Great Retailers Have Great Merchants

I recently read an article in the Wall Street Journal, titled: “Data Pushes Aside Chief Merchants”?  The article reported that “intuition is being displaced by algorithms,” and that a new breed of chief merchant is being hired by large companies such as Kohl’s, Target, and Walmart.  The new merchant is more likely to have come from marketing or finance, since they are now “data geeks”, able to interpret the desires of their customers from “big data”.

I somehow found this article very troubling. We in the world of catalogs and ecommerce have always used the productivity of every square inch of our catalogs or web sales data as a guide for evaluating products.  High performing categories of product were expanded; underperforming ones contracted.  Despite the use of analytical tools, we have always recognized that the success of most catalogs rests on the brilliance of their merchants.   Products reflect the merchant’s vision, taste, values, and customer insights.

I have also learned that merchandising is a gift that some have and others will never achieve.  Several years ago, a client ran an experiment, hiring on a “trial basis” three merchants who had applied for a job at their company.  Each of the applicants was asked to go to the same trade shows and select six products each for the catalog.  In the subsequent catalog, the 18 products were given equal billing.  One of the applicant’s products produced three times the sales of the other two.  She got the job!

I fear that the companies that “push aside” their merchants with data will quickly be like the many of the presidential hopefuls that only tell us what polls say we want to hear.  They follow rather than lead.  The true merchant leads, presenting new products that we only know we want to buy when we see them.  For years, the Gap led the way under the leadership of Mickey Drexler; he was credited with their meteoric rise during the 1990’s.   In 2002 he was abruptly fired by Gap founder Donald Fisher and moved to J. Crew, where he again took a struggling company and repositioned its merchandise for greatness.  The Gap has never recovered from Mickey Drexler’s departure.

So, while I myself am a “data guy,” I continue to be in awe of great merchants.  Some of my most successful clients are successful despite some of their operational shortcomings, because of the brilliance of their merchants.  In general, great catalog and ecommerce companies have great merchants who have that sixth sense to find or create product that anticipates what their customers want, just before their customers want it.  Think twice about investing in any retailer who hires their new merchant from their finance or marketing department!

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