December 17, 2023

Just Like Sports

The parallels between sports and merchandising ... they are many, and the lessons apply to our world.

Orvis is an example of a "draft and develop" philosophy. Product development is critically important - without the ability to develop your own winners, you're sunk.

If you are Nordstrom, you are largely dependent upon Free Agency. There are items and brands that you can pick from. You pay a price, of course ... in football, your salary cap limits what you can do. In retail/e-commerce, profit limits what you can do. Here, Nordstrom partners with L.L. Bean. L.L. Bean takes on the product development role, and if the merchants at Nordstrom are smart, they are picking good "free agent" items.

Neither approach is right/wrong ... both approaches have benefits and consequences.

When Orvis fails, it might take 2-3 years to recover. It's like being the Green Bay Packers ... if you don't draft well, look out. Regardless, Orvis largely controls its own destiny.

When Nordstrom fails, recovery could be fast if third-party vendors have alternatives that work. Still, Nordstrom is dependent upon third-parties. If customers don't like the Coach Tabby Pebbled Leather Crossbody Bag, Nordstrom suffers. It's not unlike being the NY Jets ... putting all your chips in the Aaron Rodgers camp.

Marketing/messaging is different in each case. Orvis develops products for the customer. Nordstrom selects products for the customer.

Know who you are, know your strengths and weaknesses, and act accordingly. Just like sports teams do.

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