Are you allowing vendors to send you items that are not performing well? In a perfect world, there would be no out-of-stocks or need for substitute items. Retailers would get 100 per cent fill rates on all orders placed. However, that is just not the case and routinely vendors substitute items. Do you track vendor fill rates? Just as important . . . do you track the performance of the items that are shipped to you in substitute for the items you initially ordered? Do these substitute items perform as well as the items you initially selected and ordered?
In today’s dynamic jewelry industry managers need to diligently and perpetually attempt to improve assortment planning. The rewards can range from immediately increasing full price sales, elevating shopper in-store experiences, and improving gross margin return on investment. Jewelers who research their markets and become keenly aware of their customers’ luxury fashion desires and jewelry demands are more capable of executing product buys that more closely reflect what their customers will want to purchase.
So let’s talk about the product you did not order, but were sent to you in substitute for what you really wanted. Have you ever tracked substitute items to see how well they perform in comparison to the products you actually ordered? Consider doing a study to check the fill rate by vendor and track those substituted items to see how well they sell verses the products you actually ordered. In some cases, you might be pleasantly surprised and find some items outperformed some of the products you actually ordered. However, I suspect that there will be items that are used by vendors to fill orders that may not perform as well as those that you selected based on your own expertise of your marketplace and customers. Unfortunately, there are only so many “hot sellers” to go around.
Having worked for manufacturers, I understand the need to substitute items. I also understand how easy it can become for manufacturers to get a bit too dependent on the use of substitute items to fill out total order quantities. Here are a few questions to consider. Do substitute items provide as strong of full price sell through as the items you initially order? Do substitute items increase your stock level through reduced stock turnover? Do substitute items eventually require more reductions to sell?
Do some homework and find out if in fact substitute items are as productive as the items you specifically order? Find out what the fill rate is for each of your vendors and which vendors are more prone to substitute items. Understand which vendors are really helping you build your business and if you need to make any changes. It is your business. Shouldn’t you get the products you order . . . the products you know your customers will want to buy?Follow JCK on Instagram: @jckmagazine
Follow JCK on Twitter: @jckmagazine
Follow JCK on Facebook: @jckmagazine