December 15, 2014

2014 Year In Review: Merchandise Executives Being Fired

Here's a question I received earlier this year.

Question: My company performed a Merchandise Forensics evaluation of our business. We learned that customer productivity is not improving. Our CEO fired many members of our merchandising team as a result. Is it really the fault of the merchandising team when the business struggles, or is the marketing team failing to do their job? In other words, shouldn't the marketing team find customers who want to buy the merchandise we offer, at the price we offer it at?

In 83% of the Merchandise Forensics projects I've conducted, there are serious flaws in merchandising strategy. Expansion of unproductive categories. Failure to launch enough new products. Discontinuation of winning items. Serious discounting resulting in a reduction in gross margin dollars. All of these things impact customer productivity. When the merchandising division negatively impacts customer productivity, changes need to happen. I'm not saying folks deserve to be fired. I am just saying that changes need to happen.

The marketing / merchandising challenge is real, and it is spectacular.

In the past two years, there have been two trends that frustrate me.
  1. A growing lack of merchandising discipline.
  2. Marketers seeking to impress outside audiences instead of co-workers.
The latter is frustrating because it is the job of the marketer to sell merchandise, not to impress researchers, trade journalists, vendors, and consultants with mobile strategies and omnichannel tactics. The former is frustrating because the metrics are there to show that we're making myriad merchandising mistakes, but we instead choose to trust our own instincts.

In 2015, we need marketers and merchandisers, working hand-in-hand, improving customer productivity. Neither side is right, neither side is wrong. We simply need both acting in a collaborative, disciplined manner, working for each other.