June 22, 2015

I'm A Marketer - I Have No Control Over Merchandise

How do I combat mega-trends by improving my merchandising assortment? I'm just a marketer / analyst / social media manager. I don't have any say over what the merchandising team does.

WRONG!

I can still recall one of the most fascinating meetings of my career. It's back in 1993. That's a long time ago. I'm just a lowly statistical analyst at Lands' End, and for some God-forsaken reason I was invited to attend a meeting of Directors and Vice Presidents - a meeting where a recent catalog was going to be analyzed.

Aside - the best companies find ways to expose lowly analyst-level employees to Executives in an educational setting. Lands' End was one of those companies - they (not necessarily consciously) believed in employee development.

Anyway, I walk into the room ... Merchandising Executives and Inventory Executives and Creative Directors and the CEO and my department head, the Director of Circulation, are in attendance. On the wall I see boards ... each board represents a spread in the catalog ( a spread is, say, pages 8-9 in the catalog). Each board is one of four colors.
  • Gold
  • Green
  • Blue
  • Red
The colors map to variable profit (contribution) levels, pre-fixed costs.
  • Gold = 30% or better variable profit, as a percentage of net sales.
  • Green = 20% - 29% variable profit, as a percentage of net sales.
  • Blue = 10% - 19% variable profit, as a percentage of net sales.
  • Red = < 10% variable profit, as a percentage of net sales.
As I sit down, I think something to myself that I haven't thought often when attending meetings.
  • "Oh oh, there's going to be a discussion about true business accountability, and I'm actually sitting in the meeting. Stunning."
The meeting begins. You'd think a Merchandising Executive would start talking, but no, my department head, the Circulation Director, she starts biting her co-workers in the ankles.
  • "Why do we have four consecutive red-colored spreads on pages 8 - 15? Aren't the first twenty pages the most important?"
  • "Why are we still running an item with a 40% return rate? That item alone reduced the profitability of that spread from Gold to Blue".
  • "How can we possibly be sold-out of an item on page five? If we had enough merch in stock, the whole spread would have been Gold. We can pin that one squarely on the inventory management team."
  • "Why do we continue to put that item on a model? We already know that when that item is featured in a stack, it performs 30% better. Why do we sabotage ourselves like this?"
  • "Don't we already know that we shouldn't feature risky, new, unproductive items in a prospect catalog that has low productivity?"
Within minutes, the room was in full backpedal mode ... everybody was on their heels.

Oh, sure, some in the audience fought back.
  • "Oh yeah? Can you prove you mailed the right people? Because if you mailed the wrong people, then every other thing we're looking at here today is irrelevant."
Seconds later, the discussion circled back to accountability.

I learned more in that two-hour meeting than I learned in five years working at Eddie Bauer.

I learned "how the business worked".

I learned "what increased sales and what increased profit".

I learned inter-Executive dynamics.

I learned what future analyses needed to be created to answer questions that came out of our interdisciplinary discussion.

I learned that marketing, yes, MARKETING, can drive merchandising strategy. I learned that it is critically important for MARKETING to have a voice.

If you want to combat merchandising mega-trends (ever-lowering merchandise productivity), then change your current merchandise/creative evaluation meeting structure, or get yourself invited (invite yourself if necessary) to these meetings, and bring a new perspective to the meeting ... a perspective of accountability.

The Marketing Director who spent hours biting the ankles of everybody in the room went on to have a satisfying and successful career, ultimately selling a business she built from scratch to a catalog holding company, for millions.

Nobody showed her HOW to do something. She just did what she felt was right ... she held merchants and creative folks and inventory staffers accountable for merchandise productivity, generating outstanding results in the process, clearly angering her co-workers along the way.

You, too, can do this. You don't need special skills. You do need conviction, however. And you can do it without irritating people - you can do this and be kind and caring in the process. It's your choice.

But you do need to have a good working relationship with your in-house co-workers. You can't do that if you spend all your time trying to force an omnichannel listcicle upon your company in an effort to please your industry marketing tribe.