Most of what I do running my business can be divided into head and heart activities, including managing inventory. I mention inventory because I'm thinking about my GAMA Trade Show presentation in March and it basically comes down to these two factors.
Head is running numbers, turn rate analysis, sales per square foot analysis and the like. If this hammer is the only tool in your toolbox, you can optimize your store out of existence. You can't run a store in your head, and if you could there would be one chain of stores in existence, all of commerce reduced to a mathematical formula. That's because there's heart.
When I say heart, it's not quite accurate, but it sounds good. Heart is really human psychology. Understanding human psychology is the second half of inventory management. And when I say "understanding," I mean vaguely having a feel. Your store has a perception in the mind of customers. That perception can be only vaguely influenced by marketing, because the heart can't be fooled that easily.
When a customer visits your store, their heart, their psychological view of your business, is imprinted upon them. Small things, like whether their butt was brushed in the aisles by a passing customer or whether the aroma was pleasing, can have a massive effect on their perception. Your store could be too small, so you make it bigger, but then it becomes too big and they wish it were smaller. It's so difficult that Americans don't even appreciate the winners of this game. They like underdogs and you are seriously screwed if you're perceived as being the bully, so everyone looks for someone they can punch at upwards. I can badmouth Amazon all day long, but I risk everything if I talk smack about that small shop across town.
When it comes to the heart and managing inventory, we work with concepts like "top of mind," as in when people think of their game, what business is at the top? This top of mind often has little to do with the head job of running numbers. For example, we have the product pyramid, in which 20% of dice make up 80% of sales, but if you drop the bottom 80%, sales plummet to insignificant numbers. You've lost top of mind. So you carry all the dice. But there is no product pyramid in board games or card sleeves, mostly, sometimes, often. I mean is there? Obtaining "top of mind" is not something you can quantify, so your mind topping may vary. You'll have to adjust constantly, and there is your job security.
So which product lines are about top of mind and which are about running the numbers? There is no right answer and I could come up with a philosophy in my store that doesn't work with another store I own across town. My guess is a master retailer sees with both their head and their heart all the time. They see through the eyes of the customer and grock what's important and what's not, what numbers can be crunched and when to let out slack for the sake of perception, an attempt to speak to the heart.
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