As many of you know, we are in the unique position of serving suppliers and ultimately retailers. In other words, we are in the middle. We are constantly being asked about the "state of retail" and what really goes on between the buyer and supplier. That said I put together a little wish list of what I would hope buyers' and suppliers' new year's resolutions would be.
Buyer New Year's resolutions we would like to see:
1. Take some chances.
We're all still recovering from last year's disaster and no one knows what 2010 will bring. That said, retail is about taking chances and providing the end consumer with a compelling reason to buy. Risk aversion makes for a very boring sales floor, especially in an environment where many retailers expect their suppliers to financially support them. Suppliers are less willing to show you the latest and greatest, and stick with basic product they know you can sell. At the end of the day your sales floor looks boring and unoriginal- which doesn't compel a consumer to buy. My prediction is those retailers that take risks this year will be the winners.
2. Bring an ample supply of "open to listen" to all your meetings.
Macy's gets a gold star for creating and standing behind the My Macy's initiative. Macy's buyers have been more open than ever to taking action based on their vendor's recommendations. From reconfiguring size scales to allocating based on demographics we have seen increased sales and improved inventory productivity in a short time. Suppliers know how limited the buyer's resources are and many stand ready and willing to help them. Other retailers should take note of this strategy and apply it accordingly.
3. Build confidence amongst your vendor base.
As a buyer I had a very different perspective of what a supplier's role should be. And likewise many of our clients have to choose their words carefully when talking about their buying "partners". Actually both have the same common goal- increase sales and profit- and not at the expense of their partnership. In my last buying assignment I began to see what an incredible resource my vendors could be. They provided trend information, competitive analysis and market share information. My advice to buyers is to elect a few of your vendors to be "trusted advisors". In return, be fair about markdown support, continue programs that have been successful with the same vendor and praise them when it is due. Suppliers are not made of money - We have already seen many of them walking away from doing business with our Nation's biggest retailers to survive.
4. Develop a compelling assortment and market the heck out of it.
With all the retail consolidation it is more important than ever to be sure your assortment is compelling, exciting and saleable. But even the best assortment is worthless if it can't be executed in an exceptional way. To stay in the game you have to come up with and communicate a cohesive strategy that translates from Home Office to Department Manager to Sales Associate. Your vendors will be more willing to support you when they see the success and know you can execute.
Supplier New Year's resolutions we would like to see:
1. Have a little faith.
It sure can't be easy being a buyer today. Resources are scarce, layoffs are happening everywhere and making a slight merchandising mistake means no bonus. Suppliers, you've got to understand that working for a retailer is one of the toughest jobs - They are held 100% accountable for their numbers but can only control 20% of the things that will make them successful. So if a buyer doesn't immediately fall in love with you or your ideas be patient, keep your cool and keep trying. If what you offer is truly a good idea it will eventually be heard.
2. Be smart about where you sell.
You've got great products and brands. Retail is like survival of the fittest- the best always survive. Be sure the products you pitch are right for each of your customers. Study each retailer's merchandise philosophy and strategy and align your lines accordingly. Study your profitability by retail account and see where you get the most bang for your buck. Understand that some retailers may be "loss leaders" for you to promote your brand, give you market presence, at the expense of profitability. Put together a short term plan to get your brand out there, and a long term plan to sustain it. Or bypass all of this by creating a product so original, so incredible that demand exceeds supply.
3. Kick it up a notch.
Buyers see hundreds of suppliers, many pitching the same product. You've got to stand out. The same way a buyer needs to convey a compelling merchandise message to the consumer, you need to give the buyer a compelling reason to buy from you. Aim to become a trusted advisor who can help them manage the business.
4. Face reality.
Easy for me to say, I'm not the one paying a higher cost on capital because I have to warehouse goods or cutting those "financial assistance" checks (although we are helping to reduce them). Yet this is the reality of retail right now. You have to get better at what you do - from buying raw materials, production and supply chain to making allocation recommendations to the buyer. Doing nothing will not solve the problem; you have to make real changes to be profitable today.
As for our New Year's resolution: To work harder than ever to help ensure our industries' profitability.
Jim Lewis
Founder and CEO
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