Specialty Retail Blog

By Evan Wise

This one word is at the heart of every retail business. Motivating your employees to sell a little more and motivating your buyers to search out deals and exciting new merchandise can make all the difference. Motivating prospects to come into the store to see what you offer is at the heart of marketing; motivating existing customers to come back to in to shop is crucial to retail success. Motivation is at the heart of every successful retail store.

Motivation is not a switch that is either on or off. It spans an entire spectrum from “I don’t care!” to “What else can we be doing?”. The tough part is that different people are motivated in different ways and finding that trigger is the key. That is a constant battle! There is not room here to discuss all the things that can motivate customers, staff, vendors and owners, but by discussing some, I hope you will get some ideas of motivators you have not tried in the past that may work in your future.

Let’s get MONEY out of the way early. Too many retailers look at money as the only qualified motivator. They give bonuses, raises and spiffs to sales staff without measuring the return in increased sales that the motivator actualizes. When that does not work as well as hoped, they then run promotions, sales and discounts, using money as a motivator in the direction of the custo- mers. Certainly money can motivate but for how many people and for how long? Without measurement, you really can not know. Every retailer has used money as a motivator to a some extent.

The next great motivator is RECOGNITION. People love recognition, respect and admiration. The utilitarian philosophy says people will do what brings them the most pleasure – and status and respect feel good! It starts by knowing your customers’ names, important dates and their personal history. Spending time researching what your best customers are doing on the internet can help you recognize their interests and accomplishments. Even telling other customers about the recognition will often get back to them by word of mouth.

Employees seek recognition as well. Sure, they want that bonus but they also want everyone else to know they got it. Public recognition is more important than the bonus. The bonus merely tells them that you are sincere about the recognition. As long as you are sincere, you cannot overdo public recognition of positive actions, results and effort.

People want to feel like they belong. They like being a part of a COMMUNITY of people who like, understand and appreciate them for who they are and what they think. Political parties, churches, synagogues, mosques, gangs and work groups are all examples of com- munities that motivate people to come back. The more your staff members feel and work like a community, the more motivated they will be to adopt your goals and expectations and to work together to make them happen. Making them part of decisions is a part of building the community.

When people feel like they have more STATUS because they shopped at your store, they are likely to come back. Status comes from listening and caring about your customers. When they are important to you as people and not just customers, they have risen in status. When you ask your customers for opinions, when you use their ideas and when you give them the credit, they rise in status. Status feels good. The more status you create, the more sales will be created.

Employees also love status. They want you to be open to their input and love when you use their ideas. People want to feel important so anything you can do for the right reasons to make them feel that way will motivate them to do more.

There are many other motivators but very few that motivate everyone. The more you listen and find out about a person, the more you will be able to figure out what is his/her motivator. Make the call to action clear and the motivation effective and the results will speak for themselves!

“Ability is what you are capable of doing.
Motivation determines what you do.
Attitude determines how well you do it.”
~ Lou Holtz

By Evan Wise

Most stores have customers who shop for the newest items and the latest fashion. The store buyer, in selecting the merchandise, needs to keep not only that in mind, but also must be attentive to achieving targeted margin and GMROI goals. Accomplishing that requires a strategy and discipline to be effective.

At the beginning of the season, the buyer must start with an Open To Buy budget to use as a guide for purchases. The budget can be stretched by holding some back to buy off price items as well as potential re-orders, during the season. That is where strategy enters. Planning how much to withhold at the beginning of the season can be a critical decision for the success of the entire season. Adjustments during the season are important but require a view of cash flow and OTB in making those changes. Often the strategy leads to effective negotiations at markets and during initial buys to assure the ability to get the best goods off price during the season.

Buying off price in season is challenging as well. Price should not be the only attraction. An off price buy that cuts into the store’s ability to sell its regular price merchandise can be counter- productive. The buyer should analyze if the merchandise fits the customers’ tastes and the store’s assortment plan. The buyer should determine if the purchase is something that would have been made at full price at the beginning of the season. Just because the price is low does not mean it is a good buy. It needs to sell. An added benefit to the purchase would be if the item drives sales of the other regularly priced merchandise. A good question to also ask is “Can the goods be brought into the store at the full price before issuing the markdowns?”

A further question is what do I do as the season progresses? Have my sell-throughs been weaker than expected and do I already own my own markdowns? Will an off price buy help my margins offset an erosion in my margins or be a potential drain on cash flow? Should I take the hit on my own goods and move on to the next season?

An additional strategy is to blend both regular goods and to sprinkle buys in from the Management One® Buying Service (MBS –exclusive to M1 clients) or to buy more opportunistically as you develop your assortment strategies.

There are a lot of variables to consider as you look to build your merchandise plan for the season.

Everything in retail becomes more complicated and interconnected as you continue to grow your business. The more guidelines that can be established, the easier and more profitable the journey becomes!

Ken Seawell’s (Detroit, MI) client, Mike Phillips, was named first of the 20 top producing iPROMOTEu affiliates out of 800 vying for the recognition. Phillips is the owner of Alternatives in Advertising located in Michigan.

In a retail world where things happen quickly, sending data and getting plans need to be fast, accurate and easy! Management One® has been web and internet enabled longer than any other merchandise planning organization for independent retailers.

It is with much sadness that we say good-bye to our affiliate Ed Cloeter (Michigan). Ed loved consulting and his clients loved him. His sharp wit and salty sense of humor endeared him to those who were lucky to have known him. He will be sorely missed.

On Tuesday, April 22, Evan Wise will make a presentation to over 100 vendors and retailers in the skate industry. The presentation is part of the IASC meeting in Orange CA at the Doubletree.  The presentation is about merchandising and innovation. Innovation is an important skill for any industry, vendor or retailer to increase market share, loyalty and viability for the long term.  Merchandising, the planning needed to have the right merchandise in the right amount at the right time in the right place at the right price , is critical to success.  Bringing innovation and merchandising together will be the challenge of the day.

Celebrate! This year marks the tenth anniversary since our web enabled merchandise planning process has been available to independent retailers. This is a huge advantage since the flow of information from the retailer and to the retailer happens at light speed. In a retail world where things happen quickly, sending data and getting plans needs to be fast, accurate and easy!! We have been web and internet enabled longer than any other merchandise planning organization for independent retailers. We are proud to be at the cutting edge of retail planning. We are now working on GEN 2 to provide more benefits to our retail clients.

Evan Wise
Managing Director

At Management One® we are, and have been, in a growth mode. That means that we are challenged to find new affiliates in many areas. The process consists of doing everything possible to find people with a familiarity with retail business and a desire to establish and develop a career in retail consulting.

Seems like the opportunity to develop your own business at virtually no cost would be attractive. The fact that our affiliates can easily have 10 to 30 clients means that job security is not an issue. The flexibility to arrange your schedule within the limits of your client’s needs can be attractive. Working most of the clients in the first 3 weeks of the month means that once a client base is established, it can be maintained by referrals and an affiliate can take a week off for vacation every month if desired.

Working with Management One means that an affiliate gets continuous training to constantly improve skills and knowledge. A flow of marketing ideas and events concepts are available every week to bring new fresh ideas to clients. Trends and hot lines are shared monthly. Management One not only provides the training one needs to be a great consultant, a mentor is assigned to be sure the new affiliate is successful through the entire time they are with Management One.

The frustration of unemployment comes in finding enough retailers that want to expand to help other retailers succeed. One would think that with 9% unemployment, there are a pool of talented people with retail experience that are interested in establishing a whole new career. Too many of the unemployed seem to feel they will wait for things to get back the way they were. The sad fact is for most, it never will.

We are looking for people that are excited about finding a new career. Call us if you know any.

By Evan Wise

I was reading an article on soft power (by Joseph Nye Jr, former dean of the Harvard Kennedy School) as it applies to foreign affairs and I found it very interesting and applicable to our business environment. Power is defined as the ability to influence the outcome to be what you desire. The article compared the effectiveness of using hard power (military force and economic enticements) and soft power (the ability to use strategy, leadership and vision) to achieve the goals of our country.

Soft power appeals to the intangible assets of culture, values and policies that are seen as legitimate and having moral authority to get people to desire the outcome. These tend to be more important in achieving objectives than using force in the way of military or economic sanctions or inducements to require the outcome. Soft power is taking advantage of the information revolution happening around the world. Even thought the article was written in 2004, we are seeing Facebook and the internet applying power in the middle east in countries like Egypt, Tunisia, Libya etc. Knowledge and information are power and communication is the tool that applies that power toward a desired outcome.

There is a lot more to the article but you get the gist. Our military efforts have been costly and marginally effective while our use of soft power has also been marginally effective at a lower cost. So why bring this up here, in a retail blog?

As I read the article I thought about Management One. Rather than run our business on the basis of hard power where affiliates are employees and wages, promotions and directives are the hard power that is used to get the ends the company desires, we rely on soft power. Every affiliate is independent and is linked by strategy, values and culture. Information is the power that binds the team. It has worked as the best method to achieve results for Management One and our clients for the past 21 years.

But there is an insight for retailers too. Too often they use hard power to achieve ends with customer s and employees. Discounts, sales, and economic enticements are the application of retail hard power. Relationship development is the application of soft power to build your business. Just like our diplomatic efforts, the results can be as good but at a lower cost. Choosing the right merchandise and providing the right shopping environment is also soft retail power to get customers to desire to come in and buy.

Nye has a quote that defines why so many retailers turn to Management One affiliates for help. He addresses the abundance of information available to retailers to make decisions. There is too much information available. He says, “When people are overwhelmed with the volume of information confronting them, it is hard to know what to focus on. Attention rather than information becomes the scarce resource, and those who can distinguish valuable information from background clutter gain power.“ That is part of the power a Management One affiliate brings.

I hope this alternative view of retail in terms of international diplomacy helps you think about your business in a different way. The better you are at using soft power effectively with customers and employees, the more real and lasting your results will be.