Seizing the Re-Merchandising Moment

I was speaking yesterday with an independent retailer who was coming off a challenging 2009, but who was cautiously optimistic about 2010. There was one thing that was concerning him, however.

Out of necessity, he had drawn down his inventory in 2009. He was now looking at a store with significantly less merchandise, with racks and fixtures that were a lot lighter than they'd ever been. He recognized that he wasn't going to be able to quickly rebuild his inventory to its previous level, and frankly, he wasn't sure he should anyway. Still he was concerned about how his customers were reacting. Was he going out of business, they wanted to know.

This is not an atypical concern right now. Many independent retailers have had a similar experience over the last couple of years and are asking themselves similar questions.

Opportunity is the mother of invention. For many independent retailers, rebuilding inventories to previous levels would not be smart. Most of them would concede that they once carried more than they really needed, and have learned that they'd rather have the cash in the bank. This moment, then, represents an opportunity to re-merchandise the store, and create fresh presentations that wouldn't have been possible when inventories were more significant.

Independent retailers need to seize the moment.

When I've work with clients on right-sizing their inventories, re-merchandising is almost always part of the process. Assortments need to be adjusted and space re-allocated. Still, while recognizing they were carrying too much, owners are understandably concerned that sales might suffer. From my experience, however, sales almost always go up.

Where stores once were stuffed with 12 or 15 pounds in a 10 pound bag, now they only have 8 or 9 pounds. Now, there's elbow room. Now, the merchandise has room to breathe.

It's not just about shorter arms on four-ways and shorter peghooks on slat-wall. Now there's an opportunity to widen out aisles a bit and create better sight lines and impact. Now there's room to turn garments face out and create more dramatic presentations. Now there's the ability to create vignettes. Now, there's room to space things out and create greater impact for every line or program. Presentations become much more powerful.

Re-merchandising in this way dramatically increases the visual appeal of your assortments, thus increasing the impulse quotient. Customers stop and linger more, they're drawn to things they never would have noticed before. And that leads directly to a bump in sales.

There are many virtues to leaner inventories. Inventory turnover increases, creating a better balance between cash and inventory. Cash flow improves. Assortments remain fresher, with a higher percentage of new merchandise on the floor. And finally, leaner, more focused inventories lead to greater sales. This moment, then, is an opportunity for independent retailers to move their stores forward in a way that's prudent in the short term, and will set them up for sustainable success over the long term.