It seems in life we are always preparing for the next event. Some folks even consider that this life is just preparation for the next. Parents prepare for a child’s birth by reading books and taking classes on birthing and parenting, buying baby clothes, preparing a room, etc. Once we are in this life, we are preparing for the rest of our life. Pre-school is preparation for grammar school which is preparation for high school which is preparation for college which is preparation for work.
Within each preparation level are a series of tests or events for which there is more preparation. We study so we can do well on tests. We practice so we can do well in sports. We rehearse so we will do well in the school play. Preparation, preparation, preparation.
Out in the working world, this cycle continues. As retailers, we are constantly preparing for the next event. The store is prepared daily so that it is clean, attractive and organized when customers arrive. Fixtures are purchased, signs are made, staff is trained, advertising is prepared, and on and on. We prepare for sales events, holiday rushes and every other event that affects our store.
The one area in which most retailers lack preparation is their buying. For some mysterious reason, they feel they need little or no preparation to buy merchandise. It’s as though they feel there will be some divine guidance when it comes to purchasing the merchandise which is the life blood—and the bottom line—of any retail organization. This attitude may have worked in the past, but as retailers face more competition and greater awareness on the part of their customers, it won’t work any longer—not if the retailer expects to turn a profit and stay in business.
Buying is easy—the preparation is work. Every buyer needs time on the sales floor. You need to really know who your customers are and what they are looking for. You need to know your stock—the winners and the losers. You need to know the quality of the goods you are receiving from your various suppliers. You need to see how it all fits together to tell your story to your customers. The more prepared you are, the better items you will select. Some of this information can be gained from inventory control records (POS), but much of it must come from time on the sales floor.
Once you have a good handle on the needs and desires of your customers, you must determine how much merchandise to buy. This can be accomplished with more preparation in the form of an “open-to-buy” plan. An OTB plan will tell you exactly how much merchandise to purchase (receive) in each category each month for the next twelve months. With an OTB plan you will be prepared to evaluate any buying opportunity that is offered to you. If you buy against your OTB plan, you will see a consistent flow of new product into your store in just the right quantities. This will mean leaner, better balanced inventories that are fresher, turn faster and result in fewer markdowns and a positive cash flow.
You are not prepared to commit your buying dollars if you don’t have an OTB plan, it’s that simple.