As we run our shops day to day, the issue of stock is ever important. Even though as a wholesale silver jewellery supplier our products run into the thousands, we can hardly expect our customers to have all the models in stock. The question of what is the right level of stock becomes key. Also, silver jewellery by definition tarnishes and that is another factor why the right level of stock should be considered.
As a rule of thumb we advise our customers that stock should be proportional to the size of business and should take into consideration how often they order. If they contact us every two months and their annual turnover is say £1000, there is no reason why stock should be bigger than £166. Of course the seasonal variation should be taken into account and at a high seasonal period it should be perhaps twice as high but not much more.
The right level of stock will let you see what products are selling and have sufficient variety to keep the collection always fresh. The problem comes when this time you buy from this supplier and next time from another and then another. Continuity suffers and by default stock levels do too.
How often have we been in a situation where we are facing a customer whose business is performing less than acceptably and, because there has to be some blood on the carpet, he “blames” you - the supplier. There are a number of variables on which the business performs - or not - and often the easy route is to blame the supplier. The problem could lie in the creation of footfall or it could be that the display of the products is unacceptable or simply that the choices of product that he has made is not right.
The only thing that one can do in those circumstances is to let the storm ride and smile in the process. As frustrating as it is no argument will suffice and there is nothing one can do to revert the trend in the business and more specifically one’s products. So the best thing is to walk away.
What some customers do is to recognise this and not place the onus solely on the supplier. Instead the person recognises that it is only one of the variables and analyses each of them instead. It is only when this is done that an objective analysis is carried out and one gets nearer the truth………..
If you read certain parts of the media it will tell you that retail sales are up, that inflation targets are being met and that overall growth in the economy is coming back. So, you might be excused for thinking that we are out of the woods and in the clear? Yet, I hear you say that it doesn’t feel like it and we still have to endure some more…….
As we turn and tussle debating what we are doing wrong and what we are doing right we need to realise that a number of elements are at play. The first is that we are all fish in a pond of economic turmoil and that we are particularly vulnerable to our markets – whatever they are. The second is that within our sectors, we might be more or less exposed to the web which is having a major impact. The third is that our personal performance might influence our performance.
So before you blame your suppliers or yourself you must realise that you are only a cog in the wheel………
If only I would receive a penny for the times I have heard ‘I like it because it is a little bit different’. There is no doubt that independent retailers are under enormous pressure from a number of different fronts and there is a relentless quest to be distinctive and different in order to attract customers and sales. However, what if we argued that being different for the sake of being different actually increases the risk of doing business?
Let’s assume an experienced retailer who knows his customers well is constantly changing his stock in order to achieve that ever sought objective of being different. One could argue that seeking that objective per se runs the risk of potentially changing the character, feel, look, appeal or product portfolio to the point of alienating regular customers. The customers could lose the sense of what ‘the shop is all about’. We all visit shops with a pre-determined idea of what it is we are likely to find in it. If we constantly change without a strategic core to what we do, we can suddenly find ourselves in a different ‘planet’ without knowing it.
Normally the large and most professional organisations test all changes or new product entries in order to avoid mistakes. As it is the rule of thumb is that only 2 or 3 new products in10 are successful and the others are failures. Clearly, independent retailers do not have the luxury of testing, measuring and reviewing results. However, we would advocate that the pursuit of changing for changing sake is significantly more risky than sticking to one route and then optimising it to its best or until it is decidedly inappropriate.
There is no doubt Retailers face significant challenges these days. Visiting many of them across the country one hears their concerns, which are certainly diverse. When one analyses how these Retailers encounter their challenges it seemsthere is a dividing line between two camps: those shops forging forward and those that are not. So, what makes the ones going forward successful?
- Location – Yes, this is one of the ‘oldies’ in retailing and it continues to be true. Location equates to footfall and those outlets in the ‘right’ location will live through a downturn whereas those in secondary or tertiary locations will sorely feel the lower footfall
- Added Services – Offering the right products at the right price is no longer good enough. If I got one penny for the times I have heard the phrase ‘we look for something that is different’ I’d be a millionaire. The fact is there is ‘nothing new under the sun’. Unless we talk about Technology, the Gift and Jewellery industries are saturated with products which cover every single angle of the market and rather than something new it should be a new way of marketing their current products. Many of the successful retailers have been offering a service related to the products they sell as a way of differentiating themselves, and they are banking on that.
- Product Cohesion – Ideally there should be a ‘theme’ running across the retail outlet and the products should ‘build’ on this theme. To make the point it is rare to see a successful independent retailer that sells jewellery alongside kitchen utensils. For customers it is much easier to focus on a shop if subliminally know what the shop sells. This also applies to price points. There is a misguided belief that one must have ‘something for everyone’. We have not seen much evidence this route leads to success.
There are a number of other ‘learnings’ which may prove of use and we will be publishing them in this Blog overtime……keep tuned in.