Article

Taking a CSI approach to retail

Bob Gordman walks through a post-mortem on the recent retail season, spelling out who the victims were.

January 12, 2011

While walking through one of America's most successful malls and a number of big box retailers this week, it occurred to me that there are significant parallels with one of the country's most successful TV series, "CSI (Crime Scene Investigations)." Each show opens with a crime being committed and the subsequent scientific analysis of the corpse and other evidence.
 
So here are the parallels:
 
The Crime: Missed sales opportunities during the most important season of the year.
The Evidence: Racks and fixtures loaded with clearance merchandise or bare without a transfusion of transitional merchandise.

Now for the findings from the autopsy:
 
Finding One: There are no symptoms of a plague. The disease is localized to specific retailers, while others are healthy. The economic and weather reports are false negatives.
 
Finding Two: Near and/or farsightedness. Each quarter the customer looks different. No consistency in the vision of the taste level of the customer. She's younger, she's older, she's fashion, she's basic.
Infected retailers: Gap, Ann Taylor, Talbot's and Chico's
 
Finding Three: Some anemia is present. One of the great old retail truths is you can't do business from an empty cart. The customer demands selection. While there is no question that cash flow is king, out of stock positions send your customers to your competitors. The challenge is to find a balance.
Infected retailer: Target
 
Finding Four: Ignoring obvious symptoms. After the greatest selling season of the year, some stores are sitting with substantial quantities of merchandise that was received in September, October and November still at full price. If it didn't sell before December 24th, it is unlikely it will sell now. In Washington they call this kicking the can down the road.
Infected retailers: Macy's, Penney's, Dillard's

Finding Five: Healthy patient with localized infection. A number of very strong retailers have some serious weak spots that season after season negatively affect their results. The same areas are strengths for other retailers and therefore are not scientific mysteries. The symptoms persist due to a lack of aggressive treatment.
Infected retailer: Walmart (apparel)
 
It's very clear from the results of the past 120 days that most consumers are in the market and buying again. As has always been the case, retail success is based on a clear vision of each retailer's customers and those customer's rules. Ignore the rules and you risk being a CSI case study.

Robert Gordman is President of The Gordman Group, and the author of "Do You Know What You Don't Know?" and "The Must-Have Customer: 7 Steps to Winning the Customer You Haven't Got." As a consultant for 20 years, Bob has helped executives think creatively to develop well-thought-out, executable strategic plans for their companies. (Photo by Yumi Kimura.)