Arguably the fittest man in Australia, if not the world, is my son-in-law. He wakes daily at 0505 and trains from 0600 until 1030, rain, hail, or shine. He doesn’t smoke, drinks very little alcohol and eats a diet of organic stuff. Sugar is a no no. The model of fitness, you say, and he is very happy. But, surprisingly, he is sick quite often, usually with flu-like symptoms. One of my close friends, 20 years my son-in-law’s senior, is grossly overweight, smokes a lot and drinks like a fish.
Whenever he goes for a check up, the doctors cannot find any problems. Despite all logical reasoning, his heart is great, liver perfect and cholesterol couldn’t be better. He is happy and rarely is he sick.
Now, apply this to retail. Do you want to be a ‘fit’ retailer or a ‘fat’ retailer? There is no right or wrong answer, but most successful retailers seem to fall into the ‘fat’ category. They are not perfect. They take risks. They overbuy regularly. They slash prices when they are overbought. They take huge mark-ups whenever they can. When sales are sky high, so are markdowns.
Show me a fit retailer and I’ll show you a lean mean machine with excellent metrics, perfect KPI’s and often mediocre results. Show me a fat retailer and I’ll show you an exciting, risk taking merchant whose metrics are often out of line – but who mostly makes profits second to none.
Generalisations galore and subjective and opinionated, most certainly. But hopefully this paints a picture. Mr Parry was my menswear buyer. Every October we had a birthday promotion – which wasn’t a sale, but rather it was special offers, free gifts and so on.
We used to buy in stock for the event. Mr Parry always had a sensational birthday promotion. He brought in tens of thousands of dollars of men’s suits. He never placed an order for these, and when they arrived in receiving with no paper work, he would speak nicely to the receiving manager and promise to ‘fix it up later’.
The supplier provided the goods on sale or return on a trust basis. They knew Mr Parry well and he used to sell a lot and return very little. Of course, he eventually had to fess up and get an order signed, which, according to the ‘fit’ rules, was an impossibility because there was never any open to buy available.
When he told his merchandise manager that the goods were already sold, there was little option but to have the order signed off. Mr Parry was a fat, non-compliant, yet highly successful, retailer. I secretly wished I had a whole lot more like him, but I could not admit this to a soul. Most of the other buyers were ‘fit’. They obediently followed the rules and met their KPIs. But it was Mr Parry who got the biggest annual increase.
Stuart Bennie is a retail consultant at Impact Retailing and can be contacted at stuart@impactretailing.com.au.
