January 18, 2007
Execs Told to Open Their Eyes to Talent
The former CEO of Gap Inc. and the current chief of J. Crew told attendees at the National Retail Federation convention that there are plenty of good merchants working in the business, according to a report on the Women’s Wear Daily web site.
Mickey Drexler said the notion that the fashion industry is starved for talent is wrong. “The merchants are around – if we unearth them,” he said.
Mr. Drexler called up the industry to develop talent from within and nurture creativity in a business that is now often putting fast before fashion.
Talking about his own early days in the business working at Bloomingdale’s, he said, “I was a bit of a maverick. I spent most of my time dealing with customers, discovering what they like and don’t like, and making a profit. I became an instant buyer. I would buy anything that looks good. I don’t think the industry inspires us to allow that to happen anymore.”
Mr. Drexler is also not a fan of relying too much on consumer research to make marketing and merchandising decisions. “If anyone doubts that this industry is based on innovation, they are wrong. There is no reason not to start thinking more creatively. The gut is important. Making mistakes is important. What doesn’t kill you, will make you stronger.”
So far it appears as though J. Crew’s CEO has made few mistakes going with his gut since joining the company. The retailer has been one of the most successful merchants in recent years. This past holiday, the company posted a sales increase of 17.3 percent compared to the year before. Same-store sales were also up 8.5 percent compared to 5.4 percent in 2005.
Discussion Questions: Have merchants as they’ve been understood in the historical sense been taken out of the broad retailing business? Has the reliance on consumer research and fact-based decision-making helped to take the creativity out of much of what we see in the retailing business today?
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Unfortunately, in the recent past, I have worked with too many companies in which ‘the merchant’ doesn’t exist. The merchant is considered ‘the buyer’ and not someone who necessarily has a feel for the customer; only a shelf filler role.
Many of those who would have been considered for the more visionary position are outside of these companies and working as consultants. Hardly a way to really connect with the store and the merchandise. This is also a difficult way for organizations to grow new merchandising talent.
As an earlier respondent noted, we need both merchant and research people involved in retail, the old and the new professions, to help organization grow and maintain the strength they earn.
Retailer executives could look to the culture they have created within the organization. I believe that “zero tolerance” toward mistakes has become more and more prevalent. The reality behind being a merchant is that you will be “wrong” at least as often as you are “right.” The trick is how many of your chips were on the “right” ones. All too often, buyers today are afraid to be merchants. The cause lies in the corporate culture. To be a merchant means to interpret, to anticipate, and to be wrong.
I grew up in retail, as a buyer, in an organization that both encouraged risk taking as well as providing the support needed to balance those risks. The planning and control side of the company existed to assist the buyers in managing risk, not in preparing reports to identify “bad” buyers. In the event of disagreement between the planners and the buyers, senior seasoned executives made a decision one way or the other.
Is the talent out there? In part that depends on hiring and promotion policies and practices. If you’ve hired for entrepreneurial talents, then you have merchants waiting to be found. If you’ve hired for corporate assimilation talents, then it’s unlikely you have merchants waiting in the cubicles.
Overall, as a consultant, I see between 10 and 20 new business ideas a quarter. All of them show that creativity is alive and well. None of the idea generators would even think about working in a large retail environment. Telling, don’t you agree?
Consumer research is a great tool. But what defines “research”? Every retailer has “research results” every hour. Great merchants use that “research” as well as their instincts and experience to make decisions. Sometimes retailers use “classic” research (focus groups, surveys, etc.), too.
It would be interesting to see if Mickey Drexler could return to The Gap and turn it around. The Gap announced that the company might be for sale. Would it be better to just rehire Mr. Drexler?
We have talked about this subject here before, and I still maintain my view that innovation and creativity have been replaced, for the most part, by cold data.
Mr. Drexler is right. That old merchandising instinct is no longer encouraged, much less nurtured and taught by retailers. The vast majority of buyers have become analysts and the results are quite evident: me-too stores offering no compelling proposition to today’s customers starved for uniqueness and individuality.
I think there are really two questions to be answered here…
1) Do we need the art of merchandising to decide WHAT to buy? The answer is an unequivocal YES. Nothing will ever replace the “eye.”
2) Do we need the science of forecasting, allocation and replenishment (and real estate site selection for that matter) to help determine HOW MUCH and WHEN to buy along with WHERE to put stores? The answer to this question is also an unequivocal YES.
Regarding the question of whether Mr. Drexler could fix Gap: Gap has two problems…its signature style has been commoditized. Even their “skinny pants” marketing campaign did nothing to encourage buying specifically at Gap. And second, they have too many stores. I guess you call it an over-saturated market. I assume Mr. Drexler could fix the first problem; the second is trickier, depending on lease commitments.
At the end of the day, I mostly agree; look to the next generation merchant, who nurtures both left and right brained decision-making.
We ought not conclude that the ready availability of data actually means that the data is being used.
As just one of many examples, Thom Blischock was quoted in the January 2007 RIS NEWS that:
“I recently did a project in which I looked at 25 stores in the convenience food and snack section. The average number of SKUs for these stores in this section was 4,278.
Can you guess what percentage of those SKUs DID NOT SELL A SINGLE ITEM IN ANY OF THE STORES IN 30 WEEKS? (emphasis mine)
Astonishingly, it was 72 percent.”
It is more than useful as a merchant to “have a good gut.” It’s better to back up the good gut with probing analysis.
In fashion, there are a broad spectrum of products: some that require a great deal of intuition, creativity and trend awareness in the selection process (such as junior sportswear), and others that benefit more from ongoing analysis and slow evolution (such as men’s dress shirts). In between, are most mainstream products that have some degree of predictability, but also require some subjective risk-taking to be successful. Good merchants in most roles need to be both analytical and creative.
It is true that increase in the availability of and ability to easily manipulate data has certainly changed the landscape and it is possible to look at numbers 24 hours a day and still feel that there are stones left unturned–this can be seductive.
With all of the vendor and retail consolidation that has happened in the last several years, as well as the increase in offshore resources, there are fewer high-profile merchant positions available in the U.S. than before. Presumably, some have found a home in other industries, but there are still plenty of talented merchants working in retail.
My only comment: where a 17% sales increase came from, I neither know nor understand. I can only relate with that from my own experience with my local J. Crew. My entry into the store during this past Christmas shopping season found a store that was stark, missing any exciting merchandising, lacking in product and short on service. Maybe I am missing something here, but if that is innovation, I misunderstand the definition.
In contrast, my trips into two separate Eddie Bauer stores took me by pleasant surprise. While I don’t know their sales figures (I will need to find out), they won nearly all of my purchases for the season, from watches, to accessories, to clothing, fragrances, and even gift cards. This was all to a merchant that I had perceived as dead. In two separate stores, their merchandising was unique and their sales staff at both would rank as outstanding.
I am missing something here because I am hard pressed to imagine the environment that I saw at J. Crew being a breeding ground for talent. There is something happening there to achieve those numbers and I don’t discount the accomplishment, but I am hard pressed to understand the allure that would have driven the increase. More to learn….
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Unfortunately, in the recent past, I have worked with too many companies in which ‘the merchant’ doesn’t exist. The merchant is considered ‘the buyer’ and not someone who necessarily has a feel for the customer; only a shelf filler role.
Many of those who would have been considered for the more visionary position are outside of these companies and working as consultants. Hardly a way to really connect with the store and the merchandise. This is also a difficult way for organizations to grow new merchandising talent.
As an earlier respondent noted, we need both merchant and research people involved in retail, the old and the new professions, to help organization grow and maintain the strength they earn.
Retailer executives could look to the culture they have created within the organization. I believe that “zero tolerance” toward mistakes has become more and more prevalent. The reality behind being a merchant is that you will be “wrong” at least as often as you are “right.” The trick is how many of your chips were on the “right” ones. All too often, buyers today are afraid to be merchants. The cause lies in the corporate culture. To be a merchant means to interpret, to anticipate, and to be wrong.
I grew up in retail, as a buyer, in an organization that both encouraged risk taking as well as providing the support needed to balance those risks. The planning and control side of the company existed to assist the buyers in managing risk, not in preparing reports to identify “bad” buyers. In the event of disagreement between the planners and the buyers, senior seasoned executives made a decision one way or the other.
Is the talent out there? In part that depends on hiring and promotion policies and practices. If you’ve hired for entrepreneurial talents, then you have merchants waiting to be found. If you’ve hired for corporate assimilation talents, then it’s unlikely you have merchants waiting in the cubicles.
Overall, as a consultant, I see between 10 and 20 new business ideas a quarter. All of them show that creativity is alive and well. None of the idea generators would even think about working in a large retail environment. Telling, don’t you agree?
Consumer research is a great tool. But what defines “research”? Every retailer has “research results” every hour. Great merchants use that “research” as well as their instincts and experience to make decisions. Sometimes retailers use “classic” research (focus groups, surveys, etc.), too.
It would be interesting to see if Mickey Drexler could return to The Gap and turn it around. The Gap announced that the company might be for sale. Would it be better to just rehire Mr. Drexler?
We have talked about this subject here before, and I still maintain my view that innovation and creativity have been replaced, for the most part, by cold data.
Mr. Drexler is right. That old merchandising instinct is no longer encouraged, much less nurtured and taught by retailers. The vast majority of buyers have become analysts and the results are quite evident: me-too stores offering no compelling proposition to today’s customers starved for uniqueness and individuality.
I think there are really two questions to be answered here…
1) Do we need the art of merchandising to decide WHAT to buy? The answer is an unequivocal YES. Nothing will ever replace the “eye.”
2) Do we need the science of forecasting, allocation and replenishment (and real estate site selection for that matter) to help determine HOW MUCH and WHEN to buy along with WHERE to put stores? The answer to this question is also an unequivocal YES.
Regarding the question of whether Mr. Drexler could fix Gap: Gap has two problems…its signature style has been commoditized. Even their “skinny pants” marketing campaign did nothing to encourage buying specifically at Gap. And second, they have too many stores. I guess you call it an over-saturated market. I assume Mr. Drexler could fix the first problem; the second is trickier, depending on lease commitments.
At the end of the day, I mostly agree; look to the next generation merchant, who nurtures both left and right brained decision-making.
We ought not conclude that the ready availability of data actually means that the data is being used.
As just one of many examples, Thom Blischock was quoted in the January 2007 RIS NEWS that:
“I recently did a project in which I looked at 25 stores in the convenience food and snack section. The average number of SKUs for these stores in this section was 4,278.
Can you guess what percentage of those SKUs DID NOT SELL A SINGLE ITEM IN ANY OF THE STORES IN 30 WEEKS? (emphasis mine)
Astonishingly, it was 72 percent.”
It is more than useful as a merchant to “have a good gut.” It’s better to back up the good gut with probing analysis.
In fashion, there are a broad spectrum of products: some that require a great deal of intuition, creativity and trend awareness in the selection process (such as junior sportswear), and others that benefit more from ongoing analysis and slow evolution (such as men’s dress shirts). In between, are most mainstream products that have some degree of predictability, but also require some subjective risk-taking to be successful. Good merchants in most roles need to be both analytical and creative.
It is true that increase in the availability of and ability to easily manipulate data has certainly changed the landscape and it is possible to look at numbers 24 hours a day and still feel that there are stones left unturned–this can be seductive.
With all of the vendor and retail consolidation that has happened in the last several years, as well as the increase in offshore resources, there are fewer high-profile merchant positions available in the U.S. than before. Presumably, some have found a home in other industries, but there are still plenty of talented merchants working in retail.
My only comment: where a 17% sales increase came from, I neither know nor understand. I can only relate with that from my own experience with my local J. Crew. My entry into the store during this past Christmas shopping season found a store that was stark, missing any exciting merchandising, lacking in product and short on service. Maybe I am missing something here, but if that is innovation, I misunderstand the definition.
In contrast, my trips into two separate Eddie Bauer stores took me by pleasant surprise. While I don’t know their sales figures (I will need to find out), they won nearly all of my purchases for the season, from watches, to accessories, to clothing, fragrances, and even gift cards. This was all to a merchant that I had perceived as dead. In two separate stores, their merchandising was unique and their sales staff at both would rank as outstanding.
I am missing something here because I am hard pressed to imagine the environment that I saw at J. Crew being a breeding ground for talent. There is something happening there to achieve those numbers and I don’t discount the accomplishment, but I am hard pressed to understand the allure that would have driven the increase. More to learn….