It seems like an obvious part of retailing – making sure you don’t run out of the things you sell so that your customers are happy and can get what they want when they visit your shop. But a news item on Marks and Spencer this week illustrated that even the big boys can get it wrong. Marc Bolland, the chief executive said some best-selling lines like blouses and tops, especially knitwear, sold out far quicker than expected, leaving the retailer “short of stock in best-selling lines”. What’s your approach to getting your availability right in your store? And have you ever been caught short by a freakish demand for a particular product?
I recently spent a day at a shop that I have been working with for a couple of years that increased its retail revenue about 50% last year and is on pace to repeat that feat this year. The shop has about 800 square foot of selling space and is not going to get any bigger. The two categories that are accounting for the majority of growth are men’s shirts and head-wear. It is easy to increase the exposure of head-wear, but not so easy to do the same with men's shirts.
In the case of our hypothetical shop we needed to do both and we accomplished this with 2-ways which increased our capacity to hang shirts by approximately the 100 units we needed and the extra turn we needed will be summer fill-in of off-price which will drive the margin as well as the volume.
One of the things I find myself saying often to shop managers and head pros that I work with is that “we don’t need to increase the capacity; we need to increase the turn”. Obviously the point here is the exposure is fine – it needs to be filled more often; you can’t sell from empty shelves and great display of the right capacity of goods is the formula for success.
Basics (solid shirts, rain-wear, peds, etc.) need to have par-levels that keep you in stock. The best way to establish these levels is to understand the fill-in time and add a week’s worth of sales to that. If for example you average sales on basic white logoed knits of 12 units per week and the vendor you buy them from says it will never take longer than two weeks to fulfill your re-order - your par level should be 24 units. If the basics are filled-in religiously once a week and the turn of fashion is planned well for so that the shop always looks like you want to do business you will have gone a long way to answering Tan Parsons’s question - What’s your approach to getting your availability right in your store?
