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Fifty-two percent of your business’s cash goes to inventory, making it the most important aspect for success.
Creating an Inventory Management plan or an Open to Buy plan is going to not only help you stop winging it at market, but it can also help you understand your customer, your inventory patterns, and start making you more money with maybe even less inventory.
Dane Cohen is the Director of Sales and Business Management at Management One, and he is sharing some serious tips and advice for retailers who might be weak when it comes to inventory and the data that comes along with it.
The biggest takeaway I want you to have from this episode: Get Started.
You have to take action and start understanding how your inventory is performing. Get granular and start tracking by category. Dane calls every different category of inventory its own “mini business”.
Do you have old merchandise sitting around? Never let it celebrate a birthday. Dane’s tips like markdowns, visual merchandising, and marketing are key for busting those inventory trouble zones.
You’re not going to want to miss the breakdown of Dane’s 3 tips to get focused.
- Track your purchase orders
- Facts over Feelings
- Take Action
There are so many factors when it comes to sales, so dig in and really get a full picture of the data to make a plan.
AND stop thinking your POS will be the catch all for these important aspects of your business.
I’m rooting for your success!
- The dangers of not planning inventory management.
- Are you showing up to the market with a budget and a plan?
- What tools are you leveraging for product decisions?
- How to move aged inventory and trouble zones.
- Tips for taking action in inventory management.
- How to control cash flow.
Mentioned in the Episode
- Management One
- [email protected]
- EVOLVE 2024 in Denver, CO – Crystal Media
- Crystal Media Insiders
- Crystal Media
- Crystal on Instagram
- Crystal Media on Instagram
- Crystal Media Co – YouTube
Crystal: In this episode of Rooted in Retail, my guest, Dane Cohen, is super Rooted in Retail. Personally, he has a lot of experience and he is currently the director of Sales and Business Development at Management One. And Management One is such a great company. A lot of our retailers work with Management. One I’ve seen and I’ve seen and heard a lot of success, and it’s really important for you as a retailer to understand inventory management. Open-to-buy planning, sales, forecasting, all these things are really critical to the success of your business. And as Dane and I stopped filming, we were talking offline and he said, you know, it’s pretty bizarre how many retailers don’t. Plan, they will go to market and just buy things that they like. And there’s danger in doing that. There’s real danger in doing that. And you’re going to hear about that on today’s show. So you’re really going to understand, you know, the importance of open-to-buy and inventory management and you’ll hear a common misconception. Dane has three really great tips to help you get started and, and really to help you focus and we talk about that at the very end of this episode. And just some examples of how you can move. Like if you’ve got too much inventory and you need to move it, Dane’s got tips for you. We talk about balancing newness and freshness of your inventory while keeping the cost, you know, the realities of the costs of our inventory under control. He’s got just really great insight and I think you’re going to get a lot of value out of this episode. Before we dive in, let me introduce you to my guest. Dane brings more than a decade of experience in the fashion, wholesale and retail industry to the management. One team independent retailer, is in his blood as he formally led the retail division of the family-owned chain of specialty department stores Lester’s. Prior to that, he oversaw the global sales relaunch for the men’s collection of Helmut Lang, working with retailers to build distribution channels and growth strategy. Getting his start in the industry at Project Global Trade Show, he built relationships across the men’s wear industry. In launched the inaugural season of the tents, passionate about the new future of retail. Dane is excited to work with retailers and strategic partners to grow the management one network and help strengthen independent and family-owned retail businesses. As the director of sales and business development, his diverse background in leading sales and retail teams, brand marketing, events and merchandising, provides him a unique and informed perspective for their clients. Dane lives in Manhattan and when not working, you can usually find him focusing on fitness cooking. Jamming to new music on Spotify or shopping, of course. All right, let’s dive in to this episode. Welcome to Rooted in Retail, the show that’s dedicated to helping independent retailers thrive in today’s everevolving retail landscape. I’m your host, Crystal Vitis, and I’m thrilled to have you join me weekly as we explore topics that are vital to the success of your store from marketing to mindset. Money to merchandising. Sales to leadership will cover it all. Each episode features interviews with industry experts and accomplished retailers who share their real life insights and actionable advice. Get ready for a great conversation on how to build your dream business with Rooted in Retail. Dane, welcome to Rooted in Retail. I’m thrilled you are here.
Dane: Thank you so much for having me. I could not be more excited.
Crystal: I know we were just saying off camera how excited we were for this conversation. I’m especially excited because a lot of our retailers use Management one, and I’ll say our successful retailers, like I just, the clients that we have that are using Management one. Are knocking it out of the park. I’m such a believer in what you guys do. And in fact, episode eight of the show, I interviewed Anna of Pilar who said, I wish I had management one from day one. it saved her so much hassle. She just loves you guys, and so I’m really happy you’re here and. I am kind of newer though to the inventory management world, so I’m going to be a very curious mind and ask some questions here, and I’m just really excited to learn. So let’s just start. What is open to buy and why is it so important for retailers to use it when purchasing their inventory?
Dane: Okay, great. So, you know, this is something really interesting that I, that I find that I have to talk through with retailers a lot. And so inventory management and open to buy planning are two very different things, right? And I think that there’s a lot of terms that start to kind of blend together. Now, open buy planning is a piece of inventory management, right? Inventory management could be something as simple of as keeping a list of your products in an Excel spreadsheet, right? That’s a form of inventory management. So open to buy planning is kind a really specific practice within the overall context of inventory management. And here’s why it’s so. Important. Really at the core of it, the definition is, you know, you’re creating a process around your inventory purchases, right? So essentially you’re creating budgets for when you go out and buy new inventory and merchandise. Why that’s so important is in most retailers, right? You could survey a majority of retailers, you’d be hard pressed to find any out there where their inventory. Is not their largest cash investment in their business. So nine times outta 10, any retailer out there, their inventory is going to be the place that they are placing the most amount of cash in their business. Right? It’s usually somewhere around 52%. So 52% of all the cash that you’re making, all the revenue is going right back in to your inventory, more than your rent, more than your payroll. It dwarfs everything, so creating budgets and a process around how you’re going to buy and how you’re going to purchase, there really aren’t many things that could be more important to the success of
Crystal: Right. No kidding. Okay. So that is amazing. And yeah, but the thing is, I think that a lot of retailers don’t have that process. Would you agree? I mean, I just feel like it is, yeah, they might have inventory management, but they’re not doing the open to buy and having that budget. Right.
Dane: And so, you know, I’m always amazed and, you know, I’m very fortunate that everywhere that I’ve worked, whether it be as a buyer or on the wholesale side, I was working alongside planners, right? So I kinda had my inventory, the open buy piece of it being worked out by a planning department. And if you look at any major retailer, I mean take a, a Target, a Walmart, a Bloomingdale’s, Macy’s. They have full planning departments and full buying departments. And those roles are very different. It’s a little bit left side brain, right side brain, right? Someone who is. A great buyer who’s an excellent merchant, who has a understanding of the customer needs, who can spot trends ahead of time, who could curate assortments, who can really, be on top of who’s the next best vendor out there, and who, what brands are emerging may not be the same person that is the. Qualify to do a full, you know, planning and buying, planning system for your retail business. So as independent retailers, we have to think with both sides of the brain, right? You’re your own buyer, your own planner. so it’s not an easy feat to accomplish even though it’s so important. It’s not very intuitive, right? And so most the times retailers. Aren’t using an open to buy system. You know, they’re kind of going into market and for some respects they’re just winging it, right? They go, they see what they like, they make their purchases, they stock up and they let the chips fall where they may. So you know, I always encourage, and I’m, I’m very, direct about this. There are a few different ways that you can get involved with inventory planning. You know, we were just both at, the, whizzbang Retail Success Summit. You know, they have a great intro system. To, you know how to think about open to buy planning, right? That may be a great place to start, but as your business grows and as your business gets more complex, and as you add on more categories and potential more locations, this becomes increasingly more difficult to manage, to keep track of, to keep updated, and to really draw the right conclusions from all this work that you’re doing. so I, I am a firm believer that there is not a business out there, not a retail business out there that will not benefit from open to buy planning, right? The fundamentals of retail will always work in your favor if you make them work for you. So I think it’s really just about. Get started, take some action. you know, whether it be planning at a really high level or whether you really want, go more specific into your categories and really see where. Really achieve growth in your business.
Crystal: Yeah. And will you take us a little bit like behind the scenes here? Because I remember I was, I was at a management one event with all of your affiliates a couple years ago, and I was having breakfast with these ladies who were talking about like their coaches, they help retailers, they use your software, and they were talking about the data that you guys have on. If I’m saying this right, all the classifications, all the different types of products out there that, these retailers are buying. And, you know, you can forecast trends and you can help from a planning perspective of what you know the consumers are buying and based off of your data. And so I’m looking for a little behind the scenes of like, What does that give? And then if, and then how are you planning? Like how are you helping the retailer plan? I’m assuming you’re using your data, but then how else do you do that?
Dane: Yeah, so I think the best way to think about it is through the lens of your category structure and hierarchy. Right. So a great retail business really sits on the foundation of a great category structure because at the end of the day, product is the most important thing, right? That’s why people are coming to you. They want a great experience, but they really want that amazing product. And so how do you keep track of all of that, right? Is it just everything’s flowing into your POS system and nothing’s being labeled correctly? Or do we have a really firm understanding of what everything that is being sold falls under, right? So mm-hmm. You know, candles, maybe a very behave very differently than footwear. Right. You may be a business that sells both, women’s dresses may even, you know, really be a different type of business than women’s tshirts. There’s different seasonality, there’s different, customers for it. There’s different price points. So being able to track how. Each category is performing within the overall business is so foundational to the success of how you are, one, just tracking your business. Two, going to make future decisions starts right? You know, that’s where a POS system is really going to give you the best results if you have everything labeled correctly. If you are kind of following a process. Cause listen, even the smallest mistake, right, if you spell tshirt one time without a dash in it, right? One time it’s T-shirt, one time it’s T dash shirt that could throw off the entire category structure of your business. It’s crazy, right? Yeah. And so what we’re able to do is once we’re able to pull the right data and look at the business, how it should, right where each category is, almost like a mini business within your larger business, we can then start seeing how has it performed in the past, and based on that, we can start putting in predictive formulas to see where we can grow this to, right? What’s the true potential? Of this category or vice versa. Right. Maybe you’ve been investing your hard-earned cash into a category that’s just not performing for you. Right. Right. You know, a lot of times we see a retailer that may have this passion category. Right. I love food, so I brought in some honeys and preserves and jams. Right. Okay. That’s nice and it’s good that you tried it, but what’s the data telling you? Right? How’s it performing? How’s it, how is your cash working for you? And if it’s not, then we have to make some real decisions on how.
Crystal: Mm. Okay. So good. I’m so getting it. I’m loving this. Alright, so then what tips do you have for the retailer to balance the need for newness and freshness in their inventory with the financial realities of keeping inventory costs under control?
Dane: Okay, so Crystal, this is the million dollar question, right? And this is probably the toughest part of retail, right? Especially in the buying process. You know, you always want to be landing new goods, you want that freshness, but sometimes your bank account just doesn’t allow for it, right? And you know, it kind of goes back to what we were speaking about before. Inventory is the largest investment in your business. The more you can plan around it, the more predictable it becomes, and the more your money works for you. Right? So there’s two kind of schools of thought to this. One is the more you plan, the more you’re planning in the freshness into your business. Right? A big mistake that a lot of retailers often make is they’re front loading their merchandise, which means that, you know, let’s say for the spring season, they’re landing all their product maybe in the end of February or early March, right? That’s kinda the old school seasonal, approach to retail, right? If you’re looking at a women’s apparel business, right? We bring in all our spring merchandise lands at the end of February into early March, and then we start to taper off in deliveries. If we kind of shift that thinking and start planning for, Hey, you know what? I want a good assortment to land in that early March, but then I want to refresh it mid-April, and then I want some, you know, fresh new goods to land mid-May. The more that we plan this. The more that we’re able to work with our vendors in actually delivering that, and the more we’re able to balance the kind of financial realities that exist. Because if you front load too much, then you’re building up your whole inventory and then just waiting for the cash to come in. So by pacing it out a little bit more, by creating those circumstances ahead of time, you’re setting yourself up for success. the other thing I would just say, and I, I think this is really important cause there are a lot of people that may say, you know what, that’s great. I want to, that’s where I goal to be, but I’m here where I am today. So what can you do today? Well, there are two really big things. One, if you are sitting on old merchandise, it’s time, time to get rid of it. Right. And I think that retailer’s perception of what old merchandise is can be really run the gamut, right? So someone may think eight weeks old is old, right? And someone may think eight months is old. So really, you know, Sometimes I speak through the lens of women’s apparel, so it’s going to differ from, you know, vertical to vertical. But once you get past that eight to 10 week point, you’re starting to see exactly how the customer’s voting on this merchandise, right? They’re voting with their wallets. So if something is not moving, if something is sitting there, if the are just not getting. you know, inching up if you are starting to see the receiving dates get further and further away. Right? We always like to say merchandise and inventory should never have a birthday, you know? Mm. So, and that is, that is a reality that not many retailers take to heart. You know, it, it really is so super vital that you, I, I would say that a sell through report and an aged inventory report are a retailer’s best friends. Start to look for what’s having a slow start to the season, start to look for what’s been there for too long. And that is a great way to generate cash. So if you’re, if you feel tight, like you can’t bring new things in, the best way to make room for them is by clearing the old out. And that’s going to free up cash. It’s going to put it back into your pocket, and hopefully you can invest it in new, more exciting, more relevant, productive merchandise.
Crystal: Awesome. So good. So good. I love birthdays, but we don’t want ’em with the inventory. All right. People, we don’t. No way. Yeah. All right. Okay. So talking of freshness, you said something, it evolved. That really blew my mind. So for retailers to re-merchandise their store and have it look fresh, You said that the average boutique changes their does remerchandise three times a year. Where Zara, the major clothing brand, does this on average 17 times per year, which I was like, whoa, that is nuts. But then as I started to think about it, every time I walk by the store, I’m seeing new stuff. So what is, is there a magical number of how many times the retailer should be re-merchandising their store?
Dane: Yeah. So I’m, I’m going to the, the statistics, let me just kind of roll back the statistics. Yeah. A little bit different than how I included in my presentation, so Okay. But I think it’s more mind blowing, so get ready. Okay. The average amount that a Zara customer visits their store, their local Zara is 17 times a year. They’re walking into their local Zara 17 times A is. Over the moon for that, right? Yeah. And that’s why they’re the largest boutique in the entire globe, right? They’ve nailed this. The average amount that a, boutique and independently owned boutique gets their customer to visit is three times a year. Now. Got it. Ok. One of the biggest components that Zara uses is visual merchandising. Right. So there’s two really tremendous things that they do. Remember how we were just talking about that aged merchandise, their timeline for aged merchandise is six weeks. Six weeks. Wow. If merchandise goes past six weeks, they take it out back and it is done. Okay, so they are constantly moving goods through their business. They don’t want you to walk in and see the same thing twice. And so that’s where the visual merchandising piece comes into this. They change their windows, they change their floor mannequins, they change their, you know, you may see a blazer one week in their suiting department, and then the next week it’s. You know, over a t-shirt with a pair of shorts in their summer department. So they want you, even if you’re seeing the same product twice, you’re seeing it in a different way. And listen, one of the reasons why people only visit, private, independent boutique three times a year is cause sometimes they walk in and they just see the same stuff. You have to give your customer a reason to come back. So again, there’s two ways of doing this, right. For freshness and you’re open to buy, so you’re constantly going to be flowing in new merchandise. But then once it lands, it’s gotta move. It always has to be on the move in your store. And so the way I like to think about visual merchandising is two ways. You have floor sets and then you have. Moving inventory around. So a floor set is when you’re creating a seasonal presentation, that’s when you’re creating, you know, a story that you want to tell. And so that may happen, you know, twice during a season, right? You want to get that first seasonal presentation, and then maybe you flip that floor set a second time during the season. In terms of floor moves, this is where you really have to be powered by data. So you have to see, right, right. We go back to that sell through report. Where are their slow moving categories, where they’re slow moving products and then start moving them around, right? If something’s not working, because you maybe paired it, you know you have a great sweater and you paired it with a pair of jeans and it’s sitting on a table with jeans and. sweaters. Maybe you have to move it, maybe you have to move it to another place. Maybe put it with a pair of shorts and show a different way of styling it, right? Yeah. So the more we can move things around, and that could even mean something as simple as it’s sitting in the back of the store, let’s move it up to the front. Or you have a great accessory that you really were excited about when you bought it in market. Maybe show it by the cash wrap, right? Get the eyes on it. So you constantly want to be thinking about how I can move the pieces, and then you want to do probably two seasonal floor sets to really tell a story.
Crystal: Okay. That’s, that makes a lot of sense. And for anybody that’s listening, like Dane mentioned, he’s using boutiques and clothing as an example. But if you have a, if you’re a pet store, if you’re a toy store, if you’re a hobby store, all this applies. Like you’re looking at when you, you’re. How can we move things around? What’s seasonal? Like this also applies and I feel like there’s gotta be people listening right now, being like, oh, I’ve got some opportunities to move some stuff around and try some different things here. And ideally, we’re really looking at the data too, and planning, like you said. So what happens if a retailer has. Too much inventory and they need to move it. Like what should they do?
Dane: Yeah, so I mean, this is where we kind of, and, and listen, this is one of the most, if not the most common complications that come up when dealing with inventory. Overbuying, overstocking your, your shelves. You just have too much, and I think this is when you really have to think. Markdowns are a tool. There is a reason that markdowns exist in retail. Every retailer takes them. Every retailer deals with it. I promise you, you will not be the first retailer out there that figures out how to cancel markdowns. They’re just not going anywhere. Okay? Right. It’s a cost of doing business. So use it as a tool, right? Use it for what it’s intended for. So again, you know, and, and I, I may be preaching to the choir, but we kind of go back to those tried and true principles. Look at your aged inventory report. Look at your sell through. You know, have, and this is where inventory management becomes really important, if you’re keeping track of your receiving, if you’re entering your purchase orders. If you are tracking your inventory, then you can make decisions based on what that tracking is telling you. Right. So if you have product that’s been sitting there, and again, the customer has voted no with their wallet, it’s time to think about strategies to get it. Inventory. So listen, markdowns could look a lot of different ways. There’s maintenance markdowns. So that’s really kind of in season just looking at, Hey, what’s been on the floor for more than 10, 12 weeks? And maybe I could just change the price to the markdown price, right? I don’t even have to put it in a markdown section. I could just let it sit on the floor at the The new markdown price. Maybe it’s running a promotion. So let’s say you are a home decor store. And your table linens just are not performing right? Maybe there’s a weekend promotion for 20% off table linens, but it’s focused, right? It’s giving your customer an area of focus and then they walk in, they go, oh, that sounds nice. Maybe I’ll check out the selection. Right? It stimulates some purchasing because what we want to avoid is just getting to the end of the season. Right. And you’re at the end of your, You know, peak season, and then you have to take a gigantic clearance. Mm-hmm. That’s what we want to avoid. The sooner we can catch where we’re overstocked by category, remember we go back to that. Category management. The sooner that we see where the trouble zones are, the sooner we can start to put in, you know, real solutions to mitigate it. Right? So markdowns I think are just kind of the most effective way, but there’s some other strategies too, right? Visual merchandising is a strategy. marketing is a great strategy, right? You have something that’s slow selling, get it every channel you can get it out there, right? If you went in and you bought. this new sandal, right? You, you bought sandals for the first time. You’re bringing them in and they’re not selling. You better be screaming from the high heavens everywhere you can Facebook, Instagram, wherever that you have new, exciting sandals, right? And if we’ve done everything we’ve can and we’ve changed the floor location. you know, marketed it on all our social channels. Then if it’s still not selling, if it’s still not doing the business.
Crystal: that’s Awesome. So good. So many great steps that retailers can take in there. Lots of great ideas. Obviously use that social media from the marketing perspective that can help. alright. Can you share a success story where effective inventory management led to substantial improvements in a retailer’s cash flow?
Dane: Yeah. So one of the things that I, I haven’t really talked about yet is the cashflow piece of this. So, I do want to share a success story, but I just want to talk about the cashflow piece of this for a moment. Ok. Cause I think it’s so important. And, and here’s the real, interesting part about retail in specific. As a business, you can be profitable as a retailer and be cash poor. Right, and it’s because, right, and it goes back to that same reasoning. Your money is constantly going back into inventory. So if you’re not purchasing correctly, if you don’t have budgets around your purchases, you could be selling nicely and have a nice selling margin. But if you are over buying and just putting your dollars back into the wrong inventory, too much, the wrong places, you’ll constantly be taking one step forward, two steps back. So the key to unlocking cash flow is again, by really being able to pace out your purchasing right. What’s the right amount, what’s the right time to land it? So I like to think of retail like this. Retail takes a lot of product talent. Great retailers out there. They understand their product, they understand their customer. They have a vision. Those are skills that you can’t train, right? Those are real kind of talents and entrepreneurship. Everything else is a math equation. Right. There are just certain fundamentals of a successful retail business. Whether you’re the most talented, merchant out there, or whether you’re just starting out, there are just real fundamentals to how to be a successful cash positive business. So the more we can put those principles into effect in your business, the more successful you’ll be and the more it highlight your talent, right? Times retailers, independent retailers. Their talent is the product, their talent is the selling and understanding their communities. So I want to, with that being said, I want to, I’m going to read, I came prepared, a little testimony on this is an email. I got unprompted right after. Both Evolve and Wizzbang Summit, right? So this is a client of management ones. They’re, evolve attendees. So they’re obviously looking to educate themselves to evolve Success Summit. And here is what they wrote. This is truly the best thing I’ve ever done for my business and myself. Management one and my coach has offered me so much more than inventory planning. My self-esteem has grown along with my skillset. I’ve spent the last 19 years feeling like a misplaced artist with a full-time side hustle, and now I have a career. Oh, and so. You know, again, I kind of go back to, right, we have some incredibly talented people in our communities. They’re coming to evolve. They’re coming to the summit, right? They want to learn more about how they can take their talent and really take it to the next level. And so, you know, getting an email like this just makes my heart melt. Cause when we’re able to match those two things up and start seeing, you know, what Kristen was able to do, this is Kristen Ruggieri from Attitude, dance, and Active, where in Norwalk, Connecticut. And what we were really able to do with her by fine tuning some of the budgets around her purchases, we were able to increase her sales. While decreasing the average amount of inventory she was carrying. So that’s really the secret sauce. And we learned a lot about this in Covid, right? Because we were, it was really difficult to find merchandise and all of a sudden we, retailers were able to do the same, if not more business with less merchandise. So we don’t want to let that lesson fly out the window. You can do just as much sales, if not more, with less inventory on hand. And when you get that, that formula down, that’s where the cashflow really comes in.
Crystal: Wow, so powerful. What a big lesson and what an incredible testimonial that’s so meaningful. I love that so much. Dane, how does your team use sales forecasting in the open to buy process? Can you share how this impacted a retailer’s inventory management strategy?
Dane: Yeah, so sales forecasting is the foundation of open-buy planning, right? And there’s, again, there’s, there’s different levels of open buy planning. The way that we do it at management, one is a little more granular, right? We’re really looking for rich data for our retailers. So we’re planning buys and budgets by the month and by at the category level, right? So each month you are getting a sales forecast. And how much inventory you need to start the month with in order to achieve. And you’re getting that by on a category, by category level. So this is so important and here’s why, right? Your sales are the foundation of everything. It’s how you build your margins, right? You need to understand. Your total sales so that you can start to build in how much margin you’ll need to cover your expenses. So the sales really set the tone for everything. How much inventory you need, well that’s your stock to sales ratio. How much stock do you need to accomplish the sales that we’re projecting for you? So the closer we can get to the accurate forecasting, and I think that when we, you know, take those measurements at the end of the year, we’re 96% accurate to our sales forecasts, right? So people ask all the time, we wouldn’t be in business for 37 years if we weren’t accurately forecasting sales. So the closer you get to accuracy of your sales forecast, then you know what the right inventory level to support those sales are. And you’re buying to that level, not more, not less. Cause overbuying is a problem, but so is under buying, right? You may not be fueling sales correctly. So sales forecasting is really the foundation that everything builds from. And here’s a little kinda kind of tip that I like to give retailers. If you’re just looking for information about your future sales based on last year sales, you’re doing yourself a disservice. There are so many factors that go into why you hit certain sales. How much stock did you have last year? were there any, you know, outside conditions that were impacting the business? What was your turn rate last year? Were, did you have a marketing budget last year? You know, so all of these things could be different one year later. So you have to look at a multitude of factors when forecasting your sales. It’s not just, well, I did 500,000 last year, so I’m going to plan to do 510,000 this year. Right. What were, what was the situation that led you to that $500,000 in sales? And so when you plan, you never plan just based on arbitrary increase over last year. You plan on what is my full potential that I can hit if all the pieces of the puzzle are in place, and that is how we approach it. And then we give you the pieces of the puzzle to put together in order to get you there. Month by month, category by category.
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Dane, in your experience, what are some common misconceptions retailers have about inventory management in the open to buy process?
Dane: Yeah, well, I’ll give you something that is actually, I don’t think is a misconception. Ok. And that is open to, my planning is hard. It is hard, right? And it kind of is hard for two reasons. One, it takes a lot of upkeep, right? So even if you put the whole system in place, you have to upkeep that data really meticulously. You have to upkeep your labeling of product really meticulously. You have to track your order. So there is work and effort that goes into. Open to buy planning, especially if you’re doing it on your own. Mm-hmm. And then I think it really ties back to, you know, that left brain, right brain, right? There are a lot of retailers out there, at least from my experience, talking one-on-one with retailers that don’t feel like this is their area of expertise, right? There’s no, you know, degree in retail, right? There’s no degree in retail planning, so most people are entering into retail. And it’s their sometimes their first experience with really running and operating a retail business. So learning this is hard work. It is a hard part of this process, but at the same time, it is probably one of the most fruitful things that you can do to improve. the profitability, the cashflow, and the overall success of your business. Plus, once you’re on a plan, once you’re using a budget, it’s going to, and I think, you know, Kristen said this in her, you know, that little testimonial email, it gave me more confidence, right? Yeah. Because I’m doing what I’m great at, you know, which is, Selecting product, understanding the market. And then I have this support behind me, which is, I have a budget, right? So I’m able to go in and confidently say, I love that item and I’ll take X amount of it. Right? So you’re pairing those, you’re, you are almost matching again, that left brain, right brain thinking and putting it together and then seeing the results.
Crystal: Love it. Okay. Can you share the top three tips for retailers looking to improve their inventory management and the open buy process?
Dane: Okay, so tip number one, track your orders. Okay, and here’s one thing that I see without fail, people go to market or they’re buying, you know, on, on online buying platforms. they place a purchase order and they don’t enter it into their system. They enter the purchase order when the goods arrive. And what does that do? There are moments where your goods may not arrive for another three, six months, right? There are people out there right now that are purchasing for next spring. Those orders are not going to be delivered for many months. So if you are placing orders in advance and you’re not tracking your purchase orders, you don’t have a real picture into how much dollars you’ve committed to. So think about that for a second, right? You’re running a business, you’re worried about your cashflow, and you have no idea how many, how much dollars you’ve committed to, right? How much you are going to be expected to shell out once that spring season hits. So, tracking your orders, and there’s so many great technologies out there that can help you with this, whether you’re, you know, whatever pos you’re using. whatever, you know, kind of technological place you’re at, even an Excel spreadsheet, track tracking your orders would be a huge improvement over flying blind. But so tip number one is tracking your orders. tip number two, would be facts over feelings, right? And so data power decisions. I, I’m careful here because there is an art to instinct, right? There’s an art to being an instinctual buyer and an intuitive buyer, right? You want to catch a trend before it happens. However, we want to measure the success of it. We want to respond to it based on data. So a lot of the times, you know, we’ll see something like a retailer. You know, walk around their floor and say, I feel like I don’t have enough X. Right? I feel like I don’t have enough of this category or this product. Well, what do the numbers tell us? Right? Or another great example is I went out to market, I bought this, you know, extensive collection from a new vendor. I went really deep into it. I spent a lot of money. I really thought it was the bees knees, right? I thought it was the coolest thing out there. and then it’s not selling. So instead of taking action, they let it sit and they cross their fingers and they hope it sells. But we need to look at the facts, not your feelings. And then the third tip I would give, would really just be take action, right? Start taking action where it comes to open divide planning. There’s a lot of resources out there, there’s a lot of tools out there. And you know, sometimes it could feel like it’s almost too big, like you don’t even know where to start, but it’s. The longer you wait, the longer you go, you are just potentially setting up some real trouble zones in your business. So I’m happy to have a conversation with you. there’s some great online resources. Whatever your path to open to buy may be, start taking it now.
Crystal: Yeah. And that’s such good. Oh yeah, go ahead.
Dane: I have one more thing for you about misconceptions about open Dubai planning. Okay. Your POS system will not produce inventory plans for you, and so I to their pos. Be the central nervous system of their business. And in many respects it is right. It’s keeping track of your most important data, but your POS system and most POS companies out there will be the first to tell you, we are tracking your sales history, we’re tracking your merchandise. We are not giving future forecasted recommendations. So while some may have like a min max reorder feature, You know, that’s a, that’s a nice perk to have. That’s a nice benefit of a POS system. Sometimes they are not giving you open to buy plans. They never have. They never will. And so that’s a misconception I sometimes find because of that big umbrella term of inventory management. Right? There’s a lot of different facets to it. Your POS is not, POS is not a catchall for everything.
Crystal: So good. I can see how people kind of feel like, yeah, I’ve got it taken, covered. I, you know, I have that, but yeah, it’s not doing the planning and just jump into action. I think a good starting point is having a conversation with Dane. You can do some research and Googling. You can ask chat GPT some questions and it can give you some information. But I do really think that having that conversation to see what would be best for you. With Dane would be a good starting point. Such good tips. Dane, are you ready for the resilience round?
Dane: I am ready for the resilience round.
Crystal: All right. Best business book,
Dane: traction by Gino Wickman.
Crystal: Great suggestion. best retail technology like an app or software.
Dane: Okay, this, you, you may think this is a lame answer, but Google Calendar. Use Google Calendar. I can’t tell you how productive that could be on so many levels. Shared calendars, marketing calendars, knowing when important dates happened in the past and keeping track of it, showing up for appointments. Retailers sometimes aren’t the best for that, right? So we, I, I can’t express enough how important I think Google calendars.
Crystal: Yeah. Yeah. And don’t judge me, but I don’t use Google Calendars. My team is like, we, you need to use it. I, I do sometimes. I’m terrible. or the calendar app of your choice.
Dane: The calendar app of your choice.
Crystal: Yes. Yes. But you know, I feel like everybody’s using Google Calendar, so it’s so great. how do you keep up with the ever changing retail landscape?
Dane: Well, I’m fortunate enough that I’m able, Learn the most, understand the industry the most. See things before they’re happening really be able to plug in is meeting retailers, having one-on-one conversations and just. Mm. Because retailers ever-changing,
Crystal: how do you recharge your batteries?
Dane: So I, I this is, and, and I may be biased because I just went to the two of the most fantastic events, being evolve, which Crystal, you, you and your team did a incredible job and the Whizzbang Retail Success Summit, and, you know, As retailers, sometimes we become very siloed in our own worlds, right? You’re seeing your own merchandise, your own way of doing things, and I think that stepping outside of that, hearing what’s working for other people, just having conversations, you know, learning little tips, learning big tips, learning tricks, you know, the right ways of doing things, best practices, or just simply to share some. You know, complaints, right to, to commiserate a little bit. I really think that I walk outta every one of these events. Inspired, recharge, and with a new perspective.
Crystal: Mm, same. I couldn’t agree more to help retailers be stronger, rooted in success. What’s an inventory management Best practice.
Dane: Yeah, so this is something that I learned from my book. Selection Traction, by Gino Wickman. You should have a weekly scorecard, and that weekly scorecard should be the metrics that are most important to your business. They should be recorded week to week so that they don’t change, right? You’re looking at the most important metrics that make the most sense. You develop that, you know, we can definitely have a conversation about it, something that’s. Track it every single week, meet with your team about it every single week because you’ll never know how to track your growth, your progress, your problem areas where you’re falling behind if you don’t have a consistent method of viewing it. So a weekly scorecard. So important.
Crystal: Awesome. Finally, what do you think the future of independent retail looks like?
Dane: Yeah, so I, I love, love, love this question, and I think that this is, Probably the toughest pill to swallow for a lot of independent retailers. You’re never going to compete with Walmart. You’re never going to compete with Amazon. They’re going to ship faster than you. They’re going to outprice you. What you can deliver on is what makes independent retail amazing. The customer service, the relationship you have, your understanding of the needs of your customer and the product that they’re looking for. So I, I really think that as technology kind of becomes, You know, more and more accessible as you’re able to use some great, great retail technologies to maybe start to compete. We have to always bring it back to the tried and true principles that make independent retail great, and that’s keeping connected with your customer and really understanding their needs, and then delivering it in a personalized way, right? Our goals should never to become a big box, you know? Vacant, no face store. We want to keep that, you know, intimate connection we have with our customers. We just want technology to enhance that.
Crystal: Well said, well said. That was so good. Dane, how can people learn more about you and management? One, how can they get in touch?
Dane: Yeah, so the best way is to go on our website, it’s management one.com, oe management oe.com, management one. and there’s a lot of information there. There’s a lot of education. you can contact us directly through there, or I’m happy to provide my email if you want to, give it out there to the world. I am more than happy with that. And listen, I. You know, our whole team at Management One is passionate about independent retail, and we would be more than happy to have a conversation with you, a first step. It may not be right for your business right now, it may be the best thing that could ever happen to your business, but we gotta start somewhere, and let’s have that conversation and see what’s right for you.
Crystal: And I just want to give a plug because I, like I mentioned earlier, I went to a conference that Management one was doing with their whole team and everybody that’s works there and I was just so inspired by the education that they provide internally and they’re genuine passion to help retailers. And that’s the type of people that we want on the show and that we work with at Crystal Media. And, I, so I just, I can’t endorse you guys enough. And then I just also want to say, You guys do amazing educational events, webinars, join the email list. I always get value out of your guys’, newsletter that you email out. I think it’s every, a couple times a month, but definitely connect. There’s great resources available. We’ll link to the site as well as provide Dane’s email. And Dane, thank you so much for being here and sharing everything today on the show.
Dane: Thank you, Crystal. could I make one more? Yeah. you know, I just wanted to say that, you know, kind of the next level in terms of open-to-buy planning is when you start getting your marketing involved, right? So once you have this all involved, these two things coexist. Beautifully. So yeah, it’s so great to work, with you directly. You know, we’re both on the same mission to help independent retailers. We’re both coming at it from two different, you know, areas of the business. But once you have everything flowing right and you can start using data to power your decisions, it’s like the clients that are going to be the most successful, like Kristen, are the clients that are, you know, in your universe, in our universe. And bettering themselves all around. So, you know, it’s just so great to be here and so great to be a partner of.
Crystal: Yeah, teamwork makes the dream work, right? Yeah. We love helping these retailers make their dream work, so I so appreciate your time and for you being here, Dane, this was awesome. I learned a lot, and everyone who is listening, remember that I am rooting for your success and I hope you have a great week ahead. Thanks, everyone. Bye. Thank you so much for being here. It means the world to me. Don’t forget to join the Rise and Shine newsletter, which is. Social media news you need to know sent via email every Monday morning. Go to crystal media co.com/rise to join and don’t miss the newest episode of Rooted in Retail, which drops every Sunday morning.