Kjlconsult's Blog

Nothing is straightforward…

kjlconsult — Wed, 02 Sep 2009 08:30:19 +0000

In my last missive I suggested that to get rid of dead stock all you had to do was identify slow moving items that returned a low profit and cull them from your inventory – if only life were that simple. I’ll give you a hypothetical scenario; supposing you were a jeweller who managed to obtain a number of Faberge eggs for £100,000 each. Due to the recession you know you can’t sell them for more than you bought them for and anyway, no one has that money to spend. The question is, what do you do? The answer – nothing. You have become known for having Faberge eggs on display, so people come into your store to look at the eggs and end up buying some jewellery anyway. You have now created a USP and become whats known as a destination store and your dead stock has become an asset.
What this illustrates is the need to know not only your stock but your customer also. Your customer may expect you to have a certain item in stock even if they only buy it once in a blue moon, it becomes something more than just stock, it becomes like a security blanket – ‘if X has Y in stock then all is well with the world’.

DO YOU KILL IT IF IT DOESN’T MOVE?

kjlconsult — Thu, 27 Aug 2009 09:43:24 +0000

Last month I suggested that you look to your stock and ask if it is there to bring in your customers, increase their spend once they’re in or is it purely filler – if the last then get rid of it, dead money is no good to anyone. So how do you know the difference between slow moving stock that brings in the customer and stock that is just filler? The short answer is analysis. The majority of till and POS systems now have the ability to assign a number of departments to them such that you can identify popular product types from your sales. By looking at your stock within each department it should be straightforward to identify the slow movers; once you have done that, look at the profit you make from each. If it moves slowly and gives very little profit then it is time to remove the product from the store. Even if your till system is not as advanced as that described, it is still possible to identify dead stock, just look at the last time you ordered a product, what your stock level is now and the difference between the purchase price and the selling price – if the numbers are low, question why you carry the stock.

Size really doesn’t matter!

kjlconsult — Wed, 26 Aug 2009 15:09:21 +0000

During this time of uncertainty there is ‘a new type of consumer who is characterised by concern about the future and lack of trust in many major institutions’ – so said Andy Bond, CEO of ASDA at the British Retail Consortium Annual Retail Lecture. This is an astonishing statement; he is effectively saying that his customers don’t trust his company. It should also be seen as a great encouragement to independent retailers. As long as you really know who your customers are and what drives them to your shop, then you are well on the way to weathering the economic storm we are currently in. However, he also said that ‘all businesses would have to concentrate on stripping out all unnecessary waste costs and delivering true value to their customers’. So how is this done? A good start would be to look at your stock and really question whether it is there to bring in your customers, increase their spend once they’re in or is it purely filler – if the last then get rid of it, dead money is no good to anyone.

Welcome to the new KJLconsult blog!

kjlconsult — Wed, 26 Aug 2009 14:54:29 +0000

Welcome to the new KJLconsult blog!

This is a blog where I will be posting occassional thoughts, snippets and pieces of advice that are pertinent to the independent retailer.