Michael Fruhling's Blog

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Posts Tagged ‘retail’

Escape From The Island of Unmet Expectations

Posted by mdf4u on January 8, 2010

This post is universally relevant, but is primarily directed to my friends in the retail business, as the concept discussed will likely resonate most strongly with them.

An interesting phenomena can occur in the retail world…based on judgment, market benchmarking and possibly some testing, management has high hopes for a new product line.  It sets high expectations, prioritizes company resources accordingly, sets budget numbers high, and orders big…and the product line underperforms.

This doesn’t necessarily mean that the line sucks wind.  Under some objective measures, it might even be considered successful.  Just that it doesn’t perform as planned.  For example, a $75MM line for a company that was expecting $150MM is a dismal failure.  On the other hand, $75MM can be pretty darn impressive if you’re used to staring at $30MM lines! 

Lines that underperform are usually sent to the retail gulag.  That is, it drops in sales priority, items start getting discounted, and a self-fulfilling prophecy of failure results as sales continue to decline and retail space dwindles.  

So, what’s my point?  First, there are a lot of  fully developed product lines that have underperformed and which were sent to the retail gulag.  I’m betting that a good number of these could potentially be resurfaced, repositioned and/or repackaged and/or “sold” to another party in a different trade channel, or geography…especially if there was nothing intrinsically wrong with the offering.  

Is anyone brave enough to consider this option?

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