I wrote a post about a year ago addressing an issue small retailers are faced with, that of the inventory management system, see link below
While certain smaller chains like Kicksusa and Jimmy Jazz have figured out practical ways to fix the problem, for DTLR it is still a lingering issue. I understand that making changes to the inventory management system is a costly investment, and most retailers can still get away with the traditional archaic system in place. But the issue I’m bringing up this morning can be fixed immediately and will only require discipline, training and a bit of common sense.
This post was birthed out of my latest expedition at several DTLR locations in my area. I frequent these places about 3 to 5 times a week based on my available capital; I’ve been a bit frustrated wit a recurring problem that this particular retailer might want to seriously address less they continue to lose money- I consistently have to leave behind 3 out of 7 shoes that are brought out to me for purchase simply because the sneakers are either dirty or have severely damaged boxes. Why is this a very serious problem?
I posed the question why is this a problem above and I’ll attempt to give you my reasons.
1. DTLR’s current competition:
As a minor retailer, they are going against more established chains like Footlocker and its derivatives, Finishline, Hibbett, Jimmy Jazz, Kicksusa ( the latter two have recently upgraded their store setting and their inventory management system). I’ve already written a post in which I stressed the fact that customer experience is gold these days (even banks are now installing coffee shops at their physical locations.) see link below
2. Nike DTC push:
I have been talking about NIKE CDO or DTC push now for more than two years and we are currently seeing its effect on the sneaker market. Instead of me repeating what I’ve already mentioned I’ll invite you to click the links below and read our take on it:
In this current market, dirty shoes and broken/damaged boxes should no longer be tolerated. DTLR may not want to consider what I’m saying but let me give you a quick breakdown of how much potential money is being left on the table .. Take the Jordan 3 pure money for instance; the shoe retailed for $190 and is now available via DTLR for $139.99. I wanted to pick up two pairs in size 8 and 8.5 and when they were brought out, I proceeded to ask the sales associate to take them back to the storage room. They each had the display label shoe placed on the corner of their respective boxes and were extremely dirty (PS: this is not an isolated occurrence, I’ve had to do this for many sneakers for as long as I’ve visited these places)
Now let me show you how much money is being flushed down the toilet because of this problem.
The histogram above basically confirms retailers’ disease that they fail to recognize because they are stiff-necked. The shoe is selling for $35 more on third party marketplaces than it is in regular retail shops ( i.e. DTLR). I hope you recognize the gravity of the problem at hand; my objective was to show how much money was being left on the table and I’ll do so. The $35 may be negligible when you consider only one pair of shoes but let’s run some numbers really quick. DTLR has about 110 stores in the USA and the high performing stores are in DMV area if I’m not mistaken. Now let’s assume that each of the store has about two DIRTY pairs of the pure money 3’s left in stock ( and I’m being generous). That’s about 220 pairs left in stock, now let’s see how much money is being left on the table.
If you consider the fact that two pairs are left per store , then the potential profit lost is :
$35 x 220= $7350
$7350 may not look significant but that’s just for one model ( the pure money jordan 3’s). Just pause and think about the myriad of WHITE shoes that are still collecting more dirt and dust on shelves because they are dirty to begin with. I don’t want to just bring up a problem without offering solutions so here are some of the things the retailer can do to cure this disease.
1. All white or lighter shoes could be wrapped
While this may make the store not homogeneous, it is a very practical solution. Many consignment stores wrapped every single sneaker on their shelves ( to protect them from oils, dirt and any other damages)
2. If wrapping seems absurd, then I suggest that all white/lighter shoes be placed in a display glass/case
That can be done easily and it will actually enhance the look of the store. And if customers ask to see the shoes, they can be given gloves or wet wipes prior to come in contact with the sneaker
3. Damaged boxes?
Damaged boxes tend to be a problem for a lot of retailers, even footlocker had a serious problem with it and they solved it by shipping out their shoes ( double boxed). But DTLR’s issue is a bit different; it has to do with how the sneakers are stacked. Some shoes are very heavy and the store needs to implement a system that compartmentalize the shoes based on their weight ( it doesn’t take a rocket scientist to figure this out).
These are my immediate solutions and all it’ll take is some training, discipline and a little bit of common sense to get the ball rolling. There are many other things that the store needs to do for improvement but as of today, this issue needs to be addressed immediately.
Here are additional sneakers I came across that were dirty.
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