Saturday, 12 April 2008

Retail 101

I admit that I don’t care a jot for debits and credits. I also bear a great deal of ill will towards prescriptive Accounting Statements and I will own up to being a very mediocre accountant, at best. However, despite these feelings I find it impossible not to analyse business processes especially when they seem to be operating at sub-optimal levels.
(Retail managers will want to grab a pen and paper for this next part.)
The objective is sales. If your business is not making any sales it will go bust. If you have retail space you need to make sure that you have products on the shelves, preferably ones that a lot of people want to own.

To connect the dots: Customers can only buy products that you have to sell, if the shelves are bare you cannot make any sales and no money comes into the business. The consequences are inevitable.

I don’t think the basic theory is too difficult to grasp yet the empirical evidence suggests otherwise. I went into a large department store on the outskirts of Wellington. The store was part of a well-known chain aimed at middle class shoppers, the kind that normally have cosmetics counters near the front, brightly illuminated and with rows of neat little boxes stacked up behind testers. It was definitely the sort of place in which you would expect to be able to buy spot concealer. And in fact they did have the tester for it, but no neat little box I could take to the till.

The store shall remain nameless, since I don’t have enough money to defend a libel action. Also, if they want a trouble-shooting consultant, they can darn well pay me for my advice.

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