In the here and now
September 9, 2002,
In their zeal for hyper-efficiency, emaciated inventories and precisely calibrated markdown schedules, retailers increasingly seem to be putting the cart before the horse — perhaps to a dangerous extent.
Halloween at best is a two-week shopping event. What in the world was all this doing out on shelves two months before anybody was ready to start buying it? Honestly, it was exhausting just to cast my eyes upon it. Even worse, by the time Terre Haute moms are ready to shop Halloween, they will have been passing by the same old aisles of the same old merchandise they've seen since summer vacation time.
Reluctant consumers? Bored to tears may be more like it.
Which brings us to retailing's current calamity: the Back-to-School that wasn't.
Retailers had been warning since early August that the season had gotten off to a lackluster start. Last week's report on August sales provided a lot more of the "lack" than the "luster." The fact that department stores and mall-based apparel retailers took it on the chin came as no great surprise. The news that both Wal-Mart and Target posted results below Wall Street expectations was truly sobering.
As those results began rolling in late last week, I was reminded of a conversation I overheard in an Orange County, CA, department store in late July. The store's ground floor was festooned with banners proclaiming, "It's back to school time!" Walking just ahead of me was a mother with two grade-school-age children. One of the kids pointed to the banners and said, "Look, Mom. It's school time!"
Mom's reply: "We're not ready for school yet. Or I'm not, anyway."
As with the Halloween-in-August scenario, this begs the question: Whose priorities are being served here?
The August results suggest that consumers are purchasing on need. This doesn't mean a needs-oriented consumer can't be enticed into wanting items that aren't on her list. The most recent piece of evidence comes from Pier 1 — a retailer with no stake in the Back-to-School sweeps and one with a vital interest in driving traffic by offering fresh merchandise. Pier 1 had a splendid time of it in August, with comps up 8.6 percent and overall sales up 17.4 percent.
Consider this another reminder that most consumers are not thinking about beach towels in March, Halloween costumes in August or Christmas tree skirts in October.
Look, the operational fine-tuning that retailers have adopted over the past decade had produced some truly stunning results. But they seem to have reached the end of their tether.
Buying decisions need to revert more decisively to day-to-day merchandising that places more importance on what's just-in-time for the consumer than what's just-in-time for the P&L. Otherwise, some retailers could find themselves flogging a dead horse.
Related Content By Author
The Countdown to the ICON Honors Continues featuring Christophe Pourny