Retail Bankruptcies

As Sports Authority knuckles under, I am taking pause to reflect on the 10 biggest Retail BK’s of all time, as written in this article from Fortune: Fortune Article Link

In order of assets at time of BK:
Circuit City, Linens & Things, General Atlantic & Pacific Tea (A&P),Radio Shack, Blockbuster, Borders, Sports Authority, Sbarro, Friedman’s, Brookstone.

Ruling out Sbarro, as it really is a restaurant chain and not a traditional retailer, and Friedman’s, which is a jewelry store that I am simply not familiar with,  what stands out to me is these were ALL very top or near-top of their category businesses at one point.

Circuit City was very similar to Best Buy in product and pricing. Linens&Things was sort of a small version of Bed Bath and Beyond (less Beyond, more Bed)
A&P was not just a large grocer: They had 16,000 stores in 1930– and were the largest retailer in the WORLD. (and 150+year history)
Radio Shack? Was a premier player in the PC market at the beginning- remember the TRS-80? Then you are old also. Founded in 1921, so managed to survive a few wars the Depression, and every other world-changing event for nearly a century.
Blockbuster didn’t invent the movie rental concept- but they certainly made it simple, accessible, and EVERYWHERE.
Borders? Put it next to a B&N and heck if I knew which was which.
Brookstone was the store that was FUN in the mall!

So what did these stores fail in while their rivals are still alive? Obviously a lot of reasons but the one that struck me as likely (in hindsight) was failing to adapt-or-die.
If Blockbuster had opened an online delivery, maybe they’d be Netflix.
If Radio Shack and Circuit City had figured out whatever it was that made Best Buy work, and opened enough online presence to compete with Amazon? Maybe a different story.
Radio Shack alone could have been a MONSTER- Introducing a home PC in 1977, for $600?  About the same time as that other computer maker startup, and that one turned out OK in the end.

What did B&N do better than Borders? I don’t know, but clearly neither did Borders.  I think they were both late to the online book situation, but obviously B&N survived. Adapted.

And A&P? Well that’s the scariest of all. How do you completely own a market and lose the entire company in a few decades?  Obviously competition changed.  The landscape changed.  Bad decisions must have been made.  But to have that kind of economy of scale and lose it is just a terrifying prospect for a lot of today’s market leaders.

If you don’t remember what got you there, it is hard to stay there, I think. 16,000 stores,  85 years ago.  That’s over 4000 more than Walmart has today. In 30 years, will a change in landscape not only over-through Walmart, but literally end them? Hard to fathom… but I bet A&P management in 1930 felt the same invincibility.

So today, lets all say a retail prayer for the staff of Sports Authority who likely lost a lot of jobs, and hope they can come through the other side leaner, smarter, stronger, and better able to compete. We are all retail brothers.
Note: Brookstone emerged from BK in 2014 and has continued operations, which is a joy for anyone who is at the mall and wants a chair massage!
Plan, execute, and analyze. Repeat.  And never stop. Never.

-That Planning Guy

Great Service

What makes for great service?  Yesterday I ranted about Starbucks… Today I went to my usual Starbucks and did my usual mobile order.   When I arrived,  one of the ladies saw me,  walked over and handed me my coffee  (with a green stopper thing !) “Here you go Steve”.  Super friendly smile and all.  And the coffee was exactly as I ordered,  of course. Mobile ordering is a godsend.
If that happened every day,  I would consider that GREAT service.
Is Good service,  delivered consistently,  the same as Great service?  I believe so. 
When we ‘deliver’ a report (flash for a manager,  sales by item for a stock host to replenish a floor,  WOS with orders needed already calculated to a buyer,  etc. ) and it comes as expected,  on time,  and accurate,  is that great service? 
If you miss a day,  or the service level drops for a day ( report server failure,  or no one made my coffee! )  the exception makes for bad service. 
So the reverse must be true. 
Be great,  but be great EVERY DAY.

-THAT Planning Guy

Replenishment Failure

My Starbucks ran out of stoppers this morning.  The stupid green stick that keeps my coffee from spilling all over my car.  Wow.
Is it hard to keep in stock of an item that you give away?
Demand= cups X ratio,  where cups = sales fcst X (% hot beverages to sales)
Ratio = average #stoppers given/cups used. 
If you know the sales fcst,  which I bet they do as they likely use for labor fcst  the rest is MATH:
Assume sales is 100, 000 for a month.   (no idea,  made that up)
70% are hot beverages with a price of 4.00. Half of people ask for stoppers.
Demand =((100000 X 70%) /4. 00) X  1/3.  =8750 stoppers needed.   Build in some safety stock to account for lead times.

Now I have to clean coffee off my car seat because someone failed at replenishment.
@starbucks – no charge for this demand forecast lesson. 

-THAT Planning Guy


Building a relationship takes a huge amount of time and effort no matter what part of your life.  Girlfriend,  wife,  child,  friend are all difficult enough to manage. 
Work relationships are also a challenge.   NO,  not the Demi Moore “Disclosure” kind of issues… The productive work relationship,  especially from a Planner. 
In Maslow’s Hierarchy of Needs,  you move up from Physiological  through love eventually to self actualization. 
Planning relationships go from:
KNOW : I know that person. Email relationship or phone call.
LIKE: yeah,  she always gives me reports and important data.
UNDERSTAND: I see your perspective and know why you think I need to markdown,  or order less. But I may not AGREE or execute.
TRUST: I believe you.  I will cut receipts and it won’t effect sales.

When you reach the level of trust,  the partnership can flourish.  Until then,  it’s generally one sided.  

How do we get there?  That’s another article entirely.
To be continued…

-THAT Planning Guy

Time in the day

If you don’t plan your time,  someone else will. 
This old adage is certainly true for Data people (I like that phrase to cover everyone from analyst to planner,  allocater, Data Scientists,  whatever your taste  may be)
If you leave time ‘open’  someone else will fill it with things they need.  
Is this the best use of time?  Whose priority is more important to accomplish?  If it’s  not your priority,  why are you spending your time?
Time is not replenishable.

Disney Dynamic Pricing?

If anyone hasn’t heard yet, the new Disney pricing strategy started today. I have to say I am shocked more people haven’t been shocked by this. imagine, pricing being reflective of demand? Who’s next, airlines, hotels, movie theaters?  All already doing. Restaurants? Do you think the lunch portion is REALLY that different?

The questions is, who isn’t doing some degree of dynamic pricing.  Everyone should.    Demand, in its simplest, is what a customer will pay.

Applaud their innovation.
Forbes article here: LINK

Predictive vs Prescriptive Analytics

A lot of people read the article I had in RIS news last year. If not, HERE:

(Link updated, 2018!)

I wanted to talk a little further about the idea of prescriptive analytics. As a few people know, I like to bet sports. REALLY like to. (Yeah, I live in Nevada, so its legal. Don’t judge. )

If you’re really good at what you do, then you are willing to put your money where your math is. So this football season, I built a NFL betting modeling system. Without telling too much details, as that may be a whole different story line later, it was a fun experiment.

First, gather the data: Build the history. Data without enough enough data points is too inconclusive. In week 6, I added in the predictive engine, and started picking bets. All told, against the spread for the year, I was +7%. Many lessons learned, many theories tested, but suffice to say I was pretty happy by the end of the season as I picked more winners than losers. Many things came clearly into the light – visualization. How often to use teasers, how often to pick Over/Under. But my best lesson was that the people (Customers? Guests? Shoppers? Apply your own business here) are willing to overpay for a favorite. The Panthers were an exception, and very predictable. But most other ‘favorite’ picks were overpriced. Hmmm. As I believe I understand the concept of para-mutual, and how sports betting is a balance of money, so I cant blame the house for rigging the system: Blame the consumers.

Point? Predictive analytics was effective. However, where I didn’t end up with a new car, new house, lovely beach condo on Maui was in the prescriptive piece. I need to refine this to tell me what actions to take based on the prediction. Yeah, the Pats covered a lot – but whats the bet amount? Planning the actions is what separates a moral win from a real win.
Analytics drives business.

PS- Dead wrong on Superbowl. What makes analyics awesome? Its not perfect. If it was, this would be boring. The best model wins the most, but not all. Betamax was great technology. Creative Lab’s MP3 player was awesome in 2000. And we all know how that ended up.

-THAT Planning Guy

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The 2016 PRI Digital Retail Forum: How In-store Technology is Redefining Retail takes place from 9 a.m. – 5 p.m. on March 15, the day before the Digital Signage Expo trade show opens at the Las Vegas Convention Center.

PRI’s all-new Digital Retail Forum will focus on how changing consumer shopping preferences are causing retailers to transform the way they do business. Much of this change is supported by customer-facing technologies, from digital signs and equipping employees with smart phones and tablets, to those that are required to support an omni-channel business model. Opportunities increase through the use of Wi-Fi to understand customer behavior and RFID tags to locate merchandise, as well as the growth of big data analytics