“Merchandise” is still the most important part of the e-quation

By Larry Robertson, CEO | Partners

Feb 05

Most retail pundits assume victory in the chain wars will be determined by e-com apps and delivery speed. Making that consumer-to-product connection in the fewest number of keystrokes may be the holy grail of retail tech, but often absent in this conversation is any mention of “merchandise.”

So how did this happen? How did merchandise end up taking a backseat to the “process”?

The “general store” has certainly come a long way since the salt-flour-and-gunpowder days but the underlying cause of the industry’s “e-OCD” may be the assumption that all mass-market retailers sell essentially the same merchandise. That is not true but such a high degree of sameness still looms over the industry that consumers instinctively reach for their electronic device or head off to specialty stores to begin their shopping ritual.

It seems ironic that the same large discount chains that once devoured the boutique retail industry, is in many ways responsible for its trending resurgence – albeit this time as a much more formidable opponent. In the digital age, “speed” triumphs over “size” much in the way a judo master uses his opponent’s weight as a weapon.

As with other market disruptions, innovation-focused merchandising in brick & mortar, offers an enormous market advantage for the early adopters – while posing an ominous challenge for everyone else.

This current industry dynamic was summed up over a decade ago in the title of a book by Jason Jennings and Laurence Haughton; “It’s not the BIG that eat the SMALL… it’s the FAST that eat the SLOW.”

I am certainly not trying to downplay the importance of e-com technology. It is vitally important and becoming more so every day, but exclusive fixation on the consumer-to-product “process,” seems dangerously analogous to a restaurant earmarking its entire capital improvement budget for expediting the plates to the table, while overlooking the role of the “food”.

In the restaurant scenario, serving better food than the guy next door is vital, but in retail, “every” competitor is virtually “next-door” so your merchandise mix had better include a few things the other guys’ doesn’t.

About the Author

Larry is the CEO and co-founder of AON Invent. He has enjoyed a career that has spanned sales, marketing, and product innovation for companies that include subsidiaries of AMR/American Airlines, Learjet and Sam's Club. In 1995 he teamed up with Ron Loveless, the founding CEO of Sam's Club, to launch a marketing and product development firm that grossed $500 million in its first 3 years. Over the past 20+ years, Larry has personally vetted over 1,000 product concepts and marketing strategies.