Black Friday and Cyber Monday have come and gone but the holiday selling season is far from over. The commentators have put their musings and predictions out there. Consumers will have the final word. The (so-called) impeding death of malls and stodgy chains will be further discussed. So, what’s a retailer to do? Was their holiday fate set several months ago when they planned it? Maybe, but it’s all about execution. Retail is hard work but built on the simplest of principles that are so often forgotten. That’s why I want to focus on the 2 most important- customer service and making sure inventory is turned quickly and appropriately.
It’s a war out there and there is no room for anything but exceptional service. This applies both in-store and on-line. The customer has so many choices and few tolerate mediocre experiences for the sake of getting the perfect item. A recent experience at Walmart.com proves poor customer service isn’t limited to brick and mortar. A holiday gift for our kids ordered 2 weeks ago still hasn’t arrived even though we’ve been given 2 specific delivery windows. They wasted our time- 2 days of “must be home to sign” and 7 calls to Walmart customer care. Our experience was that they could care less. Poorly trained call centers, lack of communication/visibility and too many cooks in the kitchen highlighted how Amazon will continue to beat them with their effective distribution formula. And this wasn’t the first time we had a problem with Walmart drop ship fulfillment (Walmart, please call us to see our Drop Ship Tracker software!). In fairness to Walmart, other items in the order that they had in their DC’s arrived very quickly.
On the other side of the spectrum, a truly wonderful experience can remind us why making a physical visit to a store can provide entertainment and be more fulfilling than just clicking a few buttons. At a recent trip to the mall- this one alive and well- I found associates in just about every store I walked into upbeat, eager to help and caring. I could tell some coaching had taken place. I got the shoes I needed and other items that I didn’t.
Now to inventory. Making the sale requires having what the customer wants when they want it and where they want it. During my store management days, I learned first hand how foot traffic and the velocity of sales changes so dramatically during the holiday. I think a good analogy is the ERS Star Loop- which is based on a concept created by USAF Colonel John Boyd. According to Boyd, decision making occurs in a recurring cycle of observe-orient-decide-act. An entity that can process this cycle quickly, observing and reacting to unfolding events more rapidly than an opponent, can thereby “get inside” the opponent’s decision cycle and gain the advantage. I know it’s an extreme example, but it holds true for retail. The holiday season is a microcosm of inventory flow at the lowest level. We work months in advance to plan our receipt flow just right. But during the holiday season, every day and in many cases every hour equals a week or month. Whoever can react to the consumer’s needs the quickest wins. A key is constantly replenishing stock through the day and monitoring what’s happening on the other side of the mall.
Suppliers play a key role as well. They should be studying sales and inventory at a greater frequency and seeing if they can provide support to quicken the pace of the decision loop. Those suppliers who are willing to put in the extra effort usually are rewarded with additional sales and become a more trusted advisor of the buyer. VMI (vendor managed inventory) can be a major advantage for retailers, especially at holiday. With the supplier constantly monitoring sales and using smart systems to check stock positions they can write orders every day. Depending on how fast they can move inventory through their fulfillment process the more benefit it brings.
So, the next few weeks will reveal the winners and losers and the commentators will come back with their post season “I told you so’s”. As for me, I’ll be stuck in a loop of constantly thinking about new analogy’s to compare retail to.