• Kevin Natapow


HUGE- many of you who have seen my presentation at FTF or elsewhere know that I put a huge emphasis on location (50% of your success) but that should be an easy one, which is another discussion. Customer service, and inventory control, which plays heavily into your customers overall experience are much more challenging as they are ongoing and represent about 10% and 25% of your stores success respectively in my book. As small independent retailers our challenge is to create a unique identity for ourselves, perfect the customer service experience, and find awesome merchandise thaQuestion 1:

t attracts, and fosters, a loyal customer following. A recent survey of 2,000 consumers showed that 83 percent were willing to spend more on a product or service if they felt a “personal connection to the company.” We all know this to some degree but the belief that the products we choose and the artisan stories alone will sell the product is not true. We have to create that amazing “wow” experience that makes our new or existing customer want o keep coming back because of their experience, not just the fair-trade factor. In addition to an outstanding customer service experience, you have to maintain excellent inventory management practices to further capture that customer loyalty to your brand. Inventory management protocols keep stock moving efficiently through your stores, without overstocking and tying up cash. Ultimately, you’ll increase sales (upwards of 25% if you are not doing any inventory control measures and do it diligently going forward), maximize profits, improve customer satisfaction, and develop that unique identity that customers can remain loyal to. Some quick examples of how inventory mismanagement can affect the customer experience and subsequently sales are that too much inventory can lead to excessive discounting, which will eat into profits. It can also overwhelm your customer with too many choices, which studies have shown lower sales. Conversely, not carrying enough inventory results in missed sales opportunities, leading to lower revenue and dissatisfied customers. So yes, customer service is hugely important and I do a lot of work with clients on an efficient and effective hiring process, training procedures and protocols, and ongoing employee/volunteer management. All of which give every customer a top-notch experience, but again, doing inventory control is hugely important for the whole customer experience. You can have the best-trained employees in town, a top-notch location, but if you have the wrong product mix, in the wrong quantities, at the wrong time, you will lose that customer loyalty and see your sales drop. A recent study showed that worldwide, retailers collectively lose an estimated $800 billion a year due to mistaking low sales for low demand, making it one of the more damaging, yet preventable, issues facing retailers.


  1. Very interesting! I have never thought about the important relationship between inventory control and customer service!


  1. Having trouble reconciling “don’t overwhelm customers with too many choices” and “have XXX # of skus per sq ft”. 

  2. Don’t remember what XXX was, it came up last time, but it was more than we have, and already people exclaim about how much there is to see and how many choices they have. They say it like it’s a positive thing, but as often as not people who say that don’t make a purchase.


(Mind you, we haven’t broken down every style of each product into its own sku. Working on it!)


  1. It is a very interesting correlation – that if you don’t have the right inventory “mix” your customer won’t be satisfied when looking in the store for a purchase.



  • Kevin Natapow


As you all know, customers are a finicky bunch! The goal is to get it just right and studies show that too much overwhelms them and too little bores them. The goal is 1.7 SKU’s per sq ft which I will discuss in another question but that is a number that for store like ours is a good balance. The goal is to be close to it.


  1. And just to confirm the #SKUs per sq foot increases for Holiday to What?


  1. This is great info Kevin, and good stats.



  • Kevin Natapow


Inventory control is all about having the right merchandise (sells) in the right amount (min/max) of merchandise at the right time (seasonal). If you don’t control these factors your customer will tell you with their dollars by not spending them there!



  • Kevin Natapow 


It is not necessarily an increase in the # of SKU’s as it is an increase in inventory. You will see an uptick in overall SKU’s but SKU’s per sq ft includes all active SKU’s, even if they are only seasonal. You may have items that are spring/summer/easter/valentines, etc that will not be on the floor on actively in your inventory but now autumn/holiday are. You will have more of everything because most shops will do 50% of annual sales between Sept-Dec so you need the inventory $ to make those sales.


  1. SO would I order more quantity of those best selling SKUS or always follow the min/max – Some items I cannot “reorder” during say November or Dec.



  • Kevin Natapow


EVERYONE should be doing a fall/holiday bulk up order- run a bestsellers report for non-seasonal items and order everything you are going to need for sept-dec of those items and ignore reorder points for them.


NEVER run out of your cash cows!