BrainTrust Query: Are Wal-Mart's new 'fashion merchants' the answer to improving the retailer's apparel business?
By Don Delzell, Partner, Retail Advantage
"Fashion Emergency At Wal-Mart" is the title of BusinessWeek's July 31st edition article. It may be hyperbolizing to suggest alarm bells ringing at Wal-Mart headquarters, but it appears that management has recognized that the company has a sizable image issue when it comes to apparel merchandising. Wal-Mart is addressing the challenge on a number of fronts and spotlighted in the BusinessWeek article is the human component on the battle lines, namely the establishment of 340 new "fashion merchant" positions.
Described as "part business analyst, part fashion expert, part spy on the competition," Wal-Mart's fashion merchants are reportedly being given a say in buying decisions based on first-hand observations at competing stores and from in-stock deficiencies in their own aisles.
(One example cited: a fashion merchant spots out-of-stocks in a certain women's 5-1/2 shoe and alerts headquarters to the fact that Hispanics, prevalent in the area, tend to have small feet.)
Attracting more Target-esque shoppers to its higher-margin fashion departments is a priority for Wal-Mart. And part of its strategy for doing so has been diverting marketing funds once earmarked for TV advertising into store environs, their "most important media channel," according to John Fleming, head of Wal-Mart marketing. Along with that commitment, apparently, is a refocusing on store-level decision making. Some would argue that's a step backwards for the retailer universally respected (feared?) for it's headquarters-based merchandising skills.
Discussion Question: Can Wal-Mart's new labor-intensive "fashion merchants" approach really work, over time?
For me, this is not much different than the long ago department store practice of "branching." That was where buyers and assistant buyers were out in the
stores on a weekly basis, making one-by-one decisions based on moment-in-time snapshots of in-stock, presentation, or some other store specific and time specific circumstance.
But in Wal-Mart's highly automated world, the questions abound. Who trains these people? How do you determine the relative quality of the input they provide? If there
are 300 of these folks, how many of them came off the Wal-Mart floor? Is that a good training ground?
What about the conflict between micro-decision making and buying power, centralized organizational culture versus store level influence?
One of the secrets of Wal-Mart has always been that stores focused on operations and headquarters focused on merchandise. This seems to be a major
step away from that. Veterans of department store cultures can tell horror story after horror story of what happens when poorly trained store personnel, of varying talent
and ability, are provided with inappropriate input or impact into the assortment building process.
This is one of the most frightening things I've read about Wal-Mart's new approach. Not only is it a method and process from the 1970's, it feels very "wrong" culturally
and economically. Who pays for these people? Why isn't the technology providing the out-of-stock information about the size 5-1/2? Have cut backs at HQ led to an inability
to manage each SKU at the store level as often as required for optimum performance? Is the right answer eyeballs in the stores?
Dangerous.