(P)Review

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Now that we’ve settled down to a panic since my last blog topic, we can start to consider what needs to happen before the end of this financial year.

Review is a good place to start – an assessment of past performance to gain insights and learnings. What I’ve observed is how many businesses do this step, tick the box and leave it there, without actively translating it into a Preview – an extrapolation of those insights, combined with direction, interpreted into a strategy.

 
 

The importance of a clearly defined strategy is not news, and there’s no shortage of models and education on the subject, including the time honoured “begin with the end in mind” from Stephen Covey.  

The concept I want to emphasise here is the causality …

“The Merchandise Budget is a financial expression of the business strategy; 

the Merchandise Plan is a dynamic version of the Merchandise Budget”

They start out the same, and the plan is updated regularly with course corrections to maximise opportunities and mitigate risks based on new information as the business trades.

It is the roadmap by which we navigate our way back to achieving the Budget, or better.  

Therefore, if the original strategy is absent or lacking, the foundations of the entire Planning framework from Budget through to Merchandise Plan could be unstable.  For all the learnings that may have been gleaned in a post seasonal review, the business will still not be set up for success.  

The very deliberate link from Review into Preview is vital

Here are some perspectives and ponderings for tackling the Review-Preview stages.

I often imagine the review through the lens of twisting a Rubik’s Cube. There’s a big box of data that’s available, and you manipulate it over and over again, considering it from multiple different angles, in varying combinations and see what you find.  There’s an element that’s predictable, because there are standard things that should be reviewed; and there’s an element of discovery, because it’s only once you see the data arranged that way, that the learning emerges and takes you deeper down a line of exploration and enquiry.  It’s often here that the ah-ha moments reside. There’s merit in being clear on what you’re looking for, and not going down too many rabbit holes.  There’s also a risk in doing the activity on auto pilot and missing the signs. The skill lies in finding the balance between trend vs detail, and identifying what’s truly relevant at each of these levels.

Throughout the review, root cause thinking is a critical success factor

This is where the quantitative data is elevated to the qualitative realm.  The genuine understanding of where you won and lost, supported by how and why, is what unlocks the transition into strategy, enabling you to own the learning, consider what you would do differently, and apply it forward.

I suggest being deliberate about …

  • Going beyond just WHAT you observe, and determining WHY it occurred.  

  • Being wholistic with your measures, considering Sales, Margin and Stock, and how they interrelate.  

  • Maintaining perspective around growth areas, while protecting your hard earned base.

  • Working collaboratively (Planning, Buying, Marketing, Production, Operations, Supply Chain) to find the story in the numbers, 

Of course, it’s good practice to bank as you go.  Form a habit of conducting Review-Previews promptly at the close of each relevant time period, while things are still fresh in your mind.  Build this into Department calendars for all functional teams.  This will help to:

  • spread the workload into more manageable bites 

  • preserve relevant IP as teams change over time, and 

  • facilitate root cause thinking, before the details inevitably fade into just numbers on a page

If “why” is the hashtag of Review thinking, then “how” is the hashtag of Preview thinking.

The below example gets its own pride of place. I’ve found it to be a common occurrence, and unfortunately a common pitfall.

A review reveals performance below target margins, with higher than planned markdowns.  So a decision is made to reduce markdowns next season.

On the surface, this makes sense;  we know that less markdowns are linked to higher profits.  But it’s not a straight forward cause and effect relationship, and the weakness is revealed in asking “how?”.  

How will the business go about reducing markdowns?

Through a change in product?  Through range rationalisation? Through a shift in price architecture?  Through buying less?  Through enhanced allocation and stock consolidation?

There is a myriad of ways to reduce markdowns.  To achieve the desired end, the business must first correctly identify that high markdowns were the problem (wholistic review), understand WHY this was the case (collaborative, cross functional root cause analysis), and put in place a clear strategy as to HOW this will be addressed going forward (preview with perspective).  Anything less is unlikely to produce the intended outcome.

If you aren’t already playing in this space, I encourage you to amp up your traditional post seasonal review, append a preview, and watch how this starts to knit together your pre-season and in-season efforts.

Make FY20 your year of Plenty

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FY20 Started 3 months ago!

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I hope this title freaked you out just a little bit;  gave you a fleeting sensation of “Sunday night feeling”.

Why?  Because I want you to win in FY20.  Perhaps enjoy a level of success you have not achieved before.  And that type of success requires action … now.  

Those who have worked with me in the past will know that I am a big believer in starting the Merchandise Planning budget process well in advance.  November is my preferred kick off, with ongoing review from there. 

Most often, however, I see businesses leaving their run too late, and a soul destroying cycle eventuates…

In the short term, familiar justifications perpetuate dealing with the urgent over the important

  • first comes all-consuming December trade,

  • then focus on end of season Sale,

  • then the flurry of new season launch. 

Before we blink Winter is over, it’s June Sale and the new financial year is here!

But instead of bursting across the line with focus, clarity and control, many businesses limp into the new year battered and bruised.  Stock positions are too unhealthy to profitably support the first few months’ sales, and there’s already an overstock looming in Q2. 

The new year has barely begun and the ominous question (that no one dares say out loud) starts to gnaw – can this budget even be achieved?

While a new year can mean a clean start when it comes to new year’s resolutions, the same is unfortunately not true here.  Everything won’t just fall into place because it’s the start of the year.  KPIs won’t suddenly switch trend lines overnight on the 30th of June.

What will make all the difference is what you DO NOW to lay the foundations for the best possible start to the new year.  That means influencing the trend line and stock health as you approach the end of this financial year.

We know this is true, and easily recognize it in other facets of life.

Take a sports analogy …  the season only starts on 1 July, but the team that will win is the one who trained in the off season, watched videos of their past matches, learned from their experiences, strategised, had the right players in the right positions, built their muscles and fitness, ate right, monitored their vital signs, showed discipline and focus, sold out to their goals, coordinated their efforts to leverage the power of the team – all well before running onto the pitch for the first game, well before the whistle sounds.

  • How does your pre-season regime look?

  • How do your vital signs look?

  • Would you rate yourself as a favourite for the win? 

If this topic isn’t at the top of your list, perhaps it’s time to re-prioritise to win. Run, don’t walk.

 Start early, stay dynamic

This checklist may help you get on the right path:

Review

Have you conducted a thorough review (quantitative and qualitative) and taken learnings?

Have you assessed your stock health?

Strategy

Do you have a strategy that everyone knows about, has bought into or contributed to, that is expressed financially in a Merchandise Plan?

Resource

Do you have the right expertise and capacity within the team to execute the strategy?

Merchandise Planning KPIs

Are you measuring and managing the critical KPIs that will position the business for an optimal transition to the new financial year?

React

Are you staying nimble and flexing your plan based on new information?

Make FY20 your year of Plenty

I'll be unpacking these checklist concepts in my next blog topics on "Planning Matters"

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Looking SMART at the NORA Solution Provider Excellence Awards

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In this industry first event over 2,500 Retailers cast their votes in recognition of 135 Solution Providers, nominated across 34 award categories.

SMART IN PLANNING was nominated in 3 categories and we are beyond thrilled to have won 2 Awards, and have been finalists for a 3rd.

A massive thank you to all our amazing Clients who endorsed us with their vote.

These categories of BEST RETAIL INSIGHTS and BEST BUSINESS PROCESS OUTSOURCING go right to the heart of what we do.

We couldn't ask for a more meaningful validation of our contribution to the Retail Industry.

Beyond the votes and results themselves, the experience has been so uplifting with overwhelming messages of support, encouragement and appreciation coming from valued Clients and respected Colleagues.

SMART IN PLANNING is all about Merchandise Planning solutions for Retailers and Wholesalers - expert, tailored, flexible and accessible. That’s how we are changing the face of Planning in Australia.

Credit to the SMART IN PLANNING Team, who are so talented and passionate about Merchandise Planning.

Thanks to the NORA Network for playing such a pivotal role in the Retail community, and to the generous sponsors backing the event - Investec, Worldpay and Emailage.

Acknowledgment to all the businesses who participated in the awards and event, and importantly form the backbone for Retail in Australia.

View: LinkedIN Post #NORASPEAD2018

View: Inside Retail Article

 
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Merchandise Planning in focus with Paul Greenberg of NORA Network

Always a pleasure catching up with Paul Greenberg on the forward thinking initiatives that NORA Network is putting out into the Retailscape .

Ventured OUT of my comfort zone to do this video covering a topic that sits squarely IN my comfort zone #merchandiseplanning. SMART IN PLANNING provides solutions in “everything Merchandise Planning” – giving Retailers access to expertise and capacity through a flexible and tailored service.

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Inside Retail Interview – The Art of Buying

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It was my pleasure to be interviewed by Inside Retail on this topic.

What we do know is that Retail is diverse and dynamic in nature.

That’s why is takes a “special kind of crazy” to be in the Retail game (and we do love it!)

A common misconception, however, is that Merchandise Planning is a rigid, one size fits all discipline. Quite to the contrary, when Planning is done right, it understands and embraces the nuances of the underlying business model – even elevating the competitive edge through that point of difference.

Planning affords a framework for more informed decision making, as well as providing enhanced visibility, a measure of objectivity, and a glimpse at what may lie ahead (good, bad or ugly) - which allows for course correction to capitalise or avoid, as required.

This article from Inside Retail – The Art of Buying explores different buying approaches, with consideration given to the role that Planning can (should) play in partnership with a variety of models.

View Article: Inside Retail - The Art of Buying

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New Retail Series

What a privilege to be invited as the guest speaker for the pilot launch of the New Retail Series.

A collaboration between Skills IQ (previously Service Skills Australia), the Australian Retailers Association, and with input from the Retail Industry, this program is aimed at developing a much needed, nationally recognised qualification in Merchandise – including Merchandise Planning.

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Developing and nurturing Planning talent has always been a passion of mine, and I was honoured to have my personal journey in Merchandise Planning put forward as an example of a successful career pathway for aspiring Planners.

Much of my career in Australia has been focused on “growing our own”, and I am delighted to be able to help shape a program so critical to the future of Australian Retail.

With so many bright eyes in the room, and such rich mentorship and support in the Retailers behind these participants, it’s clear a seed has been planted…

View Guest Speaker BIO:  Susan Martin

View Media Release:  Senator the Hon Simon Birmingham, Department of Education & Training

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