Wishin’ and Hopin’ SRT Mar. 2015
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.
Background
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 but most of the time it doesn’t.
The W&H Strategy
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.
Common Traits
- The W&H retailer probably doesn’t have a solid marketing strategy either.
- Other typical traits might include not paying attention to freight costs.
- Ignoring current market rates on leases.
- Overlooking 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
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!
Begin now to make things better by year end.
If the W&H Strategy Sounds All Too Familiar
There are many things you can do now to ensure a profitable year. With a full three quarters remaining in the year you have time to make adjustments to your merchandise plan but don’t put this off. Cash is king in the retail business.
Merchandise Management
- Make sure that all old merchandise is discounted so that it will be gone by the end of March if possible.
- Ensure that seasonal classifications (i.e. winter footwear slippers etc.) have realistic stock levels if carryover inventory is needed.
- If you haven’t already you will need to aggressively markdown NOW styles sizes and colors on low performers to accomplish this.
- 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 and that you are not out of balance.
Operational Adjustments
- Review operating expenses and make adjustments if 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.
Customer Focus
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
Summary
The article discusses the pitfalls of the “Wishin’ And Hopin’” (W&H) strategy in retail where businesses operate without a clear plan leading to missed opportunities and poor financial outcomes. It highlights the importance of proactive merchandise management strategic planning and customer focus to avoid the reactive nature of the W&H approach. The author emphasizes the need for retailers to make operational adjustments and focus on customer retention to ensure profitability.
“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 often manifests in various ways across different retail environments. Here are a few real-world examples that illustrate this reactive approach:
- A small boutique that frequently orders new fashion items without analyzing past sales data. As a result they often end up with excess inventory of unpopular items leading to frequent markdowns and reduced profit margins.
- A local electronics store that fails to adjust its marketing strategy to include digital channels like social media and email marketing. This oversight results in missed opportunities to engage with a broader audience and increase sales.
- A family-owned grocery store that does not regularly review or negotiate their lease terms leading to higher operational costs compared to competitors who actively manage their leases.
