10. You’re an avid reader. There are some books that you re-read periodically. What are those books? Also, what are you reading now? Why?
I try to read the Bible every day. It is important to spend some time with God on a daily basis; it helps me to keep the correct perspective and gives me a sense of joy and peace.
Business books that I have read more than once:
a. The 80/20 Principle by Richard Koch – This book, if you apply it, will change how you look at life and allow you to get more out of it!
b. Good to Great by Jim Collins – If you go through this book with your management team and apply the principles, your business and results will improve!
c. The One Minute Manager by Ken Blanchard – Helps to get everyone in the organization in alignment and on the right track.
Right now I am reading “Made to Stick” by Chip and Dan Heath – Explains why some ideas stick and others don’t, and helps to make your own ideas stick.
I recently read “The River of Doubt” by Candice Millard – The true story of Theodore Roosevelt’s expedition in South America. The story is so amazing that, when Roosevelt returned to tell it, people did not believe him! He was telling the truth, of course.
11. The majority of subscribers and readers of The Ad Guy @ Arnold Creative blog are retail marketers; some on the client/retailer side and some on the agency side. Take this opportunity to speak directly to them. As a CEO, what can a channel partner do to establish and reinforce their value to you? What, besides the basics, do you expect of the service providers you partner with?
Channel partners should all be focused on the success of their partners! When working with people that are true partners, there should be a constant conversation of: “How’s business?”
“What can we be doing better?” “I heard of a great new idea you should try”. A true partner should be a constant source of honest feedback, helpful ideas, and encouragement. These types of partners are few and far between.
In the jewelry industry, Hearts on Fire Company is a true partner. They offer excellent sales training that will increase sales in all departments, are constantly asking for feedback, and have forums where jewelers can share best practices. HOF is a true partner.
Thursday, May 29, 2008
Monday, May 26, 2008
Arnold Interview Part 3
7. In your experience, how do you elevate a “rank and file” employee to the level of “brand ambassador/brand evangelist?” Why do you feel retailers miss the boat?
Once again it goes back to having a clear vision for the company that is effectively communicated through every part of the organization. I believe that job descriptions should be tied into the vision of the company, so it is clear to the employee how their job effects the execution of the company vision.
Once people understand how their performance affects the customer experience, they are motivated to execute the vision, and achieve the performance goals set before them.
Most specialty retailers don’t have clearly communicated visions and goals, and many don’t even have written job descriptions.
8. Describe a time when you took an active role in the career growth of an employee or group of employees. What did you do to try and improve their effectiveness and morale?
A few years ago I was put in charge of the team in the corporate office. After meeting with the group a few times, it became clear that they did not have a clear understanding of the impact their work had on the company. The feeling among the group was that they were the “forgotten” employees. I initiated a series of meetings where they could voice their opinions and ideas, which set the stage for helping them to understand how important their work is (and that I saw the importance of it!). Once again it goes back to the “vision thing”; helping people understand the vision of the company and how their work helps the vision become a reality.
When the vision and their roles became clear to the team, we were then able to set performance goals for each position and inspire each other to reach them.
I also implemented some special perks for this team; the sales team is constantly getting perks and goals to shoot for, and I wanted to do the same for the corporate office.
9. Describe a leader you admire the most?
The leaders I admire are people who achieve success without losing their core convictions. Ronald Reagan is probably on top of my list; his optimism and dedication to his core beliefs never wavered.
Once again it goes back to having a clear vision for the company that is effectively communicated through every part of the organization. I believe that job descriptions should be tied into the vision of the company, so it is clear to the employee how their job effects the execution of the company vision.
Once people understand how their performance affects the customer experience, they are motivated to execute the vision, and achieve the performance goals set before them.
Most specialty retailers don’t have clearly communicated visions and goals, and many don’t even have written job descriptions.
8. Describe a time when you took an active role in the career growth of an employee or group of employees. What did you do to try and improve their effectiveness and morale?
A few years ago I was put in charge of the team in the corporate office. After meeting with the group a few times, it became clear that they did not have a clear understanding of the impact their work had on the company. The feeling among the group was that they were the “forgotten” employees. I initiated a series of meetings where they could voice their opinions and ideas, which set the stage for helping them to understand how important their work is (and that I saw the importance of it!). Once again it goes back to the “vision thing”; helping people understand the vision of the company and how their work helps the vision become a reality.
When the vision and their roles became clear to the team, we were then able to set performance goals for each position and inspire each other to reach them.
I also implemented some special perks for this team; the sales team is constantly getting perks and goals to shoot for, and I wanted to do the same for the corporate office.
9. Describe a leader you admire the most?
The leaders I admire are people who achieve success without losing their core convictions. Ronald Reagan is probably on top of my list; his optimism and dedication to his core beliefs never wavered.
Thursday, May 22, 2008
.... Ryan Arnold Interview (cont.)
4. In your most recent role as CEO of an independent jewelry chain in Chicago, you recognized the threat of out of market competition was imminent. You chose to use this as an opportunity to redefine the brand and streamline the internal processes. Describe what the business “looked like” when you began this process.
The business had evolved quite a bit since it was founding in 1964 as a rare coin and estate buying business. In the ‘80’s the business grew very quickly and went through several transformations.
In the early part of this decade, I took the management team through a self discovery process. We needed to figure out what we were passionate about, and what we do better than anyone else in our market.
Through this process the team realized that the passion was to “help people celebrate life’s special moments” and that what we sold were “symbols of love and success”. Once this was accomplished, we could look at the day to day things we were involved in and start stripping away the things that did not fit with our vision. One example is that we closed the coin department in three of our locations.
5. What was the biggest and/or scariest risk you made when starting this process?
The biggest change we made was closing two underperforming stores and opening two new stores within a 12 month period. The two locations that were closed were in areas that were good for estate buying (the old business model) and moved to areas that were better suited for luxury retail.
6. In all your years as a retail executive, what do you consider your finest achievement?
Executing the strategy listed above during a difficult economic time, funding the projects solely from the proceeds of store closing sales.
The business had evolved quite a bit since it was founding in 1964 as a rare coin and estate buying business. In the ‘80’s the business grew very quickly and went through several transformations.
In the early part of this decade, I took the management team through a self discovery process. We needed to figure out what we were passionate about, and what we do better than anyone else in our market.
Through this process the team realized that the passion was to “help people celebrate life’s special moments” and that what we sold were “symbols of love and success”. Once this was accomplished, we could look at the day to day things we were involved in and start stripping away the things that did not fit with our vision. One example is that we closed the coin department in three of our locations.
5. What was the biggest and/or scariest risk you made when starting this process?
The biggest change we made was closing two underperforming stores and opening two new stores within a 12 month period. The two locations that were closed were in areas that were good for estate buying (the old business model) and moved to areas that were better suited for luxury retail.
6. In all your years as a retail executive, what do you consider your finest achievement?
Executing the strategy listed above during a difficult economic time, funding the projects solely from the proceeds of store closing sales.
Tuesday, May 20, 2008
Excerpts of Ryan Arnold Interview (part 1)
1. Retailers from all over the country seek your counsel and you’re paid very well for your advice. Without giving away any trade secrets what steps do you recommend retailers take to remain competitive and guarantee they do not take lose market share to competitors?
Retailers need to remain very focused, always keeping in mind what their unique selling proposition is. The mass retailers are getting stronger, and the only way for specialty stores to survive is to serve the niche that they are strong in, and to keep aware of any threats to the niche.
As an example, Sharper Image’s niche was selling interesting gadgets for men. One of their biggest products was their air filter; at one time it represented 40% of their sales. When sales of this product started to decline, they failed to update it or replace it. Best Buy and Apple have replaced Sharper Image in this category.
2. The current retail climate stinks like Bourbon Street after Mardi gras. It’s forced some retailers to act a bit more shrewdly; taking business they may have otherwise turned away in better economic times. What are your thoughts on the benefits and potential pitfalls of changing your strategy? Is it possible to stray too far from your original business strategy that you can’t recover?
You need to have a clear vision of who you are and what makes you unique in the marketplace. In “Good to Great” Jim Collins talks about the “Hedgehog Concept”, which is figuring out what you can be the best in the world (or your market) at. Once you figure this out, you need to base all of your decisions on whether or not they are in alignment with your Hedgehog Concept.
If your strategy stops working, you need to look at your business in the context of the market and figure out what has changed. Things are always changing, businesses need to be constantly improving and becoming more efficient.
3. The New York Times recently wrote of the steady decline in luxury goods sales: “More than 1,000 respondents said that online advertising was the most influential in encouraging luxury goods purchase. Of the premium luxury consumers, 72 per cent purchased goods as a result of seeing an Internet advert, followed closely by magazines (70 per cent) and television (62 per cent), emphasizing the need for further integration in luxury goods campaigns.” How do you reply to that?
The Internet needs to be part of any specialty retailers marketing plan. This can be implemented in many ways: ad words, banners, websites, blogs, and eBay. The new wave of social networking sites will have a profound impact on retail; how to utilize these sites is the $100,000 question!
Retailers need to remain very focused, always keeping in mind what their unique selling proposition is. The mass retailers are getting stronger, and the only way for specialty stores to survive is to serve the niche that they are strong in, and to keep aware of any threats to the niche.
As an example, Sharper Image’s niche was selling interesting gadgets for men. One of their biggest products was their air filter; at one time it represented 40% of their sales. When sales of this product started to decline, they failed to update it or replace it. Best Buy and Apple have replaced Sharper Image in this category.
2. The current retail climate stinks like Bourbon Street after Mardi gras. It’s forced some retailers to act a bit more shrewdly; taking business they may have otherwise turned away in better economic times. What are your thoughts on the benefits and potential pitfalls of changing your strategy? Is it possible to stray too far from your original business strategy that you can’t recover?
You need to have a clear vision of who you are and what makes you unique in the marketplace. In “Good to Great” Jim Collins talks about the “Hedgehog Concept”, which is figuring out what you can be the best in the world (or your market) at. Once you figure this out, you need to base all of your decisions on whether or not they are in alignment with your Hedgehog Concept.
If your strategy stops working, you need to look at your business in the context of the market and figure out what has changed. Things are always changing, businesses need to be constantly improving and becoming more efficient.
3. The New York Times recently wrote of the steady decline in luxury goods sales: “More than 1,000 respondents said that online advertising was the most influential in encouraging luxury goods purchase. Of the premium luxury consumers, 72 per cent purchased goods as a result of seeing an Internet advert, followed closely by magazines (70 per cent) and television (62 per cent), emphasizing the need for further integration in luxury goods campaigns.” How do you reply to that?
The Internet needs to be part of any specialty retailers marketing plan. This can be implemented in many ways: ad words, banners, websites, blogs, and eBay. The new wave of social networking sites will have a profound impact on retail; how to utilize these sites is the $100,000 question!
Wednesday, May 14, 2008
Move out the Dead!
This year has been a real grind for most retailers, and cash flow has been a real struggle. One of the best levers to pull when trying to deal with cash flow issues is to concentrate on selling dead inventory.
Many jewelers have a real love for their old inventory, and seem to have a blind spot when it comes to understanding the large cost of carrying old merchandise. These jewelers worry about discounting the dead stuff too much, or have the false notion that it keeps going up in value. Business Research Services of Seattle estimates the cost of carrying inventory can be as much as 25% per year. Included in these costs are shrinkage, insurance, labor (cleaning, physical inventory, tagging etc.). If this statistic is correct, then a piece of inventory that cost you $100 last year ate up $25 in additional capital over the year.
David Geller, in one of his seminars, offered up this example of how to look at dead merchandise.
Compare two inventory items, bot of which cost $100 and retail for $200. One item does not sell, the other sells 3 times during a one year period. Each item costs $100, but the item that sold generated $300 in profit.
The item that did not sell, has an opportunity cost associated with it. It may have cost you $25 to carry it for the year, but you could have also invested that original cost into an item that generated $300 in profit. So what did it really cost? The simple answer is: a lot!
Items that are dead should be moved out at any cost! If you move out a truly dead piece at 75% of cost, you will quickly make up the loss if you replace it with a fast mover. Or, more to the point, it is not costing you anything to hold it any longer, and most of us have too much inventory anyway!
So, move out the dead!
Many jewelers have a real love for their old inventory, and seem to have a blind spot when it comes to understanding the large cost of carrying old merchandise. These jewelers worry about discounting the dead stuff too much, or have the false notion that it keeps going up in value. Business Research Services of Seattle estimates the cost of carrying inventory can be as much as 25% per year. Included in these costs are shrinkage, insurance, labor (cleaning, physical inventory, tagging etc.). If this statistic is correct, then a piece of inventory that cost you $100 last year ate up $25 in additional capital over the year.
David Geller, in one of his seminars, offered up this example of how to look at dead merchandise.
Compare two inventory items, bot of which cost $100 and retail for $200. One item does not sell, the other sells 3 times during a one year period. Each item costs $100, but the item that sold generated $300 in profit.
The item that did not sell, has an opportunity cost associated with it. It may have cost you $25 to carry it for the year, but you could have also invested that original cost into an item that generated $300 in profit. So what did it really cost? The simple answer is: a lot!
Items that are dead should be moved out at any cost! If you move out a truly dead piece at 75% of cost, you will quickly make up the loss if you replace it with a fast mover. Or, more to the point, it is not costing you anything to hold it any longer, and most of us have too much inventory anyway!
So, move out the dead!
Subscribe to:
Posts (Atom)
