Merchant Chaos

Look, it isn't easy to be a merchant. You're always wrong. Business success ultimately rests on your shoulders. Sure, the trade journalists and vendors claim that "SEAMLESS PAYMENTS" are the key to Q4 success. They are wrong. Horribly wrong. Businesses that sell stuff that customers want know the key to success.

However ... merchants don't have to behave in a chaotic manner.

I see merchant chaos all the time in my Comp Segment analytics.

I look at new merchandise comps and existing merchandise comps.

The two tables are filled with chaos. New Merchandise ... look at October / November / December ... big comp segment gains in new merchandise, followed by five consecutive months of new merchandise declines. Somebody made big bets for "Holiday" and then had a poor plan for Spring. Chaos.

Existing Merchandise ... we see seven consecutive months of losses, five of the months feature double-digit declines. That's a problem! And then we see two straight months of huge gains, on top of acceptable performance the year prior. Chaos!

I'll take the data a step further ... analyzing comps for items selling at/above their historical average price point and for items selling below their historical average price point (i.e. discounting).

Why did existing merchandise comps perform well? Because of discounts/promotions ... April / May comps on discounted items was +21% and +33%. More chaos! Try planning the following April / May off of chaotic tactics.

You can see the signs of a sick business here.

• Full Priced Comps in the Past Year = -8%.
• Discounted Comps in the Past Year = +17%.
• Total Merch Comps in the Past Year = -1%.
• New/Reactivated Comps in the Past Year = +4%.

This business is sick. Unhealthy. Management is papering over the challenges by discounting. The Smart Marketer is trying to protect the future by adding new/reactivated buyers.

Do you have comparable analytics to what I've illustrated here? Are you actively tracking what is happening at the brand you work for? As you've learned this week, this stuff is really important, isn't it?