[Biz] This is how you improve the sell through rate of your new products while fostering collaboration in your retail brand.
Put your operations team and your store managers in the same room 40 minutes per month and watch magic happen.
I've recently heard from a friend who has one of this super analytical jobs - a data driven person - in the corporate office of this really cool fashion brand the following comment:
“In the brands that I've worked in the past the store managers weren't involved in this kind of discussion, this was reserved for corporate, all they had to do was trust the process and be in the store to drive the sales"
If you agree with this statement, then today's post is an invitation to challenge that.
In this specific case the ‘discussion’ he was referring to was the decision around product mix and the inventory depth each store was set to receive for the new collection.
In his perspective the retail teams should trust that the people behind the computers can run the numbers and numbers don't lie. Well, don't they? And aren't we missing an extremely relevant aspect here, which is the subjective aspect of customer behaviour?
In a relatively small brand that produces low inventory, so much so that it risks selling out of a new product in the first days of the launch if they didn't bet on its popularity when it was time to run production, or that frequently runs out of sizings because of the production turnover time, putting all of our trust in numbers can make you very vulnerable to errors.
Back when I was working in the beauty industry the production and distribution of the inventory were quite intuitive and a lot of trust could be deposited on the numbers:
Look at the 200 SKU's available, analyze your previous 6 weeks’ sales average per door and take your forecast from there. For a new store you would find a comparable store - both in demographics and volume - and use it as a base to your forecast.
But when I moved to the fashion industry many layers of complexity were added to this process. Not only do you have to take in account the quite complex calendar of launches and productions, as you also have to beware of not over or underproducing betting on the pieces that will become more popular in the new launches.
And what happens to your forecast when you have prolonged periods of time that your stock is disrupted in several combinations of sizing x colour x fabric?
Different than selling hand soaps, that you can take the period of time of stock break and fill in the blanks with what you would have sold if you had them in store; with clothes it takes a complex architecture with the numbers to try and fill in these blanks. And even when you do, you can't ensure it's 100% accurate. Especially for new launches that has unprecedented new colour and modelling with no historical data.
And that's when your store team comes in.
The frontline staff are the people that best know your customers, their wishes and wants, and they will know which one of your new product launches will succeed in the stores. More than that, they also know better than anyone their specific store demographics - their behaviour, colour, sizes, preferences and even their names and favourite nearby restaurants - and are able to articulate in your customers’ behalf what they want to buy.
They also know which combination of sizing x fabric x colour tend to fly off the window and which ones will last until the end of your sale season, making it crucial for them to be involved in early stages of the definition of the inventory depth they will receive.
Not to mention that they are the people selling it and being held accountable for the sales performance of all your new products. They have a sales target, a lot of the times their salary depends on it, and if their size isn't available then there's simply no way around it and the sale will be lost, no matter how many times your operations team calculated the stock coverage by value times the sell thru rate to ensure the store target gets covered.
What they normally don't have access to is the analytical perspective of this inventory. And that where the collaborative work comes in.
There must be a moment when everybody gathers in a room, or a 40 min zoom call, to go through the inventory selection per door and combine the objective and the subjective aspects of the products sale forecast to make more certain and personalized shipments to your doors.
This simply shift will also bring your both objective and subjective results: a better product performance per door, a healthier sell through rate and NPL sales, less customers who get frustrated for not finding their sizing in your store and a more collaborative environment where the frontline staff starts to enter the corporate doors - which frankly is long overdue in the retail industry.
This is just one of the areas where we can start to challenge the status quo in the retail industry and get better involvement of the store managers in more strategic decisions.
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I'm a self-directed multi skilled leader with solid experience in strategy and operations of upscale retailers across Brazil, Australia, United States and Canada in the fashion and beauty industries. An ambitious leader and passionate creative at heart, I help upscale retail businesses deliver unique customer and employee experiences.
Currently working as Head of Retail for Haight Clothing in Rio de Janeiro and consulting independently for other upscale retail businesses.
Based in Canada + Brazil, available worldwide.