Profit Prospects: Matt Sweetwood Is Wrong!

I’ve long admired the strength and genius of the Sweetwood family and their ability to morph Unique Photo into the powerhouse it is today. Nothing stood in their way toward success.

I’ve had the honor of hearing Matt Sweetwood speak. He has great insight. In one area, however, I’m concerned he’s a bit off course and it could be dangerous to a contemporary specialty store operator.

Read Sweetwood’s 12-point recommendation for retailers in Digital Imaging Reporter’s January 5, 2017 issue, page 28. Particularly review the first item. Sweetwood advocates:

1. Pare Down Your Product Lines:
Poor cash flow is a killer for any retailer. If you are carrying too many bags, tripods, lighting, accessories, and yes, even cameras, now is the time to reduce the number of product lines. . . . In many cases, we have a long history with vendors . . . Your kindness to them is hurting you and your company. If you are unsure of what to cut, ask your staff and systematically go through each product category and only carry what sells. . . .  

In a theoretical world Matt Sweetwood’s approach is correct. I taught that for years, but today’s successful retailers set me straight. Times have changed. Two major factors have shifted to require updating this old-school thinking.

First, if you’re close to a new Best Buy Camera Experience Shop, Nebraska Furniture Mart or similar category killer, you’re facing immense competition for the customer’s attention. These mega stores have product offerings way beyond average camera stores. Often they have more than 100 cameras on display. How can you look like a specialty store after the customer has viewed these wide-ranging offerings? Second, if you don’t have a particular item, what’s the customer’s option? He orders it from the manufacturer who seems never to run out of stock and appears to ship to consumers four times faster than to retailers. You’re in a tough spot. You must find ways to make it work for you.

Stock Selection Quandary

Figuring out how to select what to stock can be touchy. One solution for data collection is to ask your floor people. A better solution is the “Make It Yes” pad. Insist employees write down each time they’ve said no to a customer. Stress that 100% compliance is mandatory. Requiring everything be written down immediately forestalls forgetfulness based on the salesperson’s possible personal biases for a specific brand. Base your inventory decisions on facts, not employees’ biases.

You can’t run your business based on your competition, but do take a look occasionally. Are they stocking a major brand not on your shelf? If you aren’t stocking what consumers want, how will those customers feel about “shopping local”? Perhaps you’re in a tourist area. Then your one chance to make the sale is when the customer is in your store. If you don’t have what they want, they’re gone. Forever.

Full disclosure—for more than 40 years I’ve been a member of and an advisor to the PRO buying group. McCurry’s made a lot of money on ProMaster products as retailers continue to do today. In the case of a mundane product like stepping rings, a selection of brands isn’t important. In higher priced goods—tripods, speedlights, better bags etc.—the customer demands a choice.

Customers Want Choices

Customers want to compare higher priced goods. Curate the best products for your store. One strong ProMaster supporter hired a new buyer who suggested they stock Manfrotto tripods alongside the ProMaster. The owner was reluctant, fearing the lower margin Manfrotto would eat into the higher margin ProMaster product.

The buyer insisted. Tripod sales doubled. Some Manfrotto sales were made, but more ProMaster tripods were sold overall. Customers want reasonable selection. The margin percentage on tripods decreased with the sales of Manfrotto, but the margin dollars increased from the Manfrotto sales and the increase in ProMaster sales. Make decisions that increase your margin dollars.

Colors? Wake up! In 2017 your tripod section needs as many tripod colors as you can handle. Ditto your bag department. Colors attract shoppers. Don’t fall for old-school thinking that you can’t afford colors because they turn slower than standard black. Actually they’re decoys dragging shoppers farther into your store.

One Midwestern retailer refused to stock colors: “Colored tripods don’t take any better pictures than black tripods.” A fellow retailer browbeat him into buying one of each color. His overall tripod business went up. A year later he reported he “finally sold out all those colored tripods.” His tripod business returned to the prior lower level. It’s hard to break the obsolete thinking cycle.

How does this balance financially? When possible, inventory what you must, supporting vendors that offer the best dating and quickest reliable replenishment. Some hardware vendors quietly did localized dating programs for certain retailers in the 4th quarter. Focusing on margin, rapid replenishment, turnover and dating gives you the greatest financial leverage.

Matt Sweetwood is right when he says it’s a tough environment. How you are coping with it?

Editor’s Note

After selling the successful McCurry Camera Stores in 1990, former employees and students called Bill McCurry to ask advice. Thus was born McCurry Associates. Bill McCurry is the chairman of McCurry Associates and the author of several business resources, including Guerilla Marketing for the Imaging Industry, Digital Guerrilla Marketing and It’s Your People … Really! The opinions he expresses in this column do not necessarily reflect the opinions or policies of Digital Imaging Reporter. Bill would love to hear from you with questions, comments or ideas for future columns. Please contact him at wmccurry@mccurryassoc.com or 609-688-1169.