Sharing the Pie with Online Retailers

This Article was written by Ritchie Sayner, and is published in the May/June 2017 issue of Shoe Retailing Today. Click here to read the full article.

EXCERPT: “Though online purchases account for a growing percentage of retail sales, “about 80% of consumers still want to browse and shop in-store,” according to The Wall Street Journal (WSJ) in a piece datelined December 30, 2016.”

What does it mean to look outside your “Comfort Zone”?

I’ve come to believe that we are truly creatures of habit. Have you ever noticed if you attend regular meetings people will sit in the same chair even though there are no assigned seats. We generally take the same route to and from work daily. Most family meals consist of ten meals rotated over and over again. We buy the same gas, frequent the same stores, read the same papers, and listen to the same music over and over again.

I think this is true of most of us and that’s okay. In fact, our “routines” allow us to feel safe because we don’t need to venture far from our comfort zones. However, what works in our daily lives will often fail if we practice the same habits in retail. Retail demands experimentation, investigation, and reaching out to embrace the opportunities that exist outside our comfort zones.

The best advice for new ideas that we can come up with is simple. Be on the look-out for “Furbies.” Unless you were out of the country you know that Furbies were the wonder toy of 1990’s. Kids either loved or hated the little battery operated fuzzy gremlin look-a-like.   But even with this love/hate relationship the Furby was still the hit of the season.

Retail is not altogether different than the stock market. You are taking a risk every time you write an order.  Since you’re taking a risk, why not go after the next “Furby” of the season.  Think of that sought after item as an undervalued stock that has the potential to become the next, Furby.  Break out of your comfort zone.

Take a look at your company and ask does it look pretty much the same now as it did the same time last year? Are you presenting the same vendors from two or three years ago?  Are your sales tactics the same?  Are your windows reflecting changes? Are yours sales associates introducing your inventory in pretty much the same way?  Sameness in retail can be a very dangerous symptom. How many new lines are being introduced this season?  How many do you intend to present next season?  How many new shows have you attended? Do you intend to attend any next season?

Years ago a fine men’s shop client, introduced some of the finest tablecloths and napkins available anywhere in America, you may ask Tablecloths…in a men’s store?  Surely it didn’t fit the mold, but every piece sold, exclusive women’s stores presenting some great home furnishings or Golf shops selling cigars. It makes sense now, but who would have imagined it ten years ago?  I can picture fine apparel shops introducing fine wines, and specialty foods, because of the symbiotic relationship between the culinary arts and fashion apparel. Several successful apparel retailers are in the restaurant business as well.  I guess good taste bridges across several lines.

The fact is, the use of innovative tactics isn’t against the law of nature, nor should it be against the law of retail.  On the contrary, it should be against the law of retail not to try new and unusual tactics in your quest to grow your business.

Try stretching yourself to see beyond the same vendors with products that you invariably display in the same old ways.  I’m not suggesting you abandon what you stand for in the eyes of customer, but do try to incorporate new approaches that allow your clients to see your shop in a fresh new way.

The most pleasant surprise you can give your customers is the unexpected, the “Furby” you discovered, and the new item you looked high and low for. I would venture to say locating this item might be the most pleasurable aspect of buying and retail. Retailers are having a very difficult time looking different; they are struggling to find ways to differentiate themselves. It does take work but it’s worth the effort. One or two unusual items, inventory that says it has never been here before, can make all the difference in the world.  Well, maybe not the world, but it can make a difference in a season.

The statement: : “Timing is everything,” has never been so true as it is in retail.

The fall and holiday seasons are behind you. Many of you will be heading to various markets in the next several weeks to select what you believe to be the best merchandise for your company. Although selecting the right merchandise is very important, establishing ideal completion dates for the orders you write can be just as important.

Before making that journey to the markets, you need to know which vendors were profitable, along with what colors and sizes sold best during the season. No doubt, you know which lines were not profitable and which items didn’t sell. At first blush, the mistakes may seem apparent, but was the lackluster performance for these items really a result of the merchandise lacking appeal, or was it something else? In many cases I’d wager that it was the something else . . . and there’s a good chance that the something else, was timing of deliveries.

It may sound a bit crazy, but building your orders and planning delivery dates now, will be time well spent. It’s often believed that establishing ideal completion dates can be a long arduous process. But it doesn’t have to be. Often the real difficulty is knowing how to get started?

First, start by building a list ranking your most to least profitable vendors by classification. This exercise will be very telling and will help establish your mind set for shopping the markets. Do the same thing for sizes, colors, and if you’re up to it, price points. Take your open-to-buy and begin to divide it up; allocate it to the top five or seven vendors in each classification, being sure to leave uncommitted open-to-buy for reorders, fill-ins and new vendors. I recommend that you put this exercise to paper. Only after completing this exercise should you begin to tackle the timing issue.

Next, take a minute to consider some merchandising realities. Higher priced merchandise normally sells earlier in the season, and lower priced items generally sell later. Recognizing this fact will help you understand how completion dates need to be constructed.

Another important fact to consider—your customers like to see and your sales people like to sell fresh merchandise, which means you need a fresh flow of merchandise arriving throughout the season. Many retailers have a habit of front loading, or landing most of the merchandise early in the season. The store may look great early on, but it can look equally as bad as the season matures. Many vendors offer price advantages or extra dating if you permit them to land merchandise early. This approach often backfires because the merchandise is picked over before the season begins. Moreover, the sales associates are tired of the merchandise before the season arrives.
Just as landing merchandise too early can be dangerous, so is landing it too late. Landing merchandise too late could be inviting markdowns because there is too little time remaining in the season. I often use the example of landing Christmas trees on the 26th of December, no matter how nice they are, it’s just not good retail sense. Another problem that surfaces is landing components at different times; for example a coordinate top without the matching bottom. It’ s critical that vendors ship related items together or within days of one another for your ideas to be profitably executed.

The final key to scheduling ideal delivery dates lives in your open-to-buy. Your open-to-buy, provided by RMSA, will reflect planned receipts by month, over the course of the season. Once you receive your monthly open-to-buy, you can then create a percentage of planned receipts per month, instead of a lump sum amount. Your monthly open-to-buy will reflect current trends and consumer buying patterns as they unfold over the course of the season. An additional benefit is that your accounts payable will be easier to deal with, and your cash flow will better mirror your expenditures.

I’m sure you already have an idea of who you intend to buy from for the spring season. By following these simple steps you’ll have a clear picture of how receipts should flow. The closer you adhere to your outline the better your business will perform.

Don’t put off the task of building perfect delivery dates. As you know, timing is everything.

“Tis the Season for Giving the Gift of a…SMILE


December is a month of special holidays for most of us. It’s a time when retailers anticipate, and hope for the very best. Many expect the largest sales, the highest profits of any month of the year. You have worked very hard over the course of the season to prepare for this important month. But have you done everything that you can to ensure success? Here’s a very important gift that is often overlooked by owners; give your associates and your customers the gift of a smile and some enjoyment.

If we have lost anything in retail over the last twenty years it’s a smile and some fun during the holiday season. When I say fun I don’t mean a Christmas party or breakfast with your crew and I don’t mean Christmas music in the background. I mean impressing upon your associates the importance of making December a fun and joyful experience for your customers and associates alike.

That sounds like a tall order, knowing the number of hours your associates will have to work, but joy and fun can be had during the hustle and bustle of the holiday season. As the owner, the responsibility of ensuring fun during the gift-giving season lies with you. You set the stage for your employees to follow.

As retailers, you strive to offer customers something “different.” You provide a fun and compelling reason to shop at your store. Excellent service has often been the “difference” and is the hallmark of the specialty retailer industry.  That superior level of service stands out even more in today’s environment. If you are like most specialty retailers, you’ve come to know your customers by catering to their needs. You understand their desires, their tastes, and attend to these areas while being prompt, friendly and helpful. A clean tidy store stocked with your best selections is a key part of attending to your customers needs. A tidy store coupled with well-trained associates is the cornerstone to excellent service.  Why not strengthen your position in the minds of your customers and associates by adding one more cornerstone to your list of excellent customer service: happiness.

Put forth the effort to ensure that your associates are happy and not overly stressed.  In doing so, your associates will provide joy and excellent service to others.  See how often you can get your customers to show a smile and a little laughter during December.  Distinguish your store as the PLACE where customers shop not only for the quality of the merchandise, but for the quality of the people that make their shopping experience enjoyable.

Walt Disney coined the phrase “The Happiest Place on Earth.”  His goal was to make your experience at Disneyland like none you have ever known.  The employees (or “cast members” as they’re called) are enthusiastic about helping you and always wear a smile. Why not make your store the happiest place to shop?  There’s no month more important than December.

I’m smiling when I say this, “From everyone at RMSA, we wish you the happiest of holidays!”


As you know, the holidays are closing fast upon us once again, bringing with it the challenges of making it a successful one for retailers. We asked our RMSA Analysts to offer some holiday tips in order to make this busy time of year run a little smoother and improve the success of the season. The following are some great tips they provided:

  •  View Your Store From the Outside In. – Not Inside Looking Out. At least every other day, go outside and view your store as your customers see it.
  • Expand On Key Holiday Item Selling Displays. – Change displays in prime locations, changing once or twice a week.
  • Assure Customer Services are in Place. – Holiday wrap stations, review hold and layaway policies, security – anything to improve customer satisfaction and convenience.
  • Keep Aisles Accessible. – Allow for good traffic flow while keeping appealing seasonal merchandise in view and in reach.
  • Keep Sales and Wrap Desks Uncluttered. – When you are in the midst of the busy season, keep a neat and organized appearance.
  • Check and Recheck Supplies. – Have you anticipated your increased needs?
  • Set Goals For Sales Associates. – Create daily/weekly goals and incentives to help motivate the sales staff and improve your chances of a successful season.
  • Congratulate and Praise Your Staff. – Let employees know how valuable they are to the team. Remain positive, constructive and give suggestions for improvements as needed.

Trick or Treat?

October is here, will it be full of tricks or treats? October has always been thought of as an in between month for retailers. It’s too late to rely on back to school; it’s too early to expect Christmas business. October is, in fact, the heart of the fall season.

What does fall look like? We think of fall colors as oranges, yellows, burnt reds. Unless you’re buying against the current color pallets, those colors are probably not in your inventory. Then what should you do in October? Well, it’s a great practice month. It’s a wonderful staging month for the holiday season, and it’s a great time to fine-tune your business. The inventory is in, the stage is being set and it’s time to turn your thoughts to execution.

October can be a wonderful time to experiment with store trim. I’ve often thought Christmas has been overdone. You have the perfect occasion to use two other trim and promotion opportunities in advance of Christmas to show your wares. For those of you old enough to remember, Thanksgiving was a warm, exciting time of year in retail, before the Christmas season was extended by retailers from September through December 25. The season has been stretched out so long now, that customers are weary of the Christmas shopping season before it ever arrives. Try something different to peak customer interest.

Am I really proposing you trim your store in black and orange, or hang skeletons in your windows? Maybe. . .why not! Many households in America are buying and trimming their homes for Halloween—it’s a sure bet if they have children. Why not use the occasion to send a mailer asking your customers if they have any old costumes in their wardrobe that need replacing? A costume doesn’t need to be apparel. It could be old skis, golf clubs, home furnishings, jewelry that looks out of style. At the very least, you’ll get their attention If you have a comprehensive customer profile on each of your customers, you can do this very accurately. Do you have a detailed customer profile? If not, why? Recognizing that retail expansion in America is growing significantly faster than the buying population, how do you intend to gain a larger share of the pie? Large retailers are investing millions tracking customers buying patterns, all major food chains are fine-tuning customer profiling through buying clubs and coupon redemption. Specialty retailers must also invest in and develop strong links to their clients.

October is a great month to test your ability to serve your customers through the holiday period. Take this month to begin the process. Be sure you’re ready to communicate with your customers either through direct mailers, telephone calls, or better yet, a note from the sales staff. Customers can be very receptive to new ideas and fresh approaches. It’s no longer enough to just land new merchandise. It’s just as important to find a way to differentiate your retail establishment from others. Why not become the best at communication? Why not be known as the store with the most unusual or timely window trimming? Become special at something! October is a perfect time to try those new and unusual approaches to retail.

Maybe October will become the most important retail month of the year. It can be if you provide the thought and effort it requires. Get tricky. . .make it a treat!



WOW, it seems like we just finished with last Holiday season, and now it’s that time again!  Many retailers are well into the implementation of their plans for this important time of the year.  With the-Back-to-School rush over, you will see Holiday merchandise and décor beginning to appear in many department and specialty stores.  It goes without saying that the last quarter of the year is critical for many retailers.  Most will generate a significant percentage of sales and profits in the last two months.  So, my question to all of you is: where are you in the pre-planning for the Holidays?  Do you have a plan, and if not, should you still put a plan together?

To assist you, we have put together a checklist of things to remember to do in preparation for the busy Holiday season.  First, have your re-reviewed your cash goals for the season as measured against current sales trends, current inventory and on order and projected operating expenses?  Will you be on track to hit your goal?  If not, you should adjust now while there is still time.

Secondly, consider the following suggestions with the thought that everything mentioned can impact your cash and taking steps now will ensure that your goals are achieved or exceeded.  If establishing cash goals presents a challenge for you, contact your RMSA merchandising analyst for assistance.

  • Review your on order, by month and by classification – are you still confident in your original assortment plans or should you be adjusting to the current trends?
  • Have you followed your OTB faithfully? What are the risks and opportunities?
  • Do you have a plan in the event that sales exceed or missed projections? For example: promotions, sales incentives to associates, etc.?
  • How will you monitor sales performance frequently during the season so that you can adjust quickly to trends, good or bad?
  • Review merchandise receiving carefully for errors – too much, too little, short shipped key merchandise, etc.
  • Have you allowed for an easy transition for the customer from the sales floor to check out?
  • Have you scheduled Holiday events and activities such as fashion shows, trunk shows, vendor promotions and introductions, etc?
  • Have you prepared a floor plan for how and when you will present your Holiday merchandise to your customers?
  • How have you planned to merchandise your store taking advantage of key Holiday classifications?
  • Have you placed orders for extra supplies such as boxes, bags, tissue, tape, etc?
  • Have you anticipated and prepared for the potential for inventory shrinkage and taken appropriate action?

With the uncertain economy, many of your customers may be unwilling to spend as much this Holiday.  This presents both challenges and opportunities for you as a retailer.  You will need to be more creative in your product mix, visual merchandising, advertising efforts, and customer service.  You will also need to be more focused in your inventory assortment and item selection.  The more you know and listen to your customers, the greater advantage you’ll have in attracting them and keeping them in your store.

The Lifecycle of Merchandise

This Article was written by Ritchie Sayner, and is published in the Sept/Oct 2016 issue of Shoe Retailing Today. Click here to read the full article.

EXCERPT: “A cadence is a natural rhythm or flow of something. A markdown cadence ensures that all remaining inventory is sold through as profitably as possible while making room for the arrival of new merchandise. .”

Are You a Retail Detective?

In retail the biggest crime is to be unprofitable. Good detectives look for the smallest clues to determine the cause of a crime because the more obvious clues are sometimes misleading.

Most retailers think the biggest clue to being unprofitable is not generating enough volume. However, low volume is not always the key culprit in being unprofitable, but it tends to be one of the biggest and more obvious clues. People are drawn toward the obvious, but like most solutions the answers often lie in the details.

Clues that detail a problem often live at very low levels. We have all heard the phrase “the devil’s in the detail.” It can be applied in retail. The levels we are referring to are at the SKU (Stock Keeping Unit) level. SKU’s often contain the following: vendor, sizes, color, price points, styles, and season.

In order to be a competent detective you must investigate each of these areas, as they will provide you with insight about your customer. The more you investigate, the more you will understand what makes your store tick.

Let’s discuss each of these areas starting with vendors.

  • Vendors – Every season, or at the very least, every year, you should build a profit and loss statement for each vendor. It needs to be factual, not emotional.  Which vendors contribute to your success?  Which contribute to you losses?
  • Build your P & L for each vendor by classification instead of at the total store level or even at the department level.
  • Sizes – Investigate sizes carefully. Retailers often buy the same size scales year in and year out.  It’s also not uncommon to discover that these same retailers are marking down the same sizes at the end of every season.  It may not be the obvious sizes such as all the smaller or larger sizes.  It could be the mediums.  The study should be much like the vendor study.  You should monitor sales, receipts, markdowns, etc.
  • Color preferences – This task is easier in some businesses than others. In women’s apparel, one season’s color statement will be very different than the next season or even the same season next year.
  • Price points – It is very common for retailers to miss the mark here. The best indication will also be your clearance periods.  If you’re always marking down the very upper or lower levels, you are reaching too far in either direction.  Try to remember that the better merchandise or higher priced merchandise will sell earlier in the season.  The lower the price point, the later in the season it will sell.
  • Styles – They indicate what your customers want. In apparel, styles can change every season.  One study of styles can be tied back to vendors and sizes.  Some vendors may cut the merchandise fuller or trimmer than others.  You may want to be sure your sales people are aware of this situation and guide the customer to styles that are likely to fit that customer best.
  • Season – This information is far more important than most people realize.  How an item sold in the season it was intended to sell through is critical.  Many systems ignore seasons altogether.  Many retailers think if it’s a basic, season is of little importance.  Even if there is no specific season tied to the item, the intent was to sell it within a specific period of time.  Rarely do retailers buy something and think it will sell…eventually.  Retailers should expect merchandise to sell within a specified time frame in order to keep cash flow on track.
  • Receiving – This is very notable. If an item is received on time and experiences slow sales, action should be taken.  Don’t wait for weather changes, it rarely increases sell through.  If it’s bad, it’s bad, and the sooner you recognize it, the better.  On the flip side, if it’ s a winner, then it means you need to spot it early and try to reorder it as soon as possible.  Runners drive fashion.  Runners are tied to seasons.  Be sure your SKU system recognizes seasons, which are defined by time (i.e., Fall 2016).


A good retail detective will always solve the crime.  If you get to know all the details, investigate carefully, and piece all of the information together, you will sleuth your way into retail profitability.  Always remember the answers to the crime lie in the details.

Manage the Details, and the Profits Take Care of Themselves

RMSA would like to share a “Case Studies” that was published by IndiCo on 6/16/2016 at 11:11:00am.


Not too many people were surprised that Rita Phillips, Director of the Iowa State University Bookstore, won ICBA’s MVP for Overall Outstanding Performance in 2015 – for the second time in five years.
“If you know Rita at all, you know she’s a perfectionist,” says Ken Bankson, vice president of business development for RMSA Retail Solutions. “She wants to be able to control whatever is controllable in her store.”
Phillips wouldn’t necessarily disagree with that assessment, either. When she was offered the promotion to the director position in 2007, she came prepared with a full set of objectives for the store, along with a plan of action to take her there.
The first order of business for Phillips was to get help controlling her buying and inventory. “I told them the only way I’d take the job was if I could get RMSA to help “right-size” our inventory,” she recalls.
She knew instinctively that inventory was high in many areas, and that the store’s buying practices required a new process and strategy. “For example, I had been telling the general books buyer for years that she needed to reduce her stock by $80,000,” Phillips recalls. “Once we brought RMSA in and were able to look at the reports, the overstock was closer to $180,000.”
Bankson agrees that there were some issues to address in terms of inventory levels. “When we first came in, I think they had enough hooded sweatshirts to last them a year,” Bankson says. “We initially helped them get a handle on the size of their inventory, and also to identify the categories where they were making money and losing money.”
Right-sizing the inventory, generating monthly reports and, most importantly, getting buyers to change their purchasing habits were the major obstacles she faced in improving the store’s financial performance. “Getting the buying staff to understand cash flow was a big issue,” she notes. “My philosophy is that they need to pretend that’s it’s their own checkbook when they’re spending the store’s money.”

Reducing inventory to the optimal size took a while and included implementing a new markdown strategy that depleted obsolete stock while still maintaining some margin.
Monthly meetings between RMSA and the buying staff are critical to the store’s ongoing success. Phillips, the Retail Manager, Course Material Manager, Marketing Manager and IT/Web Assistant Manager are all involved with the monthly calls — along with all of the buyers — during which they review all the sales, turns, and GMROI to identify categories at risk and those with opportunities to surpass goals. This gives the team a chance to adjust promotional strategies as needed for surplus or slow-moving items.
“It’s important for the entire management team to be part of the going process so the buyers “buy-in” to it and they better understand the importance,” Phillips explains.
A monthly call earlier this year alerted the team to the fact that most of their shipments had been ordered to arrive in May, and they’d likely run short of some key categories in April. “We needed to call vendors right away and get some product ordered right away,” she says.
“It’s all about looking ahead and planning; the sooner we know it, the sooner we can react to it,” Bankson adds.
Over the years, Phillips has adjusted store merchandise, margins, buying practices, and staff to achieve industry-leading financial performance, and sometimes tough decisions have to be made. “When I took over as Director we had to adjust our staff size, from 37 full-time employees to 25 now,” she says. But it’s an eye on such details that have kept costs so low; she points out that expenses have increased just one half of a percent in the last five years.
But managing and controlling inventory has been the key to allowing the store to achieve and maintain its exceptional performance on an ongoing basis. Duplication of product can be a huge stumbling block, particularly for a store planning a renovation and allocating future space.
“I warn people all the time that if they’re going to renovate, right-size your inventory first,” she says. “You won’t need as much space as you think you need!”
The other part of the equation, she says, is mutual respect among team members, hard work, and a lot of fun. “Our team does have a great deal of respect for each other and, I must say, they all work hard,” she notes. “We all must do the heavy lifting at times and if management is doing that alongside our team, there tends to be more respect, which is why we are all part of the RMSA meetings. And yes, we have fun, celebrate success, and work even harder when things are not quite going the way we had hoped.”