In the summer of 2017 Burberry made the headlines for having destroyed £28m of (unsold) stock to guard against counterfeits – a practice understood to be common across the retail industry. According to the Times, more than £90m of Burberry products have been destroyed over the past five years. A company spokesman said: “Burberry has careful processes in place to minimise the amount of excess stock we produce.”
What a gift headline, as I put finishing touches to a client session on how to generate more sales from range management.
I’ve ranged product from bars of soap to bars of gold, coffee makers to carpet and it isn’t or shouldn’t be complicated; but it’s often seen as a dull, number crunching, thankless task, especially when trying to recruit in today’s digital obsessed world, where the very basics of range management appear no longer relevant let alone appealing – it’s more than just posting, it’s about profitable sales too!
In prepping for the session, I came across these key responsibilities I’d written a decade or so earlier for a Product Manager:
1. To develop and manage a designated product range so that the offer remains comprehensive, competitive and profitable.
2. To ensure each product category is maximising its contribution to the business through the Product Life Cycle.
3. To ensure that the service propositions are effectively in place to meet customer expectations and company financial targets.
Which is all very well for the larger businesses that can afford to employ teams of marketers and product managers to sit alongside their data analysts – something which is often beyond the resources (or desire) of the SME. But that’s no excuse for SMEs because effective range management is not rocket science, but YOU do have to find the time to do or lead it within your business until it’s embedded in the process culture.
To help get you thinking about range management, here’s my 5-step process that’s served me well across a variety of sectors.
Step One: Understand & Define
What business are you in?
What business do your customers think you are in?
This is easier to answer than you think, just look at the specific number of items you sell, for example a watch retailer who only sells 1 watch a week and 1,000 watch batteries a week is clearly perceived by their customers as the place to go for watch batteries not watches.
If you don’t know what specific business you are in, how will your customers know – this is an important first step, as it add customer centricity to your process.
How does your range enhance your brand?
What does your range offer your customers?
Step Two: Review & Decide
Know your target customer – the clearer you are the more likely you are to engage them.
Make your data visual & bring it to life, physically spread it out in front of you.
I used a “runners and riders” board for carpet, an idea suggested to me by a multiple retail buyer with a passion for horse racing. On the wall of my office were my top 25 best sellers running left to right, with the best-selling colours running top to bottom – over 500 swatches, which were repositioned monthly with the latest sales data – it’s true a picture is worth a thousand words.
Fill your data gaps, it exists somewhere in your business; so just collect it and don’t accept vague answers from yourself or your people.
If this sounds all too much in terms of what you are doing now then keep it simple, get your range out in front of you and identify product duplication, gaps and similarities, that alone would be worth doing yourself, as you’ll learn so much about the short-comings in your range.
Step Three: Seek & Find
For some of the businesses I worked in, this step would have covered several product options within the range such as: make, buy, hybrid, generic or exclusive.
Yet the process steps within step three, were common and put simply as:
Write a shopping / new product development list
Write a specification
Set your budget
Know your sell price
Be clear on the margin
Remember the range fit
Hold the customer proposition
Today finding product couldn’t be easier – just asked Mr Google.
The challenge is spending your money with reputable suppliers, who not only deliver a product on time, in full, fit for purpose and on the price; but meet product & business compliance requirements as a given. They show a genuine interest in being part of your business growth, provide a stream of new ideas and are a pleasure to deal with – as I said it’s a challenge, but these suppliers once found should be encouraged to become “part of the family” or in consultancy speak – strategic partners.
Step Four: Present & Sell
In true Gallagher brother nuance – What’s the story?
If this is not a unique product, how are your competitors selling similar products?
Do you want to imitate or differentiate?
What experience are you offering?
Ensure every proposed activity builds & reinforces the perception of the business you want to be in.
Agree the approach and then train, train, train your people.
The key is to get your people as excited about it, as you were when you sourced / made it.
Step Five: Review & Act
Thinking back to the key responsibilities above, review your range performance by answering the following half dozen questions at least once a year.
Q: maximising its contribution?
Q: meeting customer expectations?
Q: delivering company financial targets?
To ACT WISELY on what you now know, is probably the hardest aspect of range management as it demands a considered head not just a passionate heart – for the profit is in the detail of your Range Management.