Archive for the ‘Retail Merchandising’ Category

Minneapolis Pays for Creating its Own Retail Monster

Friday, March 24th, 2017

Minneapolis SkylineI should have known better on a sunny day in Chicago on the Magnificant Mile. I know how retailers do it: they suck you in with air conditioning, new products, a half-off clearance sign and before you know it, you’ve parted with $300. Even as a retail and merchandising expert, it still happens to me. Except in Minneapolis.

It’s hard to believe that City leaders knew what the outcome would be when Bloomington opened the Mall of America on August 11, 1992. At the time, MOA was supposed to have everything a city center should contain: retail, restaurants, an aquarium, a wedding chapel,  Knott’s Camp Snoopy, night clubs (there was even talk of the Jacksons investing in a nightclub – those Jacksons: Janet, Michael, Tito…) Bloomington was looking for a way to offset the draw that the Met Stadium once was and came upon a whale of an idea: Mall of America. A site to see. Easy access from the airport. And 25 years later, it looks like they placed their bets correctly. On any given day the visitors of Mall of America makes it Minnesota’s third largest city.

Which leaves us with the Minneapolis and its *Block E*Nicollet Mall*What are we going to do with Downtown*Now Macys has closed* dilemma.

When a city is planning for a thriving downtown center there are several key foundations that a downtown can count on to keep the center vibrant:

  • Entertainment venues to draw folks in. Your sports team stadiums, theaters, and concert venues. Minneapolis grade? A. Not just because of the new Vikings and Twins stadiums but Guthrie, Cowles and the State/Ordway/Pantages triple threat.
  • Restaurants and bars – even strip clubs – to extend events and keep dollars downtown. Minneapolis grade? B. if you include Uptown and Northeast.
  • Education Centers – get ’em while their young and they may want to stay. Draw in out-of-staters and access to a fresh stream of low-wage workers. Minneapolis grade? A
  • Business Headquarters and a thriving business community. Minneapolis grade? B. Not bad for most midwest cities. But how it let Richfield get Best Buy is still a head scratcher.
  • Retail – it’s what keeps the city alive on Saturdays and Sundays. With the right drawing cards, it can add a tremendous tax base and jobs to a city center. Minneapolis grade? F. Seriously: F.  Here’s why:

The population of Minneapolis is not large enough to support two flagship stores of any retail brand. When Nordstrom, Armani Exchange, Victorinox, BCBGMaxMara and others look at their retail portfolio they know they can only support one store in the Minneapolis area. In Chicago, that’s going to be the Magnificent Mile. In Minneapolis, that will be in the Mall of America or Edina’s Galleria which are the two upscale malls in the Twin Cities. Stores that have tried to make a go of it in our lifeless downtown have struggled. Ralph Lauren Polo tried until July 2007 and Neiman Marcus closed in Gaviidae.

So Minneapolis is stuck with taking the retail left overs: the Nordstrom Rack, Len Druskin, Marshalls and other off-price retailers that fill space but do not get people to come into the city to shop.

There is a way out. But it will require a new way of looking at a retail-Minneapolis alliance. MOA can never be a mecca for LOCAL retail. The rent is too high. But if Minneapolis had the vision, it could create a retail corridor of local, pop-up and experimental locations as a draw.

  • Create a streamlined way for online retailers to create pop-ups
  • Create a revolving location that allows retailers to prototype and test retail concepts with a live customer base
  • Make marquee local retailers the anchors with permanent locations at cut-rate rents
  • Create a business district brand that markets and creates buzz for those who shop local as THE premiere destination in the city.

There are ways to get this done. But as long as the City of Minneapolis continues to allow landlords to guide the “vision” of the downtown shopping district, we will continue to have struggling locations, closed stores and a stream of people headed to Bloomington to shop.


Flora Delaney Featured in June Entrepreneur Magazine

Saturday, June 20th, 2015
Image credit: Jan Vašek |

Image credit: Jan Vašek |

When writer Michael Bellicove wanted to help his readers understand whether a high tech loyalty system is right for their business, he turned to Flora Delaney. His article helped Entrepreneur magazine readers learn how to be successful and what foundational pieces need to be in place before investing in expensive loyalty programs.

When your business needs levelheaded advice, contact Delaney Consulting. We create clarity.

The Benefits of a Simple Yearly Promotional Calendar

Thursday, May 7th, 2015

CalendarIt is a surprising fact that most retailers and small businesses do not have an annual promotional calendar. There’s a vague sense that they may have a number of promotional offers available to customers through a previous email campaign or a bounce back coupon printed on a receipt, but very few take the time to create a twelve-month promotional plan. A well thought out and executed promotional plan has many benefits:

  • It creates a limited time offer for customers to give them a call to action. (That’s marketing speak for make a purchase.)
  • It can be the foundation of arrangements with vendors to secure better deals or terms.
  • It creates excitement in your store.
  • It provides fuel to your social media and advertising.
  • It can drive specific customer behavior that leads to larger transactions and more loyalty.

A twelve-month promotional plan is as simple as a spreadsheet with months across the top and your marketing and sales actions along the left. If this is your first foray into creating limited-time promotions, consider creating six promotions that are two months each. For each month, create a promotion that is meant to drive a specific outcome. Typical goals would include acquiring new B2B customers, acquiring new B2C customers, (See our post “The Most Basic 2-Tiered Marketing Plan for Businesses”) increasing the number of transactions, rewarding high-value customers with preferred deals, building a stronger community network or donating to charity. Some promotions may accomplish more than one goal, but typically a promotion is meant to drive one primary customer behavior.

We regularly work with businesses who begin believing that a promotional plan will be inflexible and difficult to maintain. Truth is, it provides enormous benefits to every part of the organization and can save marketing money over the year. Contact us today and let us show you how.

Consider including some promotional “safeguards” in your annual plan. These can be last-minute optional offers that you can use if needed to reach your sales goals. Examples include one day flash sale offers that you can activate the last week of the month if sales are slow. Email blasts and social media “fan only” offers can be activated in one day. Other ideas include secondary and tertiary offers targeted at a very specific segment.

An annual calendar can be a foundation to begin negotiations with key vendors. Find out what they would be willing to do to support a specific promotion. Find market niches that your vendors want to penetrate and ask for price rebates or other offers to help you target the same niche. If a vendor has a goal of increasing sales of a new product line or brand and find out what they would be willing to do (underwrite a direct mail brochure, pay for an in-store display, split the cost of a newspaper ad) to help you create a promotion featuring those cartridges.

A promotion calendar can help you strategically think about your business and how to achieve your goals. Setting up a calendar makes it easier to involve other people to help you achieve your goals. A calendar can help you track and learn what are effective and ineffective marketing investments. A calendar can help you stay focused and give your daily activity purpose.

Remember: There’s activity and there’s productivity. Don’t confuse the two.

Why Category Definition is Critical

Tuesday, August 5th, 2014

Screen Shot 2014-03-06 at 2.31.25 PMFor retailers who follow a structured category management review, the first step is defining the category. The idea of defining a category each year may seem obvious – even redundant year after year.  But the truth is that customers’ tastes and habits change. A review of trends and changing customer behavior can catch newly emerging opportunities so that retailers and vendors can capitalize on new understandings.  For example, a retailer who habitually reviewed away from home beverage consumption as carbonated beverages versus bottled water could overlook the trend for aseptic packaged milk product consumption and water flavor additives.

The implications can transform a retail store depending on whether its management defines their category as DVD Movies or At-Home Entertainment.  In one situation, they are locked into optimizing the DVD category alone.  In the second, they can evaluate Gaming, Cable Television, Satellite Television, even bar ware!  Defining a category is all about drawing boundaries in the same way your customer does.  So, a customer will ask their family “Which DVD should we watch tonight?” less frequently than they will say “What shall we do tonight?”  Consider the differences in these category definitions: Glues and Paints versus Crafting Supplies, Water Fountains versus Water Features, Party Invitations versus Party Supplies. What should come to mind are the changes in product selection and merchandising in the store that will better anticipate customer needs for these categories.

Category definition needs to be grounded in customer insights that are gained from several sources: affinity purchases uncovered through data mining market basket transactions, primary customer observational research and self-reported customer behavior.  Frankly, affinity analyses can be misleading if retailers do not carry a wide enough breadth of product to be a full solution.  For example, if a limited assortment grocer did an affinity analysis on birthday cakes, it may discover that the customers also purchased ice cream, paper plates and candles.  It could, however, overlook that customers purchased the remainder of their needs (wrapping paper, cards, balloons and invitations) elsewhere.  Primary customer observational research is expensive and time consuming.  Self-reported customer behavior is notoriously inaccurate.

For most retailers, the most cost effective way to discover unbiased customer insights is to review the customer research of their top vendors along with customer research from emerging niche vendors. Niche vendors are usually the first to recognize and exploit new customer patterns. Established vendors less routinely recognize changes in behavior. Their focus on current product lines and customer segments can create blind spots.  Take, for example, the difference between established home cleaning mega-vendors and environmentally-focused cleaning vendors like Mrs. Myers and Seventh Generation in recognizing the growing demand for less chemically-intensive home cleaning products.

For retailers trying to glimpse the future and create a compelling selection that will meet the needs of future customer demand, actively sussing out customer and shopper trends through every resource available is an ongoing endeavor.

Category Management Planning

Friday, March 14th, 2014

candy rackMost forward-thinking retailers use some form of category management to evaluate assortments, make sales and promotion plans and execute those plans to achieve sales. This cycle usually occurs once a year – but it can be more or less frequent depending on the category’s volatility. The category plan reviews past plans and research, vendor input into future customer trends and forecasts, supply chain and financial input to verify true costs and concerns and incorporating the best investment tactics for the retailer to meet its stated financial and customer objectives. Most retailers have a framework or template for these category plans that help the top merchandising executives make trade offs and decisions about future business investments.  Nearly every category manager can find an unexploited niche that could yield some level of sales growth. But a unified category management process helps focus the organization on the top priorities.

Taken in its entirety, the process is called a Category Review.  In the review the category is defined, its role within the company or store is defined, its sales and potential is assessed and a specific budgetary goal is set. With the goal in mind, discreet tactics around adding or reducing products, changing prices, changing promotions or changing merchandising are developed to meet the goal. The costs associated with the changes are approved and the organization implements the plan. From a top down approach, it is a proven process for capturing and sharing the best information about how to succeed in the category to remain competitive.

Retail Inventory PULL Model Explained

Tuesday, March 11th, 2014

Screen Shot 2014-03-06 at 1.44.40 PMIn a Pull operating model, the stores can select which products and how much they will carry. This is typical in most co-op models (like True Value or independent grocers) or franchises like Hallmark stores. The store management selects among the breadth of products offered by the wholesaler(s) and decides what they will carry, where it will be merchandised and how much to carry.  Replenishment is at the discretion of the store through store-orders. To automate the store orders, the sales data may be transmitted to the replenishing warehouse and automated orders are created to maintain a minimum store inventory level. Vendors who call on these retailers typically devote substantial sales resources to call on stores or store groups to influence new item selection, pricing, promotions and order levels.

The benefit of a Pull operating model is that the decision about product selection, quantities and timing should be so close to the customer as to better anticipate true sales rates. Thus, a store owner in Minneapolis can postpone receiving garden supplies until May while a store owner in Dallas can have them in February. Store management can meet niche product requests and better manage the inventory in the store for the actual store conditions.

The drawbacks are that there is little financial control in place to prevent poor decisions from scuttling store performance and stores can vary wildly in their presentation to customers. Inventory bulges and shortages can crop up unpredictably across the system. Vendors can wield control through relationships that may not be in the best interest of the retailer’s financial system. Purchases can be made without reaching full volume discounts. There is more unpredictability in the financial performance of the entire system. Vendors can multiply as each store finds their own source for common goods – and power buying opportunities that come when vendors are consolidated are bypassed.

Retail Inventory PUSH Model Explained

Friday, March 7th, 2014

Screen Shot 2014-03-06 at 1.45.19 PMIn a Push operating model, products are selected by buyers, a forecast is developed for anticipated sales, products are sent to the stores to supply that forecasted demand and if the products are replenished, they are replenished from headquarters or an HQ system. The most common example of this is in fashion retailing where new lines are sent to stores in a single wave or possibly two throughout a season. In a push model, it is critical that the buyers are very capable of predicting sales trends and forecasting sales rates by store. One of the benefits of this model is that store operators do not have to be deeply trained in product attributes to select their own assortment. Typically, stores cannot determine what products they receive or how many cases they will be shipped. Store operators receive the product and merchandise it as direct by headquarters. In this model vendors are typically limited to influencing the corporate location and consumers. Vendor sales representatives would waste their time trying to influence store managers as they have no control over purchasing.

The benefits of this model are the benefits that come with centralized control. Purchases are made at volume discount levels, stores are uniformly managed and merchandised and vendors are held to standards of delivery. Financial control is more predictable as forecasted sales are managed within a corporate budget.

The drawbacks of this model are the risks involved with having an entity that is so far removed from the end customer making critical decisions. The buyers may not understand the competitive situation in the market or the regional taste of the customers. Furthermore, the forecasting model has to be tremendously accurate to eliminate out of stocks and over stocks at the store level. Store conditions for Push models can deteriorate quickly with loaded pallets on the sales floor some months and empty shelves other months. There has to be a fast response feedback loop from the stores to the central location for this model to be efficient.

How to Manage Obsolete Inventory

Friday, February 28th, 2014

question-markFor most retailers, poor buying decisions lead to poor cash flow. Obsolete inventory ties up cash. It requires close monitoring to maintain the appropriate level of stock. Spend time to review aging inventory and make adjustments to prices to sell slow-moving products and free up the cash to purchase more attractive merchandise. When possible automate reporting so that store and shelf inventory older than 60 or 90 days are flagged in your reports so that you can take abatement steps.

For all merchants, taking unplanned markdowns is difficult.  Build a small expense budget each month called “unplanned markdowns.”  Then, when stagnant inventory seizes your cash flow, use a planned markdown strategy on the most troubled products to induce customer sales. The markdown can be offset by the “unplanned markdown” expense line and not have as devastating effect on operations because the markdowns were already built into the budget.  Consider setting aside a specific percent of sales each month that is reasonable to cover unplanned markdowns. Begin with 1-2% and adjust as you gain more insight into this troubling issue. Over time you may need to set a fluctuating percentage as inventory from back to school, end of year and holidays may need to be aggressively marked down. Tracking and managing an unplanned markdown budget should also start to reveal patterns about your buying habits and your customer’s purchasing habits. Typical patterns to look for include  a local affinity for particular colors (Be smart about purchasing items in the local school colors in paper and other supplies.)

Savvy merchants create a markdown plan for stagnant inventory.  Product that is non-seasonal and simply is not selling may go on a 25%/50%/75% markdown plan where the price changes automatically every 30 days until all of the product is eliminated in 90 days.  Seasonal products typically need a more aggressive markdown plan that may be a 50%/75% markdown completed within 45 days.   Selecting a specific back end cap or other store location for the marked down goods also creates a good merchandising practice.  First, it removes poor sellers from the most valuable sales locations in the store. Second, it creates a destination for your bargain-minded shoppers who will regularly shop the discount areas. These bargain hunters can actually accelerate the cash flow and give your store a reputation for having great prices.

5 Things Smart Retailers Do to Manage Accounts Payable

Tuesday, February 25th, 2014

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  1. .While it may be good for your credit history, it is a bad cash flow practice to pay every bill when it arrives. Set your timing to pay bills as they come due.
  2. If available, use online banking bill payment schedules to manage payables to the exact due date.
  3. Ask for discounts from vendors for early payment and ask for longer payable terms when taking on new products or lines from current vendors.
  4. After a history of consistent payment, ask for longer payables terms.
  5. When you are willing to pay in cash, always ask for a cash discount.

Exclusive: Meet the 3M Experience in Staples

Friday, February 14th, 2014

Post-It mural

It grabs you: You are not going to miss a 10′ X 20′ mural made entirely of Post-Its hanging from the open ceiling of a Staples store.  And that is just the start of the “outside the box” thinking that went into the 3M experience being tested in two Staples stores in the U.S.


It begins at the front right of the entry: a hanging circular light changes color  using the three LED’s within.  Then there are the table and chairs, fixtures and video screen covered in a variety of 3M coatings. Not for sale in the store. Just to see how durable they are in a retail environment.  The video plays a loop embedded into a clear plexi insert in what is now a common technology store form: the stand alone white oblong with rounded corners. (see also: Apple Stores, Best Buy Stores, Verizon stores, AT&T Stores, etc.)


An artistic decision was made to merchandise product in a color spectrum to highlight both standard and unexpected 3M products: Washi tape, Post-its, flags, highlighters, tape dispensers and duct tape abound in a variety of new designs and forms. (mustache post-it notes and Superman duct tape.)

Like a Pinterest board come to life, there are washi tape covered items (like journals, picture frames and glass sugar dispensers) and washi tape samples to let customers try the crazed-crafter staple. (No pun intended.)

Corporate 3M has been making the touring rounds to a Minneapolis-area Staples as well as the Florida HQ Staples to see if this store-within-a-store approach makes fiscal sense.  Our sources agree: it’s an eye-catcher, but so far the jury is out as to whether this 3M experience is driving the revenues required for a national rollout to make sense for 3M…or Staples.


It speaks to the lack of visual merchandising experience that the front of this area has the usual tired photos of happy families while the really WOW eye-appealing Post-It not mural faces the back of the store. There’s something here that could make Staples a destination store for the hip-Pinterest crowd if there was a better create-it, make-it story highlighting the unusual new items.  Unfortunately, dropping really cool product into a less-than cool store doesn’t turn customers into purchasers.  (For example, a shopper looking at the Washi tape display looked at the odd tube merchandising and thought it was a gift wrap display.)

Kudos to both companies for giving something gutsy a try.  This is the perfect example of why retailers test before rolling out.  With more focus, it could be a hit.