One of the many things I got wrong.

 

I was once in the middle of a power struggle at a large company.

Both sides would each use me as a sounding board.

It was not an attempt to sway me, as my opinion didn't warrant the effort.

One example was when the one guy was mocking the other's lack of responsible and basic "retail common sense".

He said that when after a dry spell there was rain, the "smart sensible businessman" brought out all his umbrella stock and possibly even revised the pricing to reflect the higher current value. He knew that people would need umbrellas and this was the opportunity to make some profit. One could even raise the prices of umbrellas above the recommended prices, to take advantage of the sudden and fleeting demand. Only a good conscience prevented one from taking advantage of the poor and to price items just below the threshold of abuse.

This threshold was subjective and different retailers pushed the envelope but stopped where their personal line was.

He said the guy he was mocking believed that when the first big rain comes, the smart retailer marked down umbrellas and promoted them at reduced rates! (insert mocking tone here)

When stating it this way, without context, it seems such a silly way to do run your business.

"Everyone" believed that this approach was so dumb and lacking in basic retail common sense that it was not even worth discussion.

I tended to agree at the time with him, and as a result, developed an unconscious bias. All his other ideas were written off as harebrained schemes lacking in substance.

It was just today, many years later, that I questioned my views and how perhaps I was seeing it wrong.

Let's take the problem apart.

Ask yourself, what does the retailer hope to achieve.

Does he want to make a quick and easy profit?

If he did then yes the best way to get to this was to markup the umbrella stock and take profit.

If however you were trying to create a brand, and have people come to you in increasing numbers to buy random items in increasing numbers. If this was what you were going for, to build a brand that represents having "what the customer needs, in their hour of need" at a really good price, this is a better way of marketing the plan than any of the conventional media tools.
This was the way empires were built.

Your goal as a retailer determines what you do with umbrellas when the rain comes.

M Parak
Jan 2021