Part 4:
Retail is an industry that demands resilience, adaptability, and a keen sense of strategy. My journey has been marked by numerous challenges, each one a learning opportunity that has shaped my career and approach to business. In the previous three parts, I map my journey through corporate retail. But what do I actually do? Hopefully, the next few parts will explain this in a bit more detail?
One of the fundamental aspects of retail is understanding what customers want to buy. There have been many times when I’ve moved into a new department and inherited a stock problem. Sometimes, a drop in a trend hadn’t been anticipated, leading to overstocks. Other times, a new area was designed and bought in excessive quantities because the Buying team became overly optimistic about its potential. This can result in years’ worth of stock sitting in the warehouse, racking up storage costs and aging. The important lesson here is to work out how to mitigate the risk in your strategy. What information is available to help inform you about how much is needed to be bought and how is it going to affect the profit of the company if it goes wrong?
On the flip side, when customers love a product and it flies off the shelf, maintaining that momentum becomes crucial. How can you react to trade efficiently? Clear and open communication with suppliers is key to unlocking this potential. Understanding the supply chain and how you can reduce the lead time within the critical path are key considerations as part of the planning process.
When my role moved from Jewellery to Fashion, I hadn’t appreciated quite what the difference in product would entail. During my time at BHS working in the lingerie department, I started to understand why it was important to not just have an option count but to keep an eye on the SKU count. Having all products in all sizes could bankrupt a business so balancing customer desires with cash flow is paramount. It is, also, where I learnt about cannibalisation. Are you offering choice to the customer or is the product just too similar to something else. By not being ruthless on options then you can run the risk of splitting sales, working less efficiently and making less profit. Understanding how many options you need is crucial to maintaining a profitable business.
Predicting market demands is never easy, but it should be an integral part of your strategy. What levers can you pull when sales are above or below plan? My advice to everyone is to have a plan in the first place; otherwise, it’s difficult to gauge success. Then, as you trade through the plan, react to customer demand and use these lessons learned for future seasons.
