I attended the University of Massachusetts during the ascent of the basketball program headed by John Calipari, now coach of the University of Memphis Tigers. While I graduated too early to be present for the Marcus Camby-led team that made it to the Final Four-whether the NCAA wants to recognize the achievement or not-I was still able to see firsthand how Coach Cal built a winning team based on concepts such as “Refuse to Lose” and playing “any team, any time, anywhere.”
However, Coach Cal had one serious blind spot: He didn’t think it was necessary to devote significant time to practicing free throws. His philosophy was that a player at the Division I collegiate level should know how to sink an unguarded shot a mere 15 feet from the basket. As a result, Calipari-led teams have consistently featured low free-throw percentages.
This trait was on full display during the NCAA tournament finals April 7, when a missed Memphis free throw at the end of the game gave Kansas University a chance to tie the game with a truly spectacular last-second three-point shot by guard Mario Chalmers, and then go on to win in overtime.
Taking nothing away from the heroics of Chalmers, if Coach Cal had better prepared his team to make free throws, right now they could be the reigning college basketball champs.
Many SMRs (small to midsize retailers) have a similar blind spot. They build successful enterprises by refusing to lose to more established competitors and taking on big chains on their own turf. However, they all too frequently ignore the opportunity to improve their performance in routine merchandising tasks, or the “free throws” of the industry.
For example, a few years back I had lunch with a high-level executive at a small, family-owned specialty clothing chain with five or six locations in Massachusetts. This retailer had found a niche and successfully competed against larger specialty chains for three generations. I asked the executive, whose grandfather had founded the business, if he had ever considered implementing a markdown optimization system.
He cocked his head and looked at me like I had suggested opening an outlet on Mars.
“What’s the point of doing that?” he asked. “If something doesn’t sell, I mark it down. If it still doesn’t sell, I mark it down more.”
A Balance Is Needed
In theory, this viewpoint makes perfect sense. Surely a retail professional raised in a retail family, who works in a hands-on, entrepreneurial environment, can figure out something as basic as when to mark down a price. As if he wouldn’t know when something wasn’t selling at a certain price. In a previous column, I even exhorted retailers to not rely too much on merchandising systems, but to let common sense and human knowledge prevail.
I still stand by that column, and also understand why this particular gentleman, and so many other executives at SMRs, feels that investing in advanced merchandising systems is unnecessary. But like so many other things in life, effective merchandising requires a balance.
Granted, no machine can replace human instinct and wisdom, but a machine can supplement human instinct and wisdom, and enhance the performance results of that instinct and wisdom. An experienced retail executive has a good sense of when a particular product isn’t selling, and can probably figure out why.
However, with a sophisticated merchandising system, that executive can gain visibility into likely sales problems well before they happen. They can make a better pricing decision, or shelving decision, or any other merchandising decision you want to name, the first time out, and thus avoid having to use their instincts to figure out why a certain item isn’t moving.
Like free lunches, free throws aren’t really free. Proper execution of free throws requires a great deal of investment, not in money for college hoops players, but in time and effort spent practicing. And at crunch time, free throws can make or break a championship. Just ask Coach Cal.
Dan Berthiaume covers the retail space for eWEEK. For more industry news, check out eWEEK.com’s Retail Site.