Don�t Celebrate Birthdays! � especially when they occur every 10 weeks

By John Stanley

I recently spent a day with Edwin Booth, the Director of one of the most successful retail businesses in the United Kingdom.  Booths� Supermarkets are situated in the north west of the U.K. and continually get awards as one of the top retailers in Britain. During the conversation he mentioned one thing that was a real gem.

�Retailing is about selling, if you are not selling, you are not a retailer�.

Wow. Okay, it may sound common sense and obvious, but it is rare sense to many businesses.

The key is to ban birthdays in your business.  In my view, a birthday is celebrated by products when they have been on the shelf too long; they have exceeded their sell by date.

It is all about Stock Turn

Edwin�s comment is that retailing is all about stock turn and a
successful business needs a planned and active stock turn policy.

Stock turn starts with the buyer.  The role of the buyer is to decide
what to buy, how many to buy, what the retail price should be, what the
stock turn will be and to communicate this information to the
merchandiser.

I�m a strong believer that any product on the shelf (either indoors or
outdoors) should be on the shelf for a maximum of ten weeks.  This
gives you a stock turn of five times a year, which should ensure that
you maintain a fresh image.

In saying this, I appreciate that there are two overriding factors we
need to take into consideration.  A garden centre situated in, for
example, San Diego, will have a completely different trading pattern,
due to climate, than one situated, for example, in Anchorage, where it
will need to close down in the winter months.

The second overriding factor is some suppliers may have a strategy of
encouraging the retailer to warehouse product rather than themselves.
These suppliers will offer bulk discounts to reduce their warehousing
costs.

There is nothing wrong with this as long as you warehouse the product
and do not put it in the retail area and tie up space that could make
you money.

Ten Week Thinking

Encourage all your retail team to be ten-week thinkers.  I recently
worked with a garden centre that kept trees in the retail zone for
between 12 and 18 months.  As a retailer this should be unacceptable.
I have garden centre clients who retail trees on a ten-week cycle in
their garden centre.

I must also stress that ten weeks is the outer limit.  We all have
products that will turn over during a weekend and spring retailing for
many businesses is simply about filling the shelf and letting products
fly.

Birthday Planning

Selling is about planning and monitoring products.  The most important
week in a product lifecycle is week one. In that week you can monitor
progress.

For example, if the buyer purchases 100 container plants and recommends
they sell for $20 over a 10 week period, the merchandiser then knows
that he or she has to sell ten a week to achieve the target.  They will
have to override this with the seasonal buying pattern, but an astute
merchandiser will know by the end of week one how the product is
performing.

If it is not performing according to the plan they know they will have to change something.

During the first half of the product�s life cycle, the last thing to be
changed is the price. Change the position in the garden centre, the
style of the display, the signage or advice offered to consumers before
reducing price.  Too often the answer is reduce price.  This gut
reaction often occurs because the product has not been monitored early
in its life cycle.

Yes, Play the Price Game

I�m not against playing with the price, but I would not do that until
at least half way through the product lifecycle.  Then the first thing
I would consider is putting the price up.  Is this an emotional buy?
If the answer is yes, then consider whether you are selling it too
cheaply.

The wine, perfume, whisky and other luxury industries have shown you
can increase prices to sell more.  This is not the case with all garden
products, but it does apply to some indoor and outdoor living plant
arrangements and sculptures; it�s at least worth a try.

If this does not work then try selling three for the price of two.  If
this does not work, then it may be time to start reducing your gross
margin to move the product.

By week nine I would be selling the product at cost, the space is too valuable to have it tied up with products that don�t sell.

Does it Work?

Jeff Morey and myself were recently at Mid Ulster Garden Centre in
Northern Ireland when Jim Bradley said to Jeff that one of the winning
formulae we had introduced into Mid Ulster was the birthday policy.

Ask Jeff what he thought.  It works for Mid Ulster and Jeff believes it�s the best garden centre in the world.

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