Action Pointer #7: M.T.I.W.F.Y.

– Mike Tesler

Last month Don Capman discussed B.I. & K.P.I. which are among the many acronyms relating to the vast amount of data and information available to retailers today. Most of you are using quality POS software such as Retail Pro. Don mentioned ProMax “uses data provided by Retail Pro and provides analysis on more than 70 Key Performance Indicators (K.P.I.) critical in running a successful retail enterprise.”

Getting this valuable information is very important, knowing what it means and what to do with it is even more important. Here is where M.T.I.W.F.Y comes in. This acronym stands for “Make The Information Work For You”. We frequently speak with stores that operate with major competitive disadvantages because they do not know the basics about merchandising, buying and inventory control. They are the equivalent of doctors who never went to Medical School and who are working without understanding the fundamentals of medicine.

For example, your Information Systems (POS) should identify your “stars and dogs.” What do you do with information about best sellers (“stars”)? Do you get to it as quickly as it is available to place re-orders? Do you understand the importance of re-orders? They produce higher turnover which is key to bottom-line success. Re-orders allow you to beat your competitors, and increase your leverage and credibility with your vendors. Of course, re-orders most importantly keep you in-stock with the items you are selling; they are the ones your customers are telling you (with their dollars) they want.

Ok, so you figured out what to do with the information but did you and your team try to analyze and determine why these items are/were “stars”? Was it the brand, the item, the color, the price, the timing, or something else? The saying “knowledge is power” is trite but true. Great buyers are always seeking more knowledge about their merchandise.

The same approach must be applied to the “dogs” (poor sellers). You must quickly know what didn’t sell in order to take timely and productive markdowns; this keeps your inventory moving and fresh (turnover again). Then you adjust future orders-- if you had more of these items coming--to allow space for new merchandise, and for profits. I suggest you understand why the inventory didn’t sell so you can learn from mistakes while weeding out weaker vendors and SKU’s. Was it brand, price, color, item, timing, etc.?

Your time is limited so you can’t be reviewing 70 reports each day, but you must know which reports are critical for your business and you must know when to review them. Most importantly, you must know what to do when…….then you will be M.T.I.W.F.Y.