Specialty Retail Blog

 A great article about the strong performance of Urban Outfitters

Hiring and placing people in the right positions is one of the important keys to success in any business. The hiring process we implement as part of the Winning@Business® process is designed to put the right people in the right place at the right time.
Sounds good but what the heck does that mean?

Too often, without a well fashioned hiring strategy, plan and implementation process you end up with the wrong person.  That wrong person not only costs you in lost time and money but the lost profits and customers due to substandard work can be devastating as well as irrecoverable.  The short tenure of the wrong person puts you right back where you started. Why does that happen way too often?

The reason is that most businesses hire for experience and fire for fit. In other terms, the resume, prior experience and presentation of the individual are the keys to the hiring decision.  That will assure that you have a person that is best at getting the job but not necessarily one who is best at DOING the job.
Basically every job requires both traits and skills to accomplish it. Most employers tend to hire based on skills which is a great idea of you are looking for a life and death occupation like a brain surgeon. One reason that a brain surgeon can be hired based on skill is that the long and rigorous path to become a brain surgeon has vetted the traits required long ago.

To promote a better hiring process and hire for fit, focus on traits.  Traits are natural abilities and likes. This is personality and talent. Traits are the precise reason that even with all the coaching, training and practice I could benefit from, I will never be a player in the NBA.  That would be sending a duck to eagle training camp.  That is one aspect of what I mean by fit.

The second aspect of  job fit involves the others on the team. The hiring process should be a combination of identifying the skills and traits of the individuals and matching that to the needs of the organization. When the team members mesh well and can work together, the employees are happier, more motivated and the workplace is a wonderful place to be!

Obviously there are many other important aspects to hiring the right person. Understanding the critical parts of the process and designing the procedures that are required for the situation you face will lead to a long and profitable relationship. Hiring the first person that responds to an ad or your merchandise manager’s cousin’s wife may not be a good choice at all.  Don’t hire a duck if the job requires soaring like an eagle. The cost and effort to do it right the first time is minimal compared the cost of making a mistake.

When you started in business everything was new and exciting. Problems were challenges to be overcome.  Everything worked just fine on paper. Everything worked just fine on paper. 80 hour weeks were necessary but fun. You called the shots and managed every crisis that came along.  Then the business grew and customers multiplied. So did the challenges.

You soon found that planning was not the only key to success. Business is not always fair so regardless of the fact you worked the hardest and had your money invested, it was you who went without a paycheck when there was no money. You found that as owner, sweeping the floor and emptying wastebaskets was not beneath your status or dignity.  Now that you have some experience, the challenges have turned to battles to be won. Big ones and little ones, easy ones and tough ones, everyone wants something.

In order to get some insight into how to win these battles, there is no better group to model in battle than the U.S. Marine Corps. They are arguably the premier fighting force in the world. They train constantly for the day when they are thrust into battle. What have they learned about winning the battles from which you can benefit in your daily business battles?  Here are a few of the most valuable lessons.

The foremost lesson is to identify your target and develop a plan and strategy. That allows you to get all of your assets in place before you start firing randomly. A plan lets you assess the skills needed through training, reorganization or hiring staff or a consultant or expert. The marines know the objective in clear terms before they hit the ground. Marines know they are there to take a hill, capture a city or squelch an uprising. You should know your target too!

Another lesson is to decentralize. The marines realized that targets must be set and plans established but the field officers need the flexibility to make decisions that achieve those targets.  Officers measure effectiveness and results.  They don’t try to manage from the top.  By the time a tank commander can gather situation data, send it to headquarters for analysis and a decision, receive the orders back and then take action, the opportunity to win the battle is lost. There is too much that happens spontaneously to manage from the top. The same situation exists in most businesses. There is so much happening with customers, inventory, equipment etc that employees need to know the target but be free to make the best decisions on the spot in order to with the battle.  Even a small business needs to decentralize!

Thirdly, you don’t win the battle without acting. Don’t let paralysis by analysis keep you from developing action plans and taking action to implement them.  Often timing is more critical than planning.  Staying focused on what you want to accomplish lets you decide which battles, opportunities and options can move you in the right direction.

Next, use experts and intelligence to gather the best direction and information available. The marines consult with locals and military experts. They use consultants to help them draw from a broad perspective of ideas. You must make the final decision about your business but don’t ignore the wealth of options and intelligence that can help you make the right decision. Two lessons here,

1.      Don’t be too proud to seek outside advice

2.      Get the information and advice to the whole organization

Know the exit strategy before you go into battle. The marines identify exit routes and extraction procedures before they enter a situation.  Search and rescue is as much a part of battle as attack plans. When you evaluate an option, evaluate what happens if the unexpected happens. Know the way out. Know the downside as well as the upside.

Finally, focus on critical not urgent items. An outside consultant, board of directors or knowledgeable mentor can keep your efforts directed toward winning the war, not just firing your weapons! We us a process called Winning@Business™  to help owners win the business battles.   Winning the war and winning in business have many parallels.  In the end, however, you can bounce back from a failed business.  Too often a failed battle does not give one that option.

The new picture of business, at least for the next year or so, seems to be one of closings, cutbacks and trimming. The obvious approach would be to cut back like everyone else but there may be a better way. For many years we have been faced with a scarce labor market. In fact, one lament I hear all the time is, “It is hard to get good people!” That time is past! Good people are being let go and put on the street in droves.

One result from years of a tight labor market is what the army terms ROAD Warriors. These are Retired On Active Duty Warriors, people in your organization who act like they are doing the job but in reality lack the drive, commitment, ingenuity and desire to always find new and better ways to serve your customers.

This new economy presents the opportunity to root out and replace ROAD Warriors with people who are committed, motivated, inspired and willing to work with everyone on your team. The challenge is how to go about the hiring and replacement process. Replacing people can be a waste of time, money and be very disruptive if you get rid of the wrong people or don’t hire better ones!

First, a management process is critical to identify those who are not committed to your success. The staff knows who these ROAD Warriors are but they are often hidden from the management. Establishing teams and implementing Winning@Business™ is a great way to identify these people.

Hiring better people requires a process to identify those who can truly do the job, not just the person who is best at getting the job. A Management One® affiliate can work with business owners to look in the right places, ask the right questions and put candidates through the right process to hire the best.

Hiring is never complete until the orientation process and job training is complete. Teamwork, communication and the creation of an environment that is exciting will help you succeed in the next year. It’s up to you!

The Business of People
By Evan Wise

Howard Behar, executive of Starbucks, says, “We are not in the coffee business serving people, but rather in the people business serving coffee!” This is a lesson for every small business owner, especially retailers. You too are in the people business.

Behar doesn’t say they are in the customer business but rather the people business. That is because success revolves around many more people than just customers. In order to deliver dresses, shoes or suits, many people are involved. Those people must be dedicated, trained, motivated and empowered to do their job effectively so the customer can be not only satisfied, but delighted! That includes sales, marketing, buyers and others within the organization.

Take at look at where most of your business efforts and focus fall. Is it on buying inventory or effective merchandising? Do you spend a lot of time on marketing? How much time is spent on finances and looking at cash flow? Are you selling on the floor, opening and closing the store and working on receiving goods? Compare the time spent on all those activities to the time you spend on training, communicating and growing your employees. Employees are your most important asset. Employees make your store unique compared to the competition. Too often I hear retailers lament that the internet is cutting into their sales. That means the staff is not specialized enough to compete effectively. If you, as the owner or key manager in the business, are not spending at least half your time and a good part of your budget on improving and nurturing employees rather than nursing them, competitors and the internet can pose a threat.

Winning@Business™ is about growing people in order to grow your business. Dedicated employees create loyal customers. When your staff is trained to think like an owner; when they own their job instead of renting it from nine to five; they will be more productive and effective at creating buzz (word of mouth) and keeping customers coming back for more.

A management process that is coordinated and implemented properly can change a culture and a business. There are reasons that some businesses do well while others fizzle. Often it can be traced back to people and how well they work together to accomplish goals that are meaningful to the success and longevity of the business.
Email to a Friend

During it’s centennial year, Dick Hite of Norton Ditto decided to share one of the key aspects of his success. Since 1908 Norton Ditto has been the premier fashion retailer in Houston Texas. From the early days when the store’s typical customer arrived at the downtown store in a horse and buggy to the Texas oil boom of the eighties, Norton Ditto continued to grow. They opened a second store on Post Oak Blvd in the prestigious Galleria area, Houston’s shopping Mecca. Even with the growth in sales, like so many traditional retailers, Norton Ditto struggled to remain profitable and experienced some tough times. Mr. Dick Hite, the nephew of Ben and Sarah Ditto learned the retail business while working in the store from 1969 – 1984. In 1994 when he returned to the store, he became the principle owner and CEO, and took on the challenge to restore Norton Ditto to profitability and success to become today’s quintessential Men’s Clothier in Houston. Mr. Hite shares with us some important lessons that have contributed to Norton Ditto’s success.

Though well experienced in the retail industry as well as his experience in sales and marketing (he was a frequent speaker for the PGA), Mr. Hite looked outside his already strong staff for additional assistance to develop a management plan. One of the most important relationships he developed was with Management One®, one of today’s best retail management consulting groups, to develop a rapid ROI (Return On Investment) strategy to maximize the two largest assets of Norton Ditto: their people and inventory. Mr. Hite admits that while he and his staff had previously used management and merchandising plans from other consultants, the key to their success was “that Management One® not only provided better plans, but they were also able to motivate us to follow the plan. ”

It is no news that retailing is a cash flow business that must maximize sales and turn rates. By increasing turn rates, a retailer will improve cash flow, reduce markdowns, increase margins, and indirectly increase sales. Management One’s focus is unique in that it’s not solely directed toward tightening the belt (Open to Buy) to maximize turn rates. The focus is also on helping the retailer develop opportunities to expand the business by re-investing dollars that were previously overcommitted in non-performing classes into new lines and classifications with growth opportunities. Breaking out classifications so that growth can be tracked more effectively results in inventory dollars spent with a much better return.

As examples, Mr. Hite points to his neckwear and belt classifications that were performing poorly and are now very profitable classes with neckwear selling through at 85% (and trust this author who has been in his store - he still has a fabulous selection of ties!) Yet he acknowledges that sometimes the raw numbers don’t tell the whole story. He admits that if he looked at the numbers only he wouldn’t be carrying Oxxford suits, but he knows his market: one can’t be the premier haberdasher of Houston and not carry Oxxford suits. “It’s all about the right balance of merchandise,” explains Mr. Hite.

Marc Weiss, one of the principles of Management One®, calls Norton Ditto a “text book example” of what good controls and discipline can do for a retailer. Evan Wise, the other principle of Management One®, emphasizes that a key turning point is when a retailer deals with issues they can influence rather than making excuses due to circumstances beyond the retailer’s control. Inventory planning, balance and the right OTB at market is one area that every retailer must control. Mr. Hite applauds the responsiveness of Ed Scott, his Management One® consultant: “It’s much more than a monthly review of our merchandising plans; it’s the daily support that makes their service so valuable. Moreover, Management One® is in tune with and truly understands the retail business.”

In 2007 Smyth Retail became part of the Norton Ditto partnership by providing the underlying information system which effectively manages daily transactions and provides important reporting and analysis tools, including a direct interface to the Management One® “Winning @Retail” merchandising planning system. The entire Smyth organization was so committed to helping their POS customers get the most from the data their system collects, they provided the direct interface to Management One at no added charge to customers. That interface makes it easy for Norton Ditto to send the information to Management One quickly, accurately and easily over the Internet. Management One processes the information and the report can be returned over the Internet as well. This seamless and efficient process provides Norton Ditto with timely and accurate analysis of their business. Mr. Hite affirms there is “no doubt that the timeliness and accuracy of better reporting tools provide the information to quantify and qualify management’s decisions. ” The ability to get a snapshot of the status at any time during the month using Management One’s Plan-On-Demand (POD) feature is important to helping us reach the planned goals established for the month.”

Mr. Hite sums it up best: “There is no doubt that through effective planning and execution that we have increased turn rates, margins and sales.”

Last month I wrote about the changing terrain of marketing success. I introduced the need to build a community around your company based on values in addition to demographics. Management One® developed the Winning@Marketing™ process to achieve that transition. Many readers felt that more explanation would be helpful.

Brands and your marketing are about establishing an image. People long ago started moving away from the old “neighborhood”. They had a need to meld into new communities and environments. Just as the internet changed how we do so many things, it is changing the socialization process too. Today many do much of their socializing online to find their niche and to socialize. Others struggle to find their niche, their identity and the image they want to portray.

What is the image of people who shop in your store? Who in your market “wants to be like them”? Do others want to be associated with them? Obviously very few owners can afford Tiger Woods or Cameron Diaz as a spokesperson for their stores to establish that image. Lots of people want to be in their circle! Other ways must be found to identify and establish the image of someone who shops with you. That is where the internet can be a terrific and potent tool.

What are the images people have of using your product? When you sell something and the customer uses it or puts it on, how does he/she feel? How is he/she supposed to feel? Does that feeling provide an attachment to your store or a community? Some stores have an image of exclusivity and of being expensive. Certain customers may have values where expensive and exclusive items and activities are important. To others, those things may be ostentatious and wasteful. Communities grow up around shared values!

A good marketing strategy that includes e-mail, the internet and well-crafted direct marketing establishes the right image with which your community will identify. That image prepares them for the right feeling when they get the goods home. It catches their interest and motivates them to shop with you.

Sometimes events or values establish a community. Dick Hite, owner of Norton Ditto, an upscale men’s store in Houston , Texas is busy raising money for a local charity. At the store the trunk shows and events are all focused on raising money for that charity. His store, which is reflected in his own values, and the community surrounding it are growing together nicely.

A retail community around your store is about mutual cognitive perceptions. Plant the right seeds and the community will grow. Your marketing needs more than fertilizer (investment) to help the growth! A solid marketing strategy to use that investment wisely is the right move and Winning@Marketing is designed to provide that direction.

Email to a Friend

In Europe, affiliate Thierry Bayle (London) is shining as a featured speaker at the prestigious European Summer Fair. An article in “Drapers, Fashion News,Jobs, Trends” states, “…Speakers include Thierry Bayle from Management One®,who will talk about the ‘Art and Science of Buying,’ alongside Julie Warkenth from WGSN.” To register for the event visit www.summerfair.com.

The Role of the GMM

The General Merchandising Manager in a retail store plays a critical role to the key to success. The GMM must coordinate the strategy, marketing and sales for the season with the buyers in order to give the store a direction that will attract customers and build a solid reputation. It is also important that the GMM is able to communicate that information to the Management One® Winning@Retail™ affiliate.

When preparing merchandising plans for a client, we use a high tech/high touch aspect includes input and feedback from the buyers and the GMM at the store.The more the planners understand the direction the store is taking, the closer the plan will be to what is needed to make the strategy into reality!

“Nothing is more dangerous than an idea when
it’s the only one you have.”
- Philosopher Emile Chartier