MULTICHANNEL
THE MERCHANT’S LAMENT AND LEGACY – 2022
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If you are a long-time reader, you know I believe the most important part of any catalogue or eCommerce company’s business is its merchandise. Sadly, merchants never get the credit they deserve for the role they play in keeping the company afloat.
Product development is hard work. Good product development is exhausting and never ending. Tough the skills of a marketer may have changed and shifted from their ability to read a source code report to creating videos on YouTube, for merchants in a digital age, new product success is not a matter of new selling techniques. It still requires hard work studying your customers’ behaviour (sales analysis /product reviews /customer surveys), assessing your vendors’ unique capabilities, and presenting solutions to your customer’s hopes, fears, or aspirations.
Developing good selling exclusive products is not “shopping” trade shows. Anyone can be a shopper. Te merchant’s job is to understand your business and guide your customers to discover new solutions they never thought existed. Tis applies to all product classes – apparel, gifts, home furnishings, and hard goods.
What I just described in the above two paragraphs is pretty much a textbook explanation of what a merchant should do. However, now you need to add on the extra layers of complexity brought
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BY BILL LAPIERRE, DATAMANN USA
on by global sourcing, Amazon, the ubiquity of products on the internet, embargos, inflation, and supply chain issues. You would think that mastering all those conflicting issues would make the merchant a hero, or at least omnipotent. But there is a silent stalker always lurking below the surface – gross margin.
Upper management looks at all the costs that go into running a company and the cost of goods sold is always right on top. Plus, many in upper management – none of whom are as intimate with the nuances of the products as the merchant that developed them – always think they know what’s best when it comes to pricing. Tis becomes the merchant’s lament.
Good selling products are usually very competitive, requiring aggressive pricing. But to upper management, brand new exclusive products have the allure of price “blindness”, meaning the consumer doesn’t yet have an idea in their mind what the product is worth. Consequently, management loves to over-price these new products to improve the overall margin of the mix.
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