8 MAR-APR 21
One morning in the fall of 2020 the year of COVID-19 for those who are trying to forget John Schuler CEO of the Minneapolis-based chain that bears the family name decided to change things up a bit by playing a song during a meeting. Those in attendance included the merchandising team the marketing director and the retail general manager of his nine stores. The song was Kenny Rogers’ hit “The Gambler”. I assume the buyers marketing folks and operational people were looking around in somewhat of a bewildered state wondering just what was going on. This after all was not the typical way meetings were conducted at Schuler Shoes. What in the world was this all about?
Knowing John reasonably well this was his creative way to present the theme for 2021. His main idea being we survived COVID-19 we are all still standing and we’re not going anywhere. But this past year was a wake-up call for everyone that things in their operations need to change. (Author note: if this past year was a wakeup for Schuler’s it better be a wakeup for you too.)
Some Historical Perspective
“The Gambler” had actually been offered to both Willie Nelson and Johnny Cash before being recorded by Rogers and becoming the hit that defined his career. The album alone has sold over 35 million copies to date and in 1978 the single earned a Grammy for Song of the Year.
So… “For a taste of your whiskey I’ll give you some advice.”
Lesson #1
“If you’re gonna play the game you gotta learn to play it right.”
We are all in the game of retail and as with any game there are some basic rules that if not followed will eventually cost you. Until 2020 established retailers could get by with carrying more inventory than would be ideal. That is not a good place to be these days. Assortments are being streamlined vendors are being reviewed and SKUs not performing at certain ROI benchmarks are being
Aggressively Phased Out
In years past margin has been the big buzzword. Now the word of the day is CASH!
Lesson #2
“You’ve gotta know when to hold ‘em know when to fold ‘em know when to walk away and know when to run.”
You couldn’t write a better lyric for the shoe business than this. What are you going to move forward with? What are you going to phase out? This doesn’t only refer to vendors and merchandise but could also be landlords or perhaps even employees.
Lesson #3
“Every gambler knows that the secret to survivin’ is knowin’ what to throw away and knowin’ what to keep. ‘Cause every hand’s a winner and every hand’s a loser.”
To paraphrase every retailer knows that the secret to survival is knowing what styles or vendors to markdown and which ones to keep. Every order you place lease you sign ad campaign you approve employee you hire is a potential winner or loser.
Lesson #4
“And somewhere in the darkness the gambler he broke even but in his final words I found an ace that I could keep.”
Assuming you made a profit at least on paper the real loser hand would be to pay taxes on inventory that is not saleable. Consider this let’s say you are in a 30% tax bracket that means you will pay $30 in taxes on every my keyword00 cost item you count. Hopefully this didn’t happen but if you had that same item last year you paid taxes on it then too and you haven’t even sold it. YIKES! Talk to your CPA now and brush up on IRS laws on the worth of dated inventory but by all means get it out of the store. The last thing you want to do is have a paper profit and no money in the bank to pay the tax bill. The “ace” you can keep is turning unsaleable inventory into cash!
“There’ll be time enough for countin’ when the dealin’s done.”
Ritchie Sayner is with Advanced Retail Strategies LLC an affiliate of Management One. Sayner’s book Retail Revelations: Strategies for Improving Sales Margins
Turnover (2nd Ed.)
is available on Amazon. He can be reached at advancedretailstrategies.com.
Are You a Gambler?
Ritchie Sayner and John Schuler
Ritchie Sayner
In years past margin has been the big buzzword. Now the word of the day is CASH!
Published in the March/April 2021 issue of Shoe Retailing Today Copyright © 2021 National Shoe Retailers Association Tucson AZ www.nsra.org. All rights reserved.
Summary
In a creative twist to a company meeting John Schuler CEO of Schuler Shoes used Kenny Rogers’ song “The Gambler” to highlight the need for strategic changes post-COVID-19. The song’s lyrics served as lessons for the retail business emphasizing the importance of cash flow strategic decision-making and inventory management to ensure survival and profitability.
“If you’re gonna play the game you gotta learn to play it right.”
Real-World Examples of Strategic Retail Changes
The lessons from the article on adapting to changes in the retail environment can be seen in various real-world examples. Here are a few instances where businesses have successfully implemented strategic changes to thrive in challenging times:
- During the COVID-19 pandemic many restaurants pivoted to offer takeout and delivery services even if they had previously focused solely on dine-in experiences. This shift allowed them to maintain revenue streams and keep their businesses afloat despite dining restrictions.
- A major electronics retailer streamlined its product offerings by focusing on best-selling items and cutting down on underperforming SKUs. This strategy not only improved inventory turnover but also enhanced cash flow by reducing excess stock.
- A well-known fashion brand decided to close several underperforming physical stores and invest heavily in its online presence. This move helped the brand capitalize on the growing trend of e-commerce and reach a broader customer base while reducing operational costs.
