The problem with open to buy systems.

I’ve been touting my open to buy systems since 1985. And in every respect they are the one merchandising tool that EVERY retailer must have if they want to maximize their return on their invested capital (make money).

So, what’s the problem? Well, like everything else in life that offers benefits, an open to buy system needs your input. Well, “duh”, you’re thinking, but it’s not that simple. An open to buy system is about numbers and is generally done with a computer, two things retailers generally don’t embrace.

Retailers are creative folks and love the creative aspect of their business. It’s probably why they chose retailing in the first place, since retail is and unending opportunity for creative expression. Retailers spend time on how to bring in more customers, how to dazzle them when they cross the threshold and how to close the sales and send them out with their bags heavier and their wallets lighter.

Of course, all of this creative thinking needs to be based on a foundation of, yes, numbers. Without those numbers, things tend to go “off the tracks” in rapid fashion. Suddenly, a retailer is facing excess invoices, bloated inventories, markdowns and cash flow problems.

So the problem with an open to buy system is that it requires constant attention. And by constant, I’m talking about a little time during the month to keep track of new future orders and some time at the end of the month to review the month just ended, look for trends and make revisions. In reality, it’s no big deal, but it’s just too easy for retailers to find reasons to postpone dealing with – numbers.

So, that’s the problem with open to buy systems. Actually, the problem is the retailer’s refusal to recognize that any business, especially retail, must be based on a solid foundation of numbers. Once they accept that, there’s no problem at all!

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