Life of an Item

In case you are wondering why I'm talking about items / merchandise more often, this is a process that happens every 3-5 years. Business doesn't go the way we want it to, we focus on merchandise for awhile (which often fixes the problem), then we get away from merch and focus on marketing channels until marketing channels don't work great (usually caused by merchandise problems) ... and we repeat the cycle.

We're always repeating the cycle.

Sometimes our merchandise assortment gets stale. It happens to every company. It's during the "stale periods" when we dig a bit deeper.

Let's pretend you measure how much items sell by year ... let's pretend you've analyzed the dynamic for items you've offered for at least four years. You see the following.

• Intro Stub Year = $50,000 per item.
• First Full Year = $75,000.
• Second Full Year = $38,000.
• Third Full Year = $19,000.
• Fourth Full Year = $9,500.

The item essentially generates $191,000 over the stub year and first four years. You don't have unlimited warehousing space, so when an item dips below, say, $15,000, you discontinue the item and find something new. This means the life of the item is the stub year plus three full years.

Once you have a framework, you can identify the items in your assortment that are at the end of their life. You can communicate with your merchants that your customers need newness.

This is the point in the discussion where somebody will raise their hand and offer me advice:

• "I work in marketing, and I shouldn't have to deal with merchandise performance, that's why we have merchants. I should be allowed to focus on marketing."

Oh my little grasshopper.

Have you ever noticed that when business is off by 5% the Finance Team and the Merchant Team start asking questions about marketing? I notice it. It happens. All the time. It's happened for the thirty-six years I've been in this business. Marketers are constantly being fired for merchandising sins.

Checks and balances are important. You do not want to be held accountable because your merchandising partners held on to old products too long. Measure the life of an item, and focus on communication when you notice that products are aging, potentially harming customer response.