How to Spot Great Merchants

A large portion of your catalog’s success is in the hands of its merchants. They are, after all, the ones responsible for finding, developing, pricing, placing, analyzing and ensuring delivery of all those great products you offer.

Of course, other staffers are important, too. Success comes from the contributions made by all team members. But I believe special attention should be paid when hiring or developing merchants since they’ll be integral to your success. This month I’ll examine the key traits to look for in merchants.

Analytical Ability

The most effective merchant is skewed more heavily toward the analytical side than the intuition side — usually 60/40. Many executives think merchandising happens in a black box and that merchants just somehow know what products to pick.

But to be really effective at building a business, you must know how to analyze it, and such analysis requires math skills and an analytical approach. Merchants spend most of their time with a calculator negotiating costs, calculating margins, determining price points, projecting quantities, monitoring turn rates and watching inventory levels. Unless yours is a large organization with a lot of staff support, merchants won’t succeed in the long-term if they can’t get their minds around the numbers.

Ability and Desire to Understand Customers

Rarely is being a good merchant about finding products that fit your personal taste. More often, it’s about knowing what your customers will like. That takes a combination of historical review and getting into customers’ heads.

History tells you what customers’ buying behaviors with you have been, and it helps predict future behavior. And getting into people’s heads allows merchants to surprise customers with something they haven’t yet seen from you but are likely to buy given those customers’ lifestyles, life stages or demographic profiles. Merchants can get this information from primary or secondary research and from spending time doing things your customers do, such as shopping where they shop and listening to calls taped from the call center.

Tip: Have merchants find a person whom best represents your catalog’s customer base. Then when searching for products, merchants should ask themselves: “Would that individual understand this product, like it and want to buy it?”

Curiosity

Applicants should be curious about the following:
- your customers;
- what’s selling, what isn’t and why;
- how to grow the business;
- why vendor costs are what they are;
- how to position products in creative; and
- how products are made.

These queries will create the drive to discover answers that may uncover fascinating opportunities for your catalog. You can glean this critical trait during the interview by taking note of the number and quality of questions the candidate asks about your business, customers and company culture.

A Love of Products

The best merchants love to shop and love “stuff.” They’ll list shopping as a favorite activity and be fascinated with products of all kinds, not just the categories they’re currently purchasing or interviewing to buy.

I don’t think a great merchant must have specific category experience to be successful in a given job. For any product category, the buying process is similar, and the general skill sets are the same. Specific category experience can be taught and learned. Sure, specific category experience may help the newly hired merchant to hit the ground running, But if the curiosity is there, learning how to buy, say, domestics versus apparel will come by reading the right materials, shopping the markets and talking to people.

Adaptability

Business changes rapidly in our economy and culture. Products have short life spans, and customers continually demand something new. Brand or company loyalty is rare, and business ideas must get executed quickly.

For merchants to be successful, they must adapt to the marketplace, customers and internal company direction. If the candidates can’t stand to have someone “move their cheese,” then they probably will have a tough time with success. Category responsibility will change. New businesses will be launched, and old businesses closed. Pricing strategies will change, and merchandise and creative concepts will be tweaked. If the merchant can’t respond to these changes — and be a driver to create these changes — he or she will have a difficult time.

Ability and Desire to Travel

Building a business can’t happen from the four walls of a corporate office. As much as the Internet has helped merchants, it can’t replace being physically at markets and trade shows, visiting vendors to see their capabilities, traveling overseas to view unique products or to secure great pricing, and doing some competitive shopping. Applicants who say they can’t or won’t travel may not be your best choices.

A Sense of Urgency

Any buying job usually has an element of speed — speed of product to market, meeting the deadline for the next book closing and reacting quickly to a star (or a dog) product. If there’s no ability to juggle multiple products while meeting deadlines, your new merchant always will be a step behind.

While every position in your company is important, the merchant’s ability to impact your business is slightly greater than for other positions. Take care when hiring and developing your merchants.

Phil Minix is the managing director of catalogs for Reiman Publications. You can reach him by e-mail at pminix@reimanpub.com.