..and when the sun rises again tomorrow, we'll see how far we've come ...

..and when the sun rises again tomorrow, we'll see how far we've come ...

... just to remind myself why I'm doing this ...

Depending on our personalities, the world can be a crowded place or a very lonely one. For those who seek comfort in numbers, there is no shortage of hangers on, but for those who avoid that circus, keeping thier own counsel can leave them feeling quite alone and disengaged from the mad place we call home. Life is a trade off and most of us choose how we live it.

For me, I'd rather work things out as best I can, using my own thoughts and feelings to sort things out. Following the crowd has never been a temptation to me, but that has its price, one that I'm totally comfortable with every day I get to stand up and be the person I aspire to be. When I sometimes lose track of who that is, I come here to remember, to reconnect and to resume my quest.

These posts are a reflection of some of what matters to me and it's a privilege to have the opportunity to collect these thoughts as they form in my head, as they prepare the way for my life, as it evolves from one day to the next. They re-inspire me when things seem to be floating about, with no particular aim or purpose, and it does happen from time to time.

So, today I had these thoughts that I think are worth writing down for the future me to look back on when I need to ...

Saturday, June 27, 2015

.. and they used to deliver bread and milk to the door for free too ...

Way back in the early part of 2013 I made a decision to try something very different and potentially detrimental to my business for some time, until the concept would actually have sunk in. After musing about, then calculating and finally planning a very controversial concept for a retail operation, I actually did it - yup, I did it. The local paper got wind of it and wrote up a lengthy article about it, and made a decent effort to explain it, because I think the reporter actually got it! Well, while some folks also got it right off the bat, a lot more didn't, particularly at first. I tried a number of signs explaining it in the simplest terms but the fly in the ointment proved to be the "charge", or "fee" as the paper called it, and the rest of the message fell on blind eyes, deaf ears and lazy minds. I say lazy, because so many were unwilling to even make any kind of attempt to understand the reasoning and get past the idea of paying for something that up to then was simply a free activity, seen as almost a "right" in its own.

Starting back a bit, originally the thought that got all this going was that EVERY person through our door was a potential sale but definitely a real cost to the business; the calculation was based on the annual cost of doing business divided by the number of people through the door. For illustration's sake, let's use some round arbitrary numbers of no relation to the business. Annual cost of doing business, $150,000.  Number of people through the door in a year, 30,000.  making the cost $5 per person. Putting it another way, we have to lay out $5 to literally pay a body to come into the business. At that point, nothing has been sold yet. At this point we have to presume a gross margin so let's set it at 50%, for argument's sake and to make calculations fairly straight forward. To recoup that cost from 25% of the browsers who actually turn out to be buyers, each buying customer has to leave behind, on average, $40 to cover the product cost alone (to the business) of what they bought and the cost of having the opportunity to buy it. It also means that 22,500 people through the door paid nothing towards the cost of having the door open for them to come through. That cost is then being paid entirely by the 7,500 buyers who actually made a purchase. How many people do Canada's Wonderland, Fort Henry, Disney World, Lang Pioneer Village, and so on, allow through the door to see what there is to see without contributing to the cost of making it available to them for that purpose? ZERO. What if they only charged those that actually did something or looked at the displays, that group would have to pay for the whole thing and make the cost of admission prohibitively expensive. Since that's not a feasible business model for their operations, they spread the cost over EVERY person who comes in, thus making it affordable for all and allowing the business to survive and continue to provide the value that their visitors enjoy day after day.

So, with this "concept" in mind, we ran a pilot project to test the concept at retail level. For 6 months we applied the concept and monitored the reactions and results. That takes us back to the top of this post. Now, a few months short of two years after the pilot project was complete, we still hear comments about "that's the place that charges you to go in" and yet sometimes they remember that the actual "buying customers" saved 20% on everything they bought, including things like $700 desks and $600 clocks. You see, the amount we charged each person, which was already part of the prices of goods being purchased, was actually removed from the selling prices of what was then purchased, making everything cheaper to buy because the fewer buyers were not having to pay the whole cost by themselves. The concept was designed to provide a great benefit to those who actually supported the business by buying the products., at the expense of those that just wanted something to do or a place to pass the time.

Since our project was completed, this SAME principal has made itself known in the wholesale world at the world's largest market for retailers, held twice yearly in Germany. Attendees to the market now pay $35 per day to attend their buying show which was once free and open to all retailers. It takes part of the load and cost of putting on the market for the retail industry back on the very ones who need it and off the backs of those who provide the market in the first place. It's about an equitable distribution of costs among ALL the beneficiaries of the enterprise. This thinking, while revolutionary today, will become far more mainstream as costs escalate everywhere.

We'll always have lazy minds that see only what they think is bad for them in the immediate and miss the true value behind it. I'm convinced that new strategies are needed for retail, as we've known it, to carry on as a way to buy and sell goods in an open market. I think the on-line marketplace is part of that evolution. My own day in retail is winding down but my mind still wants to race ahead to see what the challenges will be like some day, and to try to offer the things I've come to know about it, to those who will devise those new strategies.

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