Reacting Versus Repairing

When starting a retail business, you never think you’ll encounter the number of problems that you do on a daily basis. No one informs you that issues with customers, employees, vendors, landlords, computers and so on may arise. In the retail business, effective solutions to these problems are necessary so that more time is spent focusing on making the business more profitable.
When dealing with business challenges, the focus must be on the differences between being at cause versus being reactive. When assessing a problem, you need to not only solve it, but also identify the cause so that it doesn’t need to be solved again.

For example, I was talking with a retailer recently whose sales were trending lower in one of the major classifications of merchandise. The reactive solution would be to take immediate markdowns.

While markdowns relieve excessive stock to stimulate sales, they do not provide a solid basis for a profitable retail model. The review of the cause would take the time to understand a large number of the components that could contribute to a sales decrease.

Have team members look for keys such as sales increases or decreases within a related classification. Is the level of current or new merchandise within the classification? Remember, 90% of your sales come from merchandise that is 90 days old or less. Examine the assortment by price, seasonality or size – if any of these are out of balance, sales will be affected.

Coordination and team involvement also prevent duplication of efforts and guarantee problems are prioritized, ensuring the right work is being accomplished. Challenges are many within a retail operation, whether it be a merchandising or operational issue, so your time and expertise are key assets that must be managed.

Understanding the problem solving process is a task that will improve leadership capabilities. This process helps executives and managers sift through many issues and obstacles facing them to identify the right problems and address them with the proper solutions.   
There is a right way and a wrong way to solve problems. There must be a defined process that is taught and utilized to lead from a problem to the correct solution.

Problem solving was created to define this process and ensure a proper outcome. The process will help keep individuals focused on each step that leads to the implementation of a solution. This involves a process of problem solving that will coordinate the efforts of the entire team so that everyone is contributing ideas and getting involved.  

As your business grows and problems become more complex, creating more problem solving opportunities is crucial for success.  A problem solving process is important to coordinate activities and focus everyone on the right problems at hand and how to correctly find a solution. The most important consideration, however, is that problem solving never overshadows solving problems. Never get so wrapped up in the process of problem solving that you forget to solve the problem.
Jim Malone is a senior consultant with Retail Smart Guys. For more information visit

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