Does Retail 101 still apply? Before we can answer that question, we have to consider what exactly Retail 101 is. The retail mix is a good a place to start as any. Consider these principles (I hope) most of us would agree is Retail 101: PEOPLE 1. Staff are critical to your success. 2. Use your own time to add value and manage – not only to serve behind the counter. 3. Know thy customer. PRODUCT 4. Focus your core product range. 5. Take stoc
k annually at least (even a rolling stocktake) – no exception.
6. Buy your stock to a budget (OTB).
PRICE
7. Consolidate price points (avoid price point proliferation) for each sub-category.
8. Never discount unless a product falls below the benchmark stockturn rate.
9. There are more than 20 different types of price reductions you can negotiate with your suppliers – fight hard for your business.
PROMOTION
10. Doing the same old will get the same old results – be brave, be different.
11. If it works, don’t change because you are tired of it.
12. Use your suppliers and work with their calendars and resources for marketing activities.
13. Community engagement should be at the core of your activities – and the sales will follow.
PRESENTATION
14. Good displays sell silently: visual merchandising matters.
15. Be smart with product/category locations.
16. Even the dirtiest, poorest, most ignorant customer does not love a dirty store – they will leave as soon as there is an alternative.
17. Your fitout should be substantially refreshed every seven years. And nothing should be allowed to be older than 10 years.
PLACE
18. Allocate product space proportional to their gross margin contribution as far as practicable.
19. Reduce non-selling space to <15% of GLA (sub-let if you can or innovate a new use).
20. Target a benchmark floor space productivity (in shopping centres, for example aim for more than $8000/sqm based on annual sales).
In addition to the six P’s of retail, a few other bonus observations.
GENERAL
21. Systematise everything to minimise errors and risk. From opening and closing hours though to how you cash up.
22. Pay your bills on time then you can demand the same respect.
23. Communicate when you have issues – ask for assistance from anybody and everybody and never stop learning. (There is a big difference between 20 years’ experience and one year experience 20 times over.)
24. Don’t worry about the competition – do your own thing and do it well.
25. Make sure your system (POS/database) is 100 per cent current and that you can make accurate, meaningful decisions about your agency.
26. Measure all the metrics that matter and make decisions accordingly.
Of course there are a few more and we look forward to hearing from readers what they may want to add to the list.
But to answer the opening question: does this still apply in the multi-channel world?
In my view there are now a few additional principles relating to how channels would integrate that will also apply, but the fundamentals remain the same. For instance, the price variable would now also have to include ‘price harmonisation’ (between channels) and so forth.
But that does not change the basic fact that the principles of retail have not changed. Whatever the buzzwords about ‘experience’ suggest, successful retailers are the ones that apply these fundamentals.
Dennis
Ganador: thinking differently about how to enable performance
PS: Can you help me pick some artwork?
PPS: We are drafting the paper on the state of e-commerce and will report back soon.