Comments on: Retailers: “You’ll See Fewer Products On Our Shelves.”

By: Ted Mininni

Ted Mininni — Thu, 05 Nov 2009 11:58:46 +0000

Hi Barbara,
You’ve offered some well-founded points and I thank you. The example you illustrate goes to customer service more than anything, doesn’t it? When you say that the stores you shop in no longer carry a preferred dental floss and that trying to special order it is a fruitless exercise, it points to a bigger problem. The total lack of communication and service of the customer is one of the biggest reasons many retailers’ demise. This is a huge problem, often discussed and seldom rectified. As you point out, Barbara, it becomes easier to shop online; many consumers are doing just that as a result of their frustration. Let’s face it: few of us have the time to run around endlessly looking for the products we want to purchase. Savvy retailers will either offer their customers suitable, comparable alternatives or tell them where they can find their preferred choice. Many large chains also offer consumers a way to purchase online, so why not let consumers special order on their web sites if they don’t carry the items in the stores? All very good points.
Retailing, when well executed, is a relationship building business based on service. Since that is sorely lacking today, many consumers are walking away from many retail operations completely. That’s one reason online shopping has taken off. We all vote with our wallets, don’t we?
Thanks, Barbara, for weighing in with so many terrific comments.

By: Ted Mininni

Ted Mininni — Thu, 05 Nov 2009 11:49:25 +0000

Hi Elaine,
Here’s the danger of cutting inventory levels too much: retailers can routinely suffer out of stocks on popular items and lose significant sales. Or they can cut a few SKUs that experience slow sales that a handful of customers feel passionately about. Sometimes it’s hard to win in this scenario. Given the sluggish sales they’re experiencing, hard decisions have to be made by retailers right now. As Paul pointed out, for those decisions to be effective, retailers had better dig deep when they analyze the performance of their product mix before making any significant cuts. Otherwise, they may force customers like you to do most of your shopping with a competitor.
Thanks, Elaine, for making an important point. Much appreciated.

By: Barbara Phillips Long

Barbara Phillips Long — Thu, 05 Nov 2009 01:46:51 +0000

Products I like regularly disappear from store shelves without explanation. Attempts to special order those products seem to be fruitless, and often the sku seems to have disappeared on a regional level rather than just from the store in my area — store staff members shrug and say the warehouse doesn’t have the item.
This is frustrating. I went to five different stores this week to find the kind of dental floss I use.
For customers who are particular and have reason to be particular (with allergies that limit product choice, for instance), all shopping may end up eventually on Amazon because local stores will only carry the most popular items, not items a handful of local customers depend on.
I also worry that some retailers will decide to dump products that bring in older customers in an effort to cultivate a younger clientele with more shopping years ahead. (This would be a parallel to advertisers who don’t want to advertise on TV shows that appeal to people over age 50, for instance.)
Want to win me over? Warn me when you’re going to drop an item, tell me where to call to find out who’s selling it locally, and provide a place to order the product online if I can’t get to an alternate local retailer.

By: Elaine Fogel

Elaine Fogel — Thu, 05 Nov 2009 00:55:51 +0000

Hi, Ted. For the past year, I’ve noticed a reduction in product variety at some of my favorite stores (not including the grocery category). I realize that the economy has had a profound effect on inventory investment. It just means that I’ve had to go to more places to find what I need.

By: Ted Mininni

Ted Mininni — Tue, 03 Nov 2009 17:02:39 +0000

Quite right, Paul. However, most retailers of size maintain very sophisticated reporting systems and their data will tell them plenty. No, it doesn’t make sense to stop selling key items, whether they stand strongly on their own or influence the sales of other products. But in many cases, their are redundancies of products within category brands. In that case, a weaker item might be culled from the assortment, further strengthening an already better seller. Hard decisions will have to be made in light of sluggish sales. The cost of goods is too high to justify over assortments. Now more than ever.
Thanks for weighing in, Paul. Your insights are valued.

By: Paul Barsch

Paul Barsch — Tue, 03 Nov 2009 16:29:27 +0000

Ted, to effectively pull off category optimization, retailers will need to deeply mine their data to understand not only sales, and item profitability, but also relationships between items. It makes no sense to stop selling a key item based on lack of sales, when that very item influences other profitable sales. So many considerations…