November 02, 2011

The Life Spiral: Merchandise Productivity

The most successful businesses I work with make merchandise productivity their number one initiative.


You'll know that marketing has bought in to merchandise productivity by their actions.

  1. Does your Chief Marketing Officer babble endlessly about his love of merchandise on Twitter?
  2. Does your E-Mail marketing team use your subject lines to promote promotions, or to promote merchandise?
  3. Does your Analytics Expert spend a disproportionate amount of time moonlighting on projects to support the Merchandising Team?
  4. Company chatter shifts from sales events to new product arrivals.
Successful businesses possess merchants who crave knowledge of how their products perform.

  1. They demand reporting that illustrates item profitability by search term.
  2. They demand reporting that illustrates sales volume within email campaigns, especially by customer segment within the campaign.
  3. They need to understand how much of annual sales volume, by item, is not driven by marketing efforts ... in other words, they want to know how much of annual item sales is generated only because the customer craves the products sold by the merchant.
These days, we read all about the "data driven culture".  That's not a bad thing.  But I'd rather be associated with a "merchant driven culture".


Businesses ascending the "Life Spiral" fuse merchandise reporting and customer reporting.  Vendors would say that this is all about "breaking down silos", but that's not the case.  Instead, it's an output of a culture where marketing and merchandising are uniquely focused on measuring merchandise productivity.  These businesses endlessly care about identifying ways to encourage each and every item to generate more sales.


Businesses ascending the "Life Spiral" evaluate item profitability, without prejudice.  Merchandising, Marketing, Inventory, Operations, E-Comnmerce, Finance, Human Resources ... all departments meet monthly, thoroughly evaluating the performance of every item sold.  Everybody talks about everything.  These aren't meetings where everybody produces canned reports and offers canned speeches.  Instead, these are genuine meetings where the employees are passionate about merchandise.


When a business ascends the "Life Spiral", all employees become passionate about merchandise productivity ... all employees cannot help but exude love for the products sold by the business.