Milwaukee. She can be reached at allie@brandbloomllc.com.
ACBC’s Impact in the Footwear Industry
ACBC’s consulting services have already attracted many big names in the footwear industry such as Geox Missoni Balenciaga and Alexander Smith. They also have four of their own footwear stores located throughout Italy as well as in Amsterdam Dublin London and Beijing.
Sustainability Recognition
ACBC is the only footwear company in Italy to receive B Corporation status and in 2019 they were voted the “World’s Most Sustainable Shoe” at the Green Carpet Fashion Awards.
“Europeans seem to be way ahead of us in regard to sustainability” Denkler believes. “Usually about five out of the 10 presenters have sustainability-related proposals at the show but it seems like in North America customers don’t want…
To spend the extra money on a sustainable shoe.
ACBC has made it their mission to create sustainable footwear and to help other companies do the same.” For more information please visit www.ACBC.com.
“It was really interesting how new innovations can affect our industry in so many different ways” said Luck after the competition. “Being kind to the environment enhancing the shopping experience and improving on the features of shoes as we know them all have their place.”
Winners continued from page 7
ACBC creates its own sustainable footwear and also consults with other companies.
Article Summary
The article discusses the importance of continuous improvement in retail operations emphasizing the need to identify and address underperforming categories by recognizing warning signs determining causes and executing strategic solutions. It highlights the role of proactive management in maintaining competitive advantage and suggests leveraging marketing campaigns and staff expertise to revitalize sales. Additionally the article touches on the implications of using AI tools like ChatGPT in marketing stressing the need for accuracy and ethical considerations.
“Comfort is the enemy of progress.”
Real-World Examples of Retail Strategy and Sustainability
The concepts discussed in the article can be seen in various real-world scenarios where businesses have successfully identified and addressed underperforming categories or embraced sustainability.
- A well-known retail chain noticed a consistent decline in sales for their electronics department. By analyzing customer feedback and sales data they identified that their product selection was outdated. The company revamped their inventory with trending gadgets and hosted in-store demos resulting in a 20% increase in sales over the next quarter.
- A fashion retailer faced challenges with overstocked seasonal clothing items. They implemented a targeted marketing campaign with flash sales and exclusive discounts for loyalty program members. This strategy helped clear excess inventory and improved cash flow setting a precedent for future inventory management.
- ACBC a footwear company has set an example in the industry by achieving B Corporation status for their sustainable practices. They not only produce their own eco-friendly shoes but also consult other brands to adopt sustainable methods showcasing their commitment to environmental responsibility.
