March 6, 2025 • 32 mins
Grab your essential FREE guide - How to clear excess stock without damaging your brand.
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Why do big retailers manage stock so differently from small businesses? Their approach can seem like a completely different world, but there’s a lot to learn. Especially about cash flow and profitability.
Today, I’m joined by Paola Maggiulli, a merchandising expert and one of our Stock Doctors at The Resilient Retail Club. With years of big retail experience and her own business, she knows exactly how both sides think.
We’ll dive into how big retailers make stock decisions, why data matters, and the common struggles small business owners face with promotions and markdowns.
Most importantly, we’ll talk about how Stock Doctor takes the guesswork out of inventory, pricing, and cash flow. So you can stop winging it and start feeling confident in your numbers.
What's Inside:
[02:58] How merchandising really works
[06:48] The role of merchandising in retail
[10:19] The transition from corporate to small business
[13:16] Challenges and rewards of small business
[17:44] The biggest difference between how small vs. big brands deal with stock
[24:52] What you should know about markdowns
Resources:
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
Have you ever wondered what it's likebehind the scenes of a big retailer?
(00:04):
If you've ever wanted to know moreabout the way that big retailers
think about stock, then you won'twant to miss today's episode.
Hi, I'm Catherine Erdly.
I'm the founder of the Resilient RetailClub and your host in today's podcast.
I'm also joined by Paola Maggiulli.
Paola is one of the Stock Doctors thatworks with me on my Stock Doctor program.
If you want to know more about thestock doctor program, then do head
over to resilientretailclub.comand check out the information.
(00:28):
Paola has been working with me since lastyear and she also shares a very similar
background to me in terms of the factthat she worked for big retailers for many
years before starting her own business.
And I'm really excited for today's talkwhere we delve into the true secrets
behind the scenes, what it's likeworking for a big retailer, why Paola
is so passionate about working withsmall retailers and the differences
(00:48):
between how big retailers and smallretailers think about their stock.
Welcome to the Resilient Retail GamePlan, a podcast for anyone wanting to
start, grow or scale a profitable creativeproduct business with me, Catherine Erdly.
The Resilient Retail Game Plan isa podcast dedicated to one thing,
(01:11):
breaking down the concepts and toolsthat I've gathered from 20 years in
the retail industry and showing youhow you can use them in your business.
This is the real nuts and bolts ofrunning a successful product business,
broken down in an easy, accessible way.
This is not a podcast about learninghow to make your business look good.
It's the tools and techniques that willmake you and your business feel good.
(01:35):
Confidently plan, launch, and manageyour products, and feel in control of
your sales numbers and cash flow to helpyou build a resilient retail business.
Paola, thank you so much forjoining me on the podcast.
I'm super excited for our chat today.
(01:55):
Do you want to start offby introducing yourself?
I will, thanks for having me.
So my name is Paola Maggiulli.
I am one of Catherine's stockdoctors and I have got 15 years
in merchandising experience.
From everything from like I met myfirst merchandiser department was shoes.
(02:16):
Moved on to like luxury suits,I've done menswear, I've done
womenswear, I've done what else?
I've done like jewellery to likesofas, I've done everything,
I've done absolutely everything.
Amazing.
I thought it'd be great to have youon the podcast because obviously I've
talked about Stock Doctor a lot and we'vehad some of our fabulous clients on.
(02:36):
And what I thought would be reallyuseful was for people to understand
a little bit more or find out moreabout who are the stock doctors?
And you are the original!
And I thought it'd just be worthwhile,just sort of have a general chat
about merchandising because often Ifeel like I don't know about you, but
certainly when I worked in merchandisingthen, no one ever knew what it was
(02:58):
I don't even think my parents evennow know what I used to do back in
the day when I worked for corporate.
It's like, what does she do?
She works in fashion,but what does she do?
Actually no, it's likeChandler being in Friends.
You know, Chandler works in whatever,like, but what does he actually do?
Like, no one understands.
And he's also in data analytics, he wasin data analytics, analytics in Friends.
And I always feel like, it's alwaysquite interesting how that part, no
(03:20):
one really understood or understandsI think when I even start to think
about working in the fashion industry,I want it to be a buyer or a designer.
And then I actually, when I looked intoa little bit into it and because I was
so good at maths, especially statistics.
I was like, " I think I'm actuallyprobably better at this." I leave the
creativeness to my crazy outfits andactually I'm really good at numbers.
(03:46):
It's funny because it'sthe same thing with me.
So basically my story about how I gotinto merchandising, which we'll go
into a little bit more about what itis for the purposes of the listeners.
My degree was international business andI graduated and I was at the University
of Warwick and they would have allof the like graduate programs come
around and interview you for GoldmanSachs or all the consulting firms.
And I didn't get any of those.
(04:08):
And left and I went traveling and I cameback and I was like, what do I want to do?
I don't know.
And then I thought, "Oh, you know,I've always loved retail." I'd
always worked, that was alwaysmy Saturday jobs, my summer jobs.
That was all shop floor and I was like,"I really like retail," but I knew I
didn't want to be on the shop floor.
And I knew I didn't want to be likean area manager or district manager.
(04:30):
Because I mean, those people,they are so hardworking.
They really, really are and theywork really obscene hours as well.
They work so hard.
I remember every time we used to go onstore visits, I'd be like, how do you
cope without easy access to a kettle?
Like in an office, you get soused to having your cups of tea
all the time and they would justbe on their feet for hours a day.
(04:51):
So I was like, I don't want to do that.
But I liked the idea of retail andwhat I've always loved about retail
and still do is that it's so tangible.
You know, it's things that we allrelate to, it's buying and selling
things that we all relate to.
To be honest, I didn'teven know what I Googled.
I think I just googled, like jobsin retail or something like that.
And then it came up with merchandisingand all these years later, I
(05:12):
remember exactly what it said.
It said merchandising, youwork with the creative teams.
So it's good to have an interestin product, but effectively you
are analytic and you do strategicwork and look at more long term.
A s soon as I read it, I was like, yeah,that sounds actually absolutely perfect.
And that was it for like 17 years.
Then I did 17, 18 years in variousdifferent roles in merchandising.
(05:33):
I think about two weeks later Igot my first job in merchandising.
Yeah, so it's exactly like yousay, it's like the creative bit,
but you don't have, cause I 'venever done any creative subjects.
So I was always like, well, being abuyer sounds fabulous, but I don't
have any background in design.
I always thought I'd be a buyer.
And actually throughout my 15 years in thecorporate life I did do a role once where
(05:53):
I was actually a buyer and the merchandiseand that was for luxury branding.
So I got insight into that.
Which is all, which is all I thinkit's been quite useful especially.
Doing this stuff with you is thatI've done both sides as well.
And I can see like how people can comeat it from a creative point of view.
But the end of day, the numbers say a lot.
But yeah, I've always beenreally good at math at school.
I was always really good.
I mean, it didn't sound like the mostexciting, like telling my friends,
(06:15):
oh, we're going to work in fashion.
It's like, "Oh, what are you going todo?" I was like, "Oh, I'm going to work
in merchandising." And they're like,"What's that?" And some of them thought
it was like visual merch, so theythought I was like dress the windows.
Like no, it's to do with the numbers.
In the first couple of years inmerchandising, it's very admin based.
But it is such a good insight intohow accurate your information needs
to be and like the information youneed to actually pull the analysis
(06:37):
required to make these decisions.
So it's very spreadsheet heavy.
But if you're a spreadsheetlover, we absolutely love it.
Like it's an absolute dream to justkind of like get stuck into the numbers.
I sometimes think that was one ofmy favorite jobs was my first couple
of jobs in merchandising because atthat point it was like allocation.
So you basically, you sat and theywere like, here's all this stock coming
and you had to physically allocate it.
(06:59):
And by that, I mean, go intothe system and type in numbers.
Like that store gets seven and that storegets eight and that store gets, you know.
Like was, it was somethingreally satisfying about it.
Was like doing a number puzzle.
Cause then at the end, you'd be likebalancing it all out and who got the
size runs and all this kind of thing.
It was like a strangely satisfying.
I think worth just sayingthen for anyone listening.
(07:20):
The way I usually describe it is in a bigretailer, there are three product teams.
There's the buying team,there's the design team.
Most people kind of get what they do.
The design team is the creative force.
The buying team, they're commercial.
They make the ultimatedecisions about designs.
And then they do all thework with the suppliers.
And then merchandising is how muchyou're going to buy, when you're going
to buy it, when do you bring it in,how much you're going to sell it for,
(07:41):
what's your profit margin got to be?
But then also kind of like takingcharge of it as soon as it hits.
And then like, where's it going?
What's happening with it?
If it's not moving, are we discounting it?
And putting very much from likethe numbers analytics side.
So if we're sitting in a productdevelopment meeting, you know, I
wouldn't necessarily say, "Oh, Idon't like that. Or I don't think
(08:02):
that's fashionable or whatever."
No, you couldn't.
No, you couldn't.
You couldn't have.
The merchandiser really couldn't.
But sometimes you could say,interestingly enough, when I look at
the numbers, like we haven't sold greendresses for thee six years in a row.
Just putting it out there.
Yes, there was always a wayto put your point across.
(08:25):
Exactly what you said.
It's basically as soon as theproduct comes into the business.
It's the merchandiser's jobto basically look after it and
make the most money out of it.
It's basically about being asproductive as possible and making
sure that the stock is as profitable.
And if it does work, great.
Work toward building on that.
And if it doesn't work, then whatare you going to do about it?
You know, we weren't allowedto like leave the stock.
(08:46):
It doesn't work because, "Oh, itdoesn't work. Sorry about that."
That our job was to like manage it.
Also like for me, like with mylast job, my work to Anthropologie.
That was my last job,worked seven years there.
It was quite good there because I startedworking there within the first two years
that they opened the European office.
So it was kind of like, giventhe opportunity, just kind
of like own my own business.
(09:07):
It was like the first time thatI wasn't being told strategy.
But it was also like, because thehead office was in America and
our offices are just open London.
It was like, okay.
Well, you guys need to also workout like how it works for you guys.
So I remember when like things weren'tworking, you know, we had to work directly
with the PR team, the marketing team, theretail team, you know, the online team.
And be like, okay, these thingsaren't shifting at the moment.
(09:28):
What can we do beforewe go and mark it down?
Could we do somethingelse to help manage it?
That's also like another element of it.
It's great when this productsworking and it's selling.
It's like yay, brilliant.
This is a great bestseller.
But you know, merchandising is alsoabout dealing with the stock that
doesn't work and how to kind of likenot kill the bottom line, basically.
And try and make as much moneyout of it as possible, but
(09:50):
without completely killing it so.
And also learning to go forward so thatyou don't make the same mistake again.
Exactly.
And it's like taking thatanalysis, taking that history.
Doing those sort of like strategyproduct meetings when you're building
up your next season and going like,it's looking at what works, but
also remembering what didn't work.
So you don't make thoserepeated mistakes again.
All good times, all good times.
(10:12):
And so tell us a little bit aboutyour journey, 'cause you have your own
small business as well, so you're not astranger to the world of small business.
I am not.
I'll tell you what, though.
It was quite interestingwhen I was thinking about it.
So obviously I have my own small business,which I'm going to touch on in a minute.
Like exactly what I do, aswell as doing Stock Doctor.
But my dad used to have anItalian deli for 20 years.
(10:33):
And actually my small businessis in Italian food and cooking
and that side of things.
But I remember I would have togo and work on the weekends.
Like I used to really, really hate it.
But one of the things my dad used toget me to do was to count the stock.
So we would have to, especiallylike after the weekend.
So I had to do my gap year with my dad.
And on a Monday morning, I wouldhave to go on every single stock
(10:55):
shelves and I would have to count.
How many we had.
I had to basically fill up theshelves, tell my dad how much, so if
the box was empty in the stock room,we knew that I had to reorder it.
So it's basically, I was doingstock management from the
age of like, God knows, 15.
But yeah, I rememberdoing, I used to love it.
I didn't really like selling so muchbehind the deli, but I used to love
helping my dad like rearrange theshelves, bring the deliveries in.
(11:17):
Making sure that all the stock wasout and all that sort of stuff.
Yeah, so my dad had a deli andthen basically from that, obviously
I've mentioned I was in corporatemerchandising for 15 years.
And then I had decided that I alsohad this insane passion for cooking
and Italian food and things like that.
And so for the last 16 years, I'vealso been managing a small business.
(11:39):
Which is basically, it'snot just a cooking school.
It's like teaching people to take bettercare of themselves through cooking.
Mm.
I understand, especially, I'm surelots of people that are listening to
this, they probably don't even havetime to take care of themselves.
But I talk about the importance ofhaving to take care of ourselves so that
we can actually go on and be better atall the things that we want to achieve.
(11:59):
And all the goals that we want to hit.
So I understand exactly, it'scrazy because I went from a
corporate world, where you knoweverything's very structured.
And then I started this businessand I'll tell you from the
beginning, it was not structured.
I was like, what am I doing?
How am I promoting this?
What do I need to do?
And like over the years it's beena journey, but I know exactly like
(12:19):
going from corporate and workingfor someone else who basically
pays your paycheck every month.
And making millions for other peopleto then creating a business when
you're making money for yourself.
Yeah.
The journey has been wild.
I've got so much experience onrunning like big businesses.
From luxury to high streetlifestyle brands, I've done it all.
(12:41):
But even when it's your business,even though you have all the
intention to keep a level head,you can get so emotional about it.
You want things to work.
You want things to succeed.
You know, when I was in merchandising,my job was just merchandising.
I didn't get involved in the marketing,the PR, how things looked online.
My job is doing all of that.
So I've had to take what I've learnedin my corporate world, put it into my
(13:03):
small business and I'm still learning.
Like it's still things that Ifeel like I could be doing better.
But I think that's the beauty of smallbusiness is that actually you have
the say to say, "this isn't workingfor me, let me do something else."
Let me go into another direction.
When I left the corporate worldof merchandising, shall I say.
It wasn't because I didn't enjoymerchandising, I just didn't enjoy
doing it for corporates anymore.
It didn't feel very fulfilling.
(13:23):
Making millions, millions forthese companies, millions.
I cannot tell you.
You know, like I work in Anthropologie.
I had the second biggest, Iworked on home ware furniture,
so it wasn't the biggest area.
Women's wear is, but it still mademillions a year and to think you put
all the effort in, all the hours inand I was like, but it just felt quite
(13:46):
felt quite thankless after 15 years.
It was like, I feel like Iwant to do something else now.
So I've taken, even though obviously it'scooking, but you have to take some of
those skills that you learn from there,like even like pricing and managing my
costs and all of that sort of stuff.
It's all part of running a business.
You can't run a business if you don'tknow how much things are costing you.
(14:06):
Right now, I do Stock Doctor,which I absolutely love and adore.
Like it's reignited mylove for merchandising.
But then it also remindsme like the people that.
It kind of is quite a good insight forme, I'm seeing the women that I kind
of would love to work with me alsoon the cooking side because I see how
hard they work and it's like, Oh myGod, you're doing such an amazing job,
but are you taking care of yourself?
Are you eating well?
Sometimes I'm like, sometimesI'm like, have you had dinner?
(14:29):
Have you had lunch today?
Because I kind of go into likeItalian caring mother mode of like,
are you taking care of yourself?
Are you eating well?
Because I know from my experience,like how important it is self
care is to take care of yourself.
I know how many people plateswere spinning and how many hats
were wearing every single day, so.
It's so true.
No, I completely agree.
(14:49):
And I think as well, I think the thingis that behind a lot of these very brands
that look so lovely and warm and fuzzy.
Or are really desirable fromthe outside, like a lot of
corporate retail is really toxic.
I have to say, when I startedat Anthropologie it was lovely.
I really loved it.
(15:09):
It was really, it wasrun by all the heads.
Like all the main heads,should we say like the CEO, the
head of design, the head PR.
And we talk about the US, they wereall run by women and I loved it.
I loved it.
I loved how this bigcompany was run by women.
And then over the years.
Yeah, things changed.
And I was a bit like, but it was great.
(15:30):
To be honest, it was one of thehardest places ever worked up, but it
was my favorite because of how muchautonomy I had in running my business.
And it was very successful.
I'm very proud to say that Itook homewares to a different
level in my seven years there.
I started on accessories for two years andthen I did homeware for five and a half.
And I'm just so proud of like meand my buyer and our team that we
(15:54):
had, because we had like 10 peoplethat we were managing or more.
I think it was I think it was like 12,14 people were managing towards the end.
Got this area just everyone alwaysalways say to me Anthropologie and
they really think about the women'swear, they think about the home wares.
That's so true.
But yeah it's good times.
Good times but it's lovely workingfor, like you say, aspirational
(16:17):
brands and small businesses.
And helping them see that there'smore to you know, there's so much
more they can actually do to theirbusinesses and help them grow that.
Yeah, I think as well.
I was talking to somebody about theretail industry and we were saying how
hard it is and how toxic it can be.
And then I was like that's thebeauty of small businesses.
It's not easy, but my goodness, thepeople are so amazing and so passionate
(16:40):
and it's just such a differentexperience working with small businesses.
You know, it's why I absolutely love it.
Yeah, same.
I'm so glad that you reached out becauseI didn't think I'd ever go back into it.
And then as soon as like I had myfirst couple of clients, like, "Oh my
god, where have you been? Where havethese spreadsheets been all my life?"
(17:00):
It's so true though.
It's so true because I completelyresonate when you said itu wasn't
that you stopped loving merchandising.
It was just you didn'tdidn't want to do it in that.
And that's certainly how I felt.
Like I absolutely loved.
You know, I loved my team.
I loved the work.
Absolutely loved it.
But just the politics and someof the other aspects are just.
The push and pull.
You know, you want to do this,someone else wants you to do that.
(17:22):
And you're like, hmmm.
Or the blame.
The blame.
Someone always had to takethe flak for something.
And it was so like, canwe just not move on?
Can we just like, that's been done now?
We can't do anything about it.
Let's move yes on.
No, I get PTSD at this.
(17:44):
Let's talk about small businesses.
So what's really fascinating andI'd love to hear your perspective
is when you think about the way thatwe're trained and drilled in stock
management, and then you come inand you work with small businesses.
What do you think is the biggestdifferences about the ways that small
businesses think about and deal withtheir stock compared to big businesses?
The biggest thing I've noticed isthat when I sat down with all my
(18:05):
clients, like the first thing is likehow reactive they are to their stock.
So it's like anything they do withstock in terms of what they buy.
What they're putting out, likemaybe what they put in windows.
It's very reactive.
It's based on like what they'reseeing on the shop floor.
And it's very much like whatthe customers are buying.
(18:26):
Which obviously is theessence of merchandising.
You're looking at what is actuallyselling, but then it kind of stops.
There aren't any real processesput in place, apart from this
is what I would like to buy.
Maybe they look at what they sold lastyear and they kind of like come up with,
I think I'm going to buy this, this, this.
But there's no, the difference withmerchandising in big corporate companies
(18:46):
is like you say, there's a whole teamjust to look at the figures, to dissect
the figures, to analyze the figures.
People in that, because their role is tokind of like make sure that stock is as
productive and as profitable as possible.
But when I speak to my clients,they're all amazing at what they do.
But when it comes to this side ofthings, like data analysis, most of
them say to me, "I hate spreadsheets."And I'm like, "oh." and I'm like, okay,
(19:13):
because numbers isn't for everyone.
But it's such like, because they'reamazing because they do everything.
They work on a shop floor, they'reputting things online, they're sending
out their emails, they're orderingwhat they're doing all these things.
But it's like the one thing that they'remissing is the merchandising bit.
And it's because some of themaren't comfortable with numbers.
And I totally get that, because numberscan be scary if you don't know how
(19:35):
to manipulate them the right way.
So for me, it's just more of a case,not that they're not capable of, I think
it's just like we went and learned.
I did fashion and merchandisingat London College of Fashion.
I learned there.
And then obviously when know whenyou start offering merchandising,
you go through the ranks, don't you?
They teach you.
yes.
You learn.
It's so when I speak to these girlsand it's like, and they get frustrated.
(19:58):
Like, I dunno why I'm not doing it.
Like, I just don't like the numbers.
And it's like, listen.
You don't just know this stuff.
Like I don't know this stuff.
Catherine doesn't know this stuff.
We've had to learn how to do this.
So I don't want you to like puttoo much pressure on yourself or
you think you're not doing enough.
This is a part of a businessthat hardly anyone talks about.
(20:20):
Like being a small business.
You know, I follow so many peoplethat have their own small businesses
or coaches or things like that.
And when people are talking about sellingtheir products and their brand they talk
about so many amazing things they can do.
Talking about how to sell, howto market, all this sort of stuff
but when it comes to talking aboutwhat actually make a business grow.
Like the backbone of your business isunderstanding your numbers, understanding
(20:43):
what your stock is actually saying.
And I think that's the maindifference is that these women are
so passionate, they're so amazing,their businesses are fabulous.
But they just haven't understood thathow much power is in understanding
what their stock is saying.
And it's just because they'renot comfortable or confident
enough to understand lookingat numbers, what they mean.
(21:03):
And that's kind of what thestock doctors are doing.
It's like obviously, I'm tellingthem and giving them my advice.
But I also, it's very importantthat they understand why I'm
coming up with a numbness.
Like what?
Why have I come up with that?
What is this variable sayingthat is helping me tell you that
this is what you should be doing?
So I think that's the maindifference is that they'll
wonder at doing everything else.
It's just something thatpeople don't really talk about.
(21:24):
You talk about it, like you're thefirst person I've ever come across
that talks about merchandising.
And all the people that Ifollow, there's no one else does.
They talk about how to doall these other things.
But I'm like, you can do all those otherthings, but they can only take you so far.
If your product isn't right, or youdon't know how to manage it, then how
can you grow as far as you'd like to go?
But some of these businesses, someof these clients I work with, they've
(21:45):
done a fantastic job without it.
Like to this point.
But they've got to the pointnow where they, you know,
they've got too much stock.
Or they're not buyinginto the right thing.
It's like you're never goingto be able to grow that extra
20-30 percent on that next year.
If we're not dealing withwhat you've got here.
Yeah.
No, completely.
I know, I completely agree.
And I think that it issuch a crucial part of it.
For a product business, one of theissues is that lots of people give
(22:07):
business advice, which is moreservice based business orientated.
And we both run servicebusinesses, so you know that it's
very different kettle of fish.
Oh, it's completely differentin like, there's so more in
product business as the service.
I feel like they do the service,but because they also do the
selling and the email marketingand all that sort of stuff.
But the product is, there is somuch more you have to do with
(22:30):
product because it's actually there.
It's tangible.
With our service businesses,it's an intangible thing, so it
doesn't have, it has a cost to it.
But not the same way as acost as an actual product.
Yeah, yeah.
And it's a big cost.
Your biggest business costusually is your stock.
And I think for me one of the biggestbusiness differences as well is that in
a big retailer, there is a hard limit.
(22:51):
You've got your stocklimit, and then that is it.
If you've said you're gonna have 52million pounds worth of stock at the
end of March if you've got 55 millionpounds worth of stock, there's a problem
So, you know you have to deal with it.
You said if it's not working,you've got to deal with it.
You can't just keep bringingmore stock in instead whereas.
Of course, small business owners.
A lot of the time they're notworking from that perspective.
(23:12):
They're like, "oh well if I buy thisother thing then maybe it'll sell."
Or you know, "I just love that.
I just want to buy it.
I want to bring it in," but theydon't realize, there's a reason that
there's stock limits in a big retailerand it's because to keep costs under
control and to keep that managed andkeep the bottom line ticking over.
Yeah, and get cashflow.
Get the cash flow.
And that's the thing with these smallbusinesses, they want better cashflow.
(23:33):
And it's like, you're gonna get better,you're gonna get better cashflow if your
stock is as productive as it can be.
If your stock isn't, if you're sitting onall this stock and you're like, "well, I
don't have the money to spend," but yourstock isn't moving, we've got an issue.
So it's one thing.
And I think what they do is that theyknow their business, they know what sells.
But I think teaching them and makethem understand about, you can like
(23:55):
things and you can see what's selling.
But it's really understanding like, whatis it that my customer wants for me?
What is driving my top line?
What is it that I need to be,what I need to be focusing on?
And then the flip sideis what isn't working?
What can I do to keep this moving?
How can I get cash out ofthis stock that isn't working?
What is the best stepsfor me to move forward?
Cause you have to keep it likeyou're saying before, it's
(24:16):
all about just moving forward.
It's always about movingyour business forward.
And if you've got stockthat isn't working.
And you're not doing anything aboutit, it's going to always be there.
It's always going to be aproblem if you don't face it.
And I've seen with my clients, assoon as we started resolving it, the
relief they have like, "Oh yes, okay.
I don't ever want to see that again.:
(24:37):
We've got rid of it now.
Let's move on to the next thing.
I was like, yes, exactly.
Let's get excited about the new things,the things that we know are going to work.
You've learned that lesson.
You tested out, didn't work out.
Let's move on to the next best thing.
Yeah, amazing.
Make money.
Let's make money.
Yeah, absolutely.
That's the thing I would say,merchandising is about how to creative
ideas make money basically, isn't it?
(24:58):
You know?
So yeah.
So talk us through some of the kindof biggest light bulb moments you feel
like clients have had in Stock Doctor.
I think One of the main thingsis understanding that promotion
or marking down isn't a poorreflection of your business.
Mm.
So we had, obviously we'vehad Christmas recently,
Yeah.
(25:19):
There've been a few of my clients.
They've had some great last sixmonths and their sales have grown.
But when you actually look attheir stock and look at where
the stock is sitting, there was afew areas for some of my clients.
Like this is an issue.
I don't know if we can go into the next,like if you want better cashflow, we're
going to have to deal with this stock now.
Because otherwise we're going to keepon building your stock up and you're
(25:41):
going to be sitting on this stock.
So, and I remember having a fewconversations like, "Oh, you know,
I just feel like marking down islike, people are going to think that
my business isn't great or there'ssomething wrong with my business.
And I'm like, but every high streetdoes a markdown, but we don't?
I still go shopping Zaraand they've got, you know.
And what I did this year when overChristmas on my clients is I actually went
(26:04):
look, "I know it can be quite daunting.
You've got so much product.
Let me just have a look at your product.
Let me just put together a list of thingsthat haven't sold in the last three
months and things are really, really slow.
I'm not going to tell you thatyou have to mark it down, but I
want you to look at these productsand be honest with yourself.
Do you want to keep these items full pricein your business going forward next year?"
(26:24):
And the feedback was like, I havenever done that exercise before.
It was so cathartic toactually say, do you know what?
I know that's ticking alongand it does make some money.
But it's not really doingwhat I need it to do.
So I'm quite happy to take off20-30 percent off at Christmas, get
rid of it, and bring something in.
And that to me, seeing that light bulbmoment for them, and then actually
(26:45):
realizing it's not a reflectionof how bad your business is.
It's a reflection of you being a greatbusiness woman or person and doing
the right thing for your business,so that you can bring in more stock
in so you can make better sales.
I feel like it's the same.
I know what it's like.
When I put out, say, a service andI don't get that much uptake for it.
(27:06):
So I put out a course and I don'tget many people sign up for it.
You take it personally.
You go, "Oh, I didn't do very well.Like I must be doing something wrong."
You get really personal about it.
But at the same time, the rightanswer is like, "well, it didn't work.
Let's do some market research.
Let's look into the figures.
Let's talk to people.
Let's see what people want.
Let's give them something that theywant." It's the same with products.
If your figures are sayingsomething hasn't sold, no
(27:27):
one has wanted to buy this.
It's been sat in the middle of your shopfloor for three months and you sold zero.
Then why the hell are younot going to mark it down?
But also like talking aboutselling and be like, you want
people to buy this product now.
So you need to tell peoplethat you are on sale again.
Do not be ashamed of beingon sale or promoting.
It's fine.
You know, it's that light bulb momentof them actually understanding.
(27:49):
It's like, this isn't a reflectionof you doing something wrong.
This is a reflection of you,like managing your stock and
moving in the right direction.
And seeing them do that with confidencehas been great because you can see
that they cleared that stock out.
They've got now cash tobuy more exciting things.
And now we're looking at howthose things are performing.
And they are.
So it's like, great, thatwas a good decision for you.
(28:11):
But I said, you don't have to do this.
This doesn't have to be big every year.
It's just at this point.
You're in a bit of a stock situation.
Let's look at it.
Let's move on.
And now this year we can focuson bringing more fresh, exciting
things for your business.
Cause that's what I also, I thinkit's another light bulb moment is
that some of these stores will haveproduct they've had for a long,
long time because it does sell.
But I always say, I know that if Iwalk into a store, I don't want to
(28:34):
see the same stuff all the time.
We need to bring newness in.
Yes.
It's about having that balance of and Ithink that's another light bulb moment.
Like I say to my client, like part ofyour business is having core lines,
things that you always have all yearround, and they do really well and
they take certain amount of money.
But it's also important to spendyour money on things that are going
to be exciting for your clients.
They're going to want to come intoyour store, see what's going on.
(28:56):
I think those two things for me, thetwo things is like, understand that
promotion is not harming your business.
If you need to get rid of thestock, if it's not working.
And if it's targeted, cause that'sthe real key thing, isn't it?
It's like if people run 20, this is whyI'm not a fan of these blanket promotions.
Like 20 percent off everything, you know?
Okay.
Fair enough.
If you're doing it once or twicea year, it's like your big push.
(29:16):
But generally speaking, youwant to use your discount to
shape the customer behavior.
So you want them to be buying thethings that you know aren't selling.
Rather than just letting them takewhatever they like at 20-30 percent off.
Oh, absolutely.
Yeah yeah.
It's not about marking down everything.
It's like marking down the stock.
That's the thing.
That's what I've alwaysdone with all my businesses.
Like I'm never going to markthings down that are working.
(29:38):
Why would I?
But if something's sitting onyour shop floor, like you say,
it's a targeted promotion.
So that you're getting peopleto buy into something that maybe
hasn't really worked for you.
But then you're bringingthat cash that that stock is
releasing the cash flow for you.
So that you can then go andspend things on the things that
are selling really, really well.
And it's that nice cycle, isn't it?
Yes.
(29:59):
Oh, well, thank you so much, Paola.
I feel like we could keep goingbecause I've really, really enjoyed
our conversation, as always.
I always enjoy chatting.
But thank you so much.
I mean, yeah, you do amazing workfor the Stock Doctor clients.
It's fabulous having you on board.
And do you want to just kind of finishoff by saying like, what are some of
your favorite things that you enjoyabout working with small businesses?
I think my favorite thing is justlike, I know exactly what it feels
(30:21):
like to be a small business owner.
I know how many hats we're wearing,I know how many plates were spinning.
And I know how sometimes it can be quiteemotional at times and I know being a
service provider that sometimes you justneed someone in your corner to help you.
And like I say, merchandising is so keyto helping a business be successful.
So for me, being that person for theseamazing business owners that have these
(30:44):
fantastic businesses and actually just, Iguess it's enhancing what they're doing.
Do you know what I mean?
It's enhancing what they'redoing and seeing for me, it's the
confidence that I see in them.
It's the energy that theyhave at the end of every call.
It's a t the end of every call, wehave tasks that we give the owners
for them to go away to do things toenhance their business and they're
just so on it and they're excited.
(31:06):
And they can't wait, you know,and every month they want to
know like, how did this do?
How did that do?
And it's like, you can seeit's like a whole, it's a whole
different energy rather than buyingstuff that they want to sell.
It's like, they understandthat they can understanding.
They can see the science that's kindof going into it, but it's not boring.
It's exciting.
And I love, and that's like the mostexciting feels so much more fulfilling
(31:29):
to help a small business owner thanthese corporate people, because I
feel like what the corporates do.
Yeah.
They've got it down.
And it's like, I just wish morepeople knew that they could take
what these big corporates do andapply it to their small businesses.
And also they could be assuccessful as they want to be.
And I just love being that person that cankind of share that knowledge with them.
(31:50):
Thank you so much for tuning in.
If you want to find out moreabout Stock Doctor then head
over to resilientretailclub.
com and click on the Stock Doctor page.
You can find out all about how youcan have somebody like Paola in
your business helping you get togrips with your business numbers.
And making really greatcommercial decisions that move
you forward and save you money.
And if you have a moment to likeor follow the podcast, depending
(32:12):
on which platform you're on.
Then you'll be the first to knowabout each new episode when it
comes out on a Thursday morning.
See you next week.
Have you ever wondered what it's likebehind the scenes of a big retailer?
(00:04):
If you've ever wanted to know moreabout the way that big retailers
think about stock, then you won'twant to miss today's episode.
Hi, I'm Catherine Erdly.
I'm the founder of the Resilient RetailClub and your host in today's podcast.
I'm also joined by Paola Maggiulli.
Paola is one of the Stock Doctors thatworks with me on my Stock Doctor program.
If you want to know more about thestock doctor program, then do head
over to resilientretailclub.comand check out the information.
(00:28):
Paola has been working with me since lastyear and she also shares a very similar
background to me in terms of the factthat she worked for big retailers for many
years before starting her own business.
And I'm really excited for today's talkwhere we delve into the true secrets
behind the scenes, what it's likeworking for a big retailer, why Paola
is so passionate about working withsmall retailers and the differences
(00:48):
between how big retailers and smallretailers think about their stock.
Welcome to the Resilient Retail GamePlan, a podcast for anyone wanting to
start, grow or scale a profitable creativeproduct business with me, Catherine Erdly.
The Resilient Retail Game Plan isa podcast dedicated to one thing,
(01:11):
breaking down the concepts and toolsthat I've gathered from 20 years in
the retail industry and showing youhow you can use them in your business.
This is the real nuts and bolts ofrunning a successful product business,
broken down in an easy, accessible way.
This is not a podcast about learninghow to make your business look good.
It's the tools and techniques that willmake you and your business feel good.
(01:35):
Confidently plan, launch, and manageyour products, and feel in control of
your sales numbers and cash flow to helpyou build a resilient retail business.
Paola, thank you so much forjoining me on the podcast.
I'm super excited for our chat today.
(01:55):
Do you want to start offby introducing yourself?
I will, thanks for having me.
So my name is Paola Maggiulli.
I am one of Catherine's stockdoctors and I have got 15 years
in merchandising experience.
From everything from like I met myfirst merchandiser department was shoes.
(02:16):
Moved on to like luxury suits,I've done menswear, I've done
womenswear, I've done what else?
I've done like jewellery to likesofas, I've done everything,
I've done absolutely everything.
Amazing.
I thought it'd be great to have youon the podcast because obviously I've
talked about Stock Doctor a lot and we'vehad some of our fabulous clients on.
(02:36):
And what I thought would be reallyuseful was for people to understand
a little bit more or find out moreabout who are the stock doctors?
And you are the original!
And I thought it'd just be worthwhile,just sort of have a general chat
about merchandising because often Ifeel like I don't know about you, but
certainly when I worked in merchandisingthen, no one ever knew what it was
(02:58):
I don't even think my parents evennow know what I used to do back in
the day when I worked for corporate.
It's like, what does she do?
She works in fashion,but what does she do?
Actually no, it's likeChandler being in Friends.
You know, Chandler works in whatever,like, but what does he actually do?
Like, no one understands.
And he's also in data analytics, he wasin data analytics, analytics in Friends.
And I always feel like, it's alwaysquite interesting how that part, no
(03:20):
one really understood or understandsI think when I even start to think
about working in the fashion industry,I want it to be a buyer or a designer.
And then I actually, when I looked intoa little bit into it and because I was
so good at maths, especially statistics.
I was like, " I think I'm actuallyprobably better at this." I leave the
creativeness to my crazy outfits andactually I'm really good at numbers.
(03:46):
It's funny because it'sthe same thing with me.
So basically my story about how I gotinto merchandising, which we'll go
into a little bit more about what itis for the purposes of the listeners.
My degree was international business andI graduated and I was at the University
of Warwick and they would have allof the like graduate programs come
around and interview you for GoldmanSachs or all the consulting firms.
And I didn't get any of those.
(04:08):
And left and I went traveling and I cameback and I was like, what do I want to do?
I don't know.
And then I thought, "Oh, you know,I've always loved retail." I'd
always worked, that was alwaysmy Saturday jobs, my summer jobs.
That was all shop floor and I was like,"I really like retail," but I knew I
didn't want to be on the shop floor.
And I knew I didn't want to be likean area manager or district manager.
(04:30):
Because I mean, those people,they are so hardworking.
They really, really are and theywork really obscene hours as well.
They work so hard.
I remember every time we used to go onstore visits, I'd be like, how do you
cope without easy access to a kettle?
Like in an office, you get soused to having your cups of tea
all the time and they would justbe on their feet for hours a day.
(04:51):
So I was like, I don't want to do that.
But I liked the idea of retail andwhat I've always loved about retail
and still do is that it's so tangible.
You know, it's things that we allrelate to, it's buying and selling
things that we all relate to.
To be honest, I didn'teven know what I Googled.
I think I just googled, like jobsin retail or something like that.
And then it came up with merchandisingand all these years later, I
(05:12):
remember exactly what it said.
It said merchandising, youwork with the creative teams.
So it's good to have an interestin product, but effectively you
are analytic and you do strategicwork and look at more long term.
A s soon as I read it, I was like, yeah,that sounds actually absolutely perfect.
And that was it for like 17 years.
Then I did 17, 18 years in variousdifferent roles in merchandising.
(05:33):
I think about two weeks later Igot my first job in merchandising.
Yeah, so it's exactly like yousay, it's like the creative bit,
but you don't have, cause I 'venever done any creative subjects.
So I was always like, well, being abuyer sounds fabulous, but I don't
have any background in design.
I always thought I'd be a buyer.
And actually throughout my 15 years in thecorporate life I did do a role once where
(05:53):
I was actually a buyer and the merchandiseand that was for luxury branding.
So I got insight into that.
Which is all, which is all I thinkit's been quite useful especially.
Doing this stuff with you is thatI've done both sides as well.
And I can see like how people can comeat it from a creative point of view.
But the end of day, the numbers say a lot.
But yeah, I've always beenreally good at math at school.
I was always really good.
I mean, it didn't sound like the mostexciting, like telling my friends,
(06:15):
oh, we're going to work in fashion.
It's like, "Oh, what are you going todo?" I was like, "Oh, I'm going to work
in merchandising." And they're like,"What's that?" And some of them thought
it was like visual merch, so theythought I was like dress the windows.
Like no, it's to do with the numbers.
In the first couple of years inmerchandising, it's very admin based.
But it is such a good insight intohow accurate your information needs
to be and like the information youneed to actually pull the analysis
(06:37):
required to make these decisions.
So it's very spreadsheet heavy.
But if you're a spreadsheetlover, we absolutely love it.
Like it's an absolute dream to justkind of like get stuck into the numbers.
I sometimes think that was one ofmy favorite jobs was my first couple
of jobs in merchandising because atthat point it was like allocation.
So you basically, you sat and theywere like, here's all this stock coming
and you had to physically allocate it.
(06:59):
And by that, I mean, go intothe system and type in numbers.
Like that store gets seven and that storegets eight and that store gets, you know.
Like was, it was somethingreally satisfying about it.
Was like doing a number puzzle.
Cause then at the end, you'd be likebalancing it all out and who got the
size runs and all this kind of thing.
It was like a strangely satisfying.
I think worth just sayingthen for anyone listening.
(07:20):
The way I usually describe it is in a bigretailer, there are three product teams.
There's the buying team,there's the design team.
Most people kind of get what they do.
The design team is the creative force.
The buying team, they're commercial.
They make the ultimatedecisions about designs.
And then they do all thework with the suppliers.
And then merchandising is how muchyou're going to buy, when you're going
to buy it, when do you bring it in,how much you're going to sell it for,
(07:41):
what's your profit margin got to be?
But then also kind of like takingcharge of it as soon as it hits.
And then like, where's it going?
What's happening with it?
If it's not moving, are we discounting it?
And putting very much from likethe numbers analytics side.
So if we're sitting in a productdevelopment meeting, you know, I
wouldn't necessarily say, "Oh, Idon't like that. Or I don't think
(08:02):
that's fashionable or whatever."
No, you couldn't.
No, you couldn't.
You couldn't have.
The merchandiser really couldn't.
But sometimes you could say,interestingly enough, when I look at
the numbers, like we haven't sold greendresses for thee six years in a row.
Just putting it out there.
Yes, there was always a wayto put your point across.
(08:25):
Exactly what you said.
It's basically as soon as theproduct comes into the business.
It's the merchandiser's jobto basically look after it and
make the most money out of it.
It's basically about being asproductive as possible and making
sure that the stock is as profitable.
And if it does work, great.
Work toward building on that.
And if it doesn't work, then whatare you going to do about it?
You know, we weren't allowedto like leave the stock.
(08:46):
It doesn't work because, "Oh, itdoesn't work. Sorry about that."
That our job was to like manage it.
Also like for me, like with mylast job, my work to Anthropologie.
That was my last job,worked seven years there.
It was quite good there because I startedworking there within the first two years
that they opened the European office.
So it was kind of like, giventhe opportunity, just kind
of like own my own business.
(09:07):
It was like the first time thatI wasn't being told strategy.
But it was also like, because thehead office was in America and
our offices are just open London.
It was like, okay.
Well, you guys need to also workout like how it works for you guys.
So I remember when like things weren'tworking, you know, we had to work directly
with the PR team, the marketing team, theretail team, you know, the online team.
And be like, okay, these thingsaren't shifting at the moment.
(09:28):
What can we do beforewe go and mark it down?
Could we do somethingelse to help manage it?
That's also like another element of it.
It's great when this productsworking and it's selling.
It's like yay, brilliant.
This is a great bestseller.
But you know, merchandising is alsoabout dealing with the stock that
doesn't work and how to kind of likenot kill the bottom line, basically.
And try and make as much moneyout of it as possible, but
(09:50):
without completely killing it so.
And also learning to go forward so thatyou don't make the same mistake again.
Exactly.
And it's like taking thatanalysis, taking that history.
Doing those sort of like strategyproduct meetings when you're building
up your next season and going like,it's looking at what works, but
also remembering what didn't work.
So you don't make thoserepeated mistakes again.
All good times, all good times.
(10:12):
And so tell us a little bit aboutyour journey, 'cause you have your own
small business as well, so you're not astranger to the world of small business.
I am not.
I'll tell you what, though.
It was quite interestingwhen I was thinking about it.
So obviously I have my own small business,which I'm going to touch on in a minute.
Like exactly what I do, aswell as doing Stock Doctor.
But my dad used to have anItalian deli for 20 years.
(10:33):
And actually my small businessis in Italian food and cooking
and that side of things.
But I remember I would have togo and work on the weekends.
Like I used to really, really hate it.
But one of the things my dad used toget me to do was to count the stock.
So we would have to, especiallylike after the weekend.
So I had to do my gap year with my dad.
And on a Monday morning, I wouldhave to go on every single stock
(10:55):
shelves and I would have to count.
How many we had.
I had to basically fill up theshelves, tell my dad how much, so if
the box was empty in the stock room,we knew that I had to reorder it.
So it's basically, I was doingstock management from the
age of like, God knows, 15.
But yeah, I rememberdoing, I used to love it.
I didn't really like selling so muchbehind the deli, but I used to love
helping my dad like rearrange theshelves, bring the deliveries in.
(11:17):
Making sure that all the stock wasout and all that sort of stuff.
Yeah, so my dad had a deli andthen basically from that, obviously
I've mentioned I was in corporatemerchandising for 15 years.
And then I had decided that I alsohad this insane passion for cooking
and Italian food and things like that.
And so for the last 16 years, I'vealso been managing a small business.
(11:39):
Which is basically, it'snot just a cooking school.
It's like teaching people to take bettercare of themselves through cooking.
Mm.
I understand, especially, I'm surelots of people that are listening to
this, they probably don't even havetime to take care of themselves.
But I talk about the importance ofhaving to take care of ourselves so that
we can actually go on and be better atall the things that we want to achieve.
(11:59):
And all the goals that we want to hit.
So I understand exactly, it'scrazy because I went from a
corporate world, where you knoweverything's very structured.
And then I started this businessand I'll tell you from the
beginning, it was not structured.
I was like, what am I doing?
How am I promoting this?
What do I need to do?
And like over the years it's beena journey, but I know exactly like
(12:19):
going from corporate and workingfor someone else who basically
pays your paycheck every month.
And making millions for other peopleto then creating a business when
you're making money for yourself.
Yeah.
The journey has been wild.
I've got so much experience onrunning like big businesses.
From luxury to high streetlifestyle brands, I've done it all.
(12:41):
But even when it's your business,even though you have all the
intention to keep a level head,you can get so emotional about it.
You want things to work.
You want things to succeed.
You know, when I was in merchandising,my job was just merchandising.
I didn't get involved in the marketing,the PR, how things looked online.
My job is doing all of that.
So I've had to take what I've learnedin my corporate world, put it into my
(13:03):
small business and I'm still learning.
Like it's still things that Ifeel like I could be doing better.
But I think that's the beauty of smallbusiness is that actually you have
the say to say, "this isn't workingfor me, let me do something else."
Let me go into another direction.
When I left the corporate worldof merchandising, shall I say.
It wasn't because I didn't enjoymerchandising, I just didn't enjoy
doing it for corporates anymore.
It didn't feel very fulfilling.
(13:23):
Making millions, millions forthese companies, millions.
I cannot tell you.
You know, like I work in Anthropologie.
I had the second biggest, Iworked on home ware furniture,
so it wasn't the biggest area.
Women's wear is, but it still mademillions a year and to think you put
all the effort in, all the hours inand I was like, but it just felt quite
(13:46):
felt quite thankless after 15 years.
It was like, I feel like Iwant to do something else now.
So I've taken, even though obviously it'scooking, but you have to take some of
those skills that you learn from there,like even like pricing and managing my
costs and all of that sort of stuff.
It's all part of running a business.
You can't run a business if you don'tknow how much things are costing you.
(14:06):
Right now, I do Stock Doctor,which I absolutely love and adore.
Like it's reignited mylove for merchandising.
But then it also remindsme like the people that.
It kind of is quite a good insight forme, I'm seeing the women that I kind
of would love to work with me alsoon the cooking side because I see how
hard they work and it's like, Oh myGod, you're doing such an amazing job,
but are you taking care of yourself?
Are you eating well?
Sometimes I'm like, sometimesI'm like, have you had dinner?
(14:29):
Have you had lunch today?
Because I kind of go into likeItalian caring mother mode of like,
are you taking care of yourself?
Are you eating well?
Because I know from my experience,like how important it is self
care is to take care of yourself.
I know how many people plateswere spinning and how many hats
were wearing every single day, so.
It's so true.
No, I completely agree.
(14:49):
And I think as well, I think the thingis that behind a lot of these very brands
that look so lovely and warm and fuzzy.
Or are really desirable fromthe outside, like a lot of
corporate retail is really toxic.
I have to say, when I startedat Anthropologie it was lovely.
I really loved it.
(15:09):
It was really, it wasrun by all the heads.
Like all the main heads,should we say like the CEO, the
head of design, the head PR.
And we talk about the US, they wereall run by women and I loved it.
I loved it.
I loved how this bigcompany was run by women.
And then over the years.
Yeah, things changed.
And I was a bit like, but it was great.
(15:30):
To be honest, it was one of thehardest places ever worked up, but it
was my favorite because of how muchautonomy I had in running my business.
And it was very successful.
I'm very proud to say that Itook homewares to a different
level in my seven years there.
I started on accessories for two years andthen I did homeware for five and a half.
And I'm just so proud of like meand my buyer and our team that we
(15:54):
had, because we had like 10 peoplethat we were managing or more.
I think it was I think it was like 12,14 people were managing towards the end.
Got this area just everyone alwaysalways say to me Anthropologie and
they really think about the women'swear, they think about the home wares.
That's so true.
But yeah it's good times.
Good times but it's lovely workingfor, like you say, aspirational
(16:17):
brands and small businesses.
And helping them see that there'smore to you know, there's so much
more they can actually do to theirbusinesses and help them grow that.
Yeah, I think as well.
I was talking to somebody about theretail industry and we were saying how
hard it is and how toxic it can be.
And then I was like that's thebeauty of small businesses.
It's not easy, but my goodness, thepeople are so amazing and so passionate
(16:40):
and it's just such a differentexperience working with small businesses.
You know, it's why I absolutely love it.
Yeah, same.
I'm so glad that you reached out becauseI didn't think I'd ever go back into it.
And then as soon as like I had myfirst couple of clients, like, "Oh my
god, where have you been? Where havethese spreadsheets been all my life?"
(17:00):
It's so true though.
It's so true because I completelyresonate when you said itu wasn't
that you stopped loving merchandising.
It was just you didn'tdidn't want to do it in that.
And that's certainly how I felt.
Like I absolutely loved.
You know, I loved my team.
I loved the work.
Absolutely loved it.
But just the politics and someof the other aspects are just.
The push and pull.
You know, you want to do this,someone else wants you to do that.
(17:22):
And you're like, hmmm.
Or the blame.
The blame.
Someone always had to takethe flak for something.
And it was so like, canwe just not move on?
Can we just like, that's been done now?
We can't do anything about it.
Let's move yes on.
No, I get PTSD at this.
(17:44):
Let's talk about small businesses.
So what's really fascinating andI'd love to hear your perspective
is when you think about the way thatwe're trained and drilled in stock
management, and then you come inand you work with small businesses.
What do you think is the biggestdifferences about the ways that small
businesses think about and deal withtheir stock compared to big businesses?
The biggest thing I've noticed isthat when I sat down with all my
(18:05):
clients, like the first thing is likehow reactive they are to their stock.
So it's like anything they do withstock in terms of what they buy.
What they're putting out, likemaybe what they put in windows.
It's very reactive.
It's based on like what they'reseeing on the shop floor.
And it's very much like whatthe customers are buying.
(18:26):
Which obviously is theessence of merchandising.
You're looking at what is actuallyselling, but then it kind of stops.
There aren't any real processesput in place, apart from this
is what I would like to buy.
Maybe they look at what they sold lastyear and they kind of like come up with,
I think I'm going to buy this, this, this.
But there's no, the difference withmerchandising in big corporate companies
(18:46):
is like you say, there's a whole teamjust to look at the figures, to dissect
the figures, to analyze the figures.
People in that, because their role is tokind of like make sure that stock is as
productive and as profitable as possible.
But when I speak to my clients,they're all amazing at what they do.
But when it comes to this side ofthings, like data analysis, most of
them say to me, "I hate spreadsheets."And I'm like, "oh." and I'm like, okay,
(19:13):
because numbers isn't for everyone.
But it's such like, because they'reamazing because they do everything.
They work on a shop floor, they'reputting things online, they're sending
out their emails, they're orderingwhat they're doing all these things.
But it's like the one thing that they'remissing is the merchandising bit.
And it's because some of themaren't comfortable with numbers.
And I totally get that, because numberscan be scary if you don't know how
(19:35):
to manipulate them the right way.
So for me, it's just more of a case,not that they're not capable of, I think
it's just like we went and learned.
I did fashion and merchandisingat London College of Fashion.
I learned there.
And then obviously when know whenyou start offering merchandising,
you go through the ranks, don't you?
They teach you.
yes.
You learn.
It's so when I speak to these girlsand it's like, and they get frustrated.
(19:58):
Like, I dunno why I'm not doing it.
Like, I just don't like the numbers.
And it's like, listen.
You don't just know this stuff.
Like I don't know this stuff.
Catherine doesn't know this stuff.
We've had to learn how to do this.
So I don't want you to like puttoo much pressure on yourself or
you think you're not doing enough.
This is a part of a businessthat hardly anyone talks about.
(20:20):
Like being a small business.
You know, I follow so many peoplethat have their own small businesses
or coaches or things like that.
And when people are talking about sellingtheir products and their brand they talk
about so many amazing things they can do.
Talking about how to sell, howto market, all this sort of stuff
but when it comes to talking aboutwhat actually make a business grow.
Like the backbone of your business isunderstanding your numbers, understanding
(20:43):
what your stock is actually saying.
And I think that's the maindifference is that these women are
so passionate, they're so amazing,their businesses are fabulous.
But they just haven't understood thathow much power is in understanding
what their stock is saying.
And it's just because they'renot comfortable or confident
enough to understand lookingat numbers, what they mean.
(21:03):
And that's kind of what thestock doctors are doing.
It's like obviously, I'm tellingthem and giving them my advice.
But I also, it's very importantthat they understand why I'm
coming up with a numbness.
Like what?
Why have I come up with that?
What is this variable sayingthat is helping me tell you that
this is what you should be doing?
So I think that's the maindifference is that they'll
wonder at doing everything else.
It's just something thatpeople don't really talk about.
(21:24):
You talk about it, like you're thefirst person I've ever come across
that talks about merchandising.
And all the people that Ifollow, there's no one else does.
They talk about how to doall these other things.
But I'm like, you can do all those otherthings, but they can only take you so far.
If your product isn't right, or youdon't know how to manage it, then how
can you grow as far as you'd like to go?
But some of these businesses, someof these clients I work with, they've
(21:45):
done a fantastic job without it.
Like to this point.
But they've got to the pointnow where they, you know,
they've got too much stock.
Or they're not buyinginto the right thing.
It's like you're never goingto be able to grow that extra
20-30 percent on that next year.
If we're not dealing withwhat you've got here.
Yeah.
No, completely.
I know, I completely agree.
And I think that it issuch a crucial part of it.
For a product business, one of theissues is that lots of people give
(22:07):
business advice, which is moreservice based business orientated.
And we both run servicebusinesses, so you know that it's
very different kettle of fish.
Oh, it's completely differentin like, there's so more in
product business as the service.
I feel like they do the service,but because they also do the
selling and the email marketingand all that sort of stuff.
But the product is, there is somuch more you have to do with
(22:30):
product because it's actually there.
It's tangible.
With our service businesses,it's an intangible thing, so it
doesn't have, it has a cost to it.
But not the same way as acost as an actual product.
Yeah, yeah.
And it's a big cost.
Your biggest business costusually is your stock.
And I think for me one of the biggestbusiness differences as well is that in
a big retailer, there is a hard limit.
(22:51):
You've got your stocklimit, and then that is it.
If you've said you're gonna have 52million pounds worth of stock at the
end of March if you've got 55 millionpounds worth of stock, there's a problem
So, you know you have to deal with it.
You said if it's not working,you've got to deal with it.
You can't just keep bringingmore stock in instead whereas.
Of course, small business owners.
A lot of the time they're notworking from that perspective.
(23:12):
They're like, "oh well if I buy thisother thing then maybe it'll sell."
Or you know, "I just love that.
I just want to buy it.
I want to bring it in," but theydon't realize, there's a reason that
there's stock limits in a big retailerand it's because to keep costs under
control and to keep that managed andkeep the bottom line ticking over.
Yeah, and get cashflow.
Get the cash flow.
And that's the thing with these smallbusinesses, they want better cashflow.
(23:33):
And it's like, you're gonna get better,you're gonna get better cashflow if your
stock is as productive as it can be.
If your stock isn't, if you're sitting onall this stock and you're like, "well, I
don't have the money to spend," but yourstock isn't moving, we've got an issue.
So it's one thing.
And I think what they do is that theyknow their business, they know what sells.
But I think teaching them and makethem understand about, you can like
(23:55):
things and you can see what's selling.
But it's really understanding like, whatis it that my customer wants for me?
What is driving my top line?
What is it that I need to be,what I need to be focusing on?
And then the flip sideis what isn't working?
What can I do to keep this moving?
How can I get cash out ofthis stock that isn't working?
What is the best stepsfor me to move forward?
Cause you have to keep it likeyou're saying before, it's
(24:16):
all about just moving forward.
It's always about movingyour business forward.
And if you've got stockthat isn't working.
And you're not doing anything aboutit, it's going to always be there.
It's always going to be aproblem if you don't face it.
And I've seen with my clients, assoon as we started resolving it, the
relief they have like, "Oh yes, okay.
I don't ever want to see that again.:
(24:37):
We've got rid of it now.
Let's move on to the next thing.
I was like, yes, exactly.
Let's get excited about the new things,the things that we know are going to work.
You've learned that lesson.
You tested out, didn't work out.
Let's move on to the next best thing.
Yeah, amazing.
Make money.
Let's make money.
Yeah, absolutely.
That's the thing I would say,merchandising is about how to creative
ideas make money basically, isn't it?
(24:58):
You know?
So yeah.
So talk us through some of the kindof biggest light bulb moments you feel
like clients have had in Stock Doctor.
I think One of the main thingsis understanding that promotion
or marking down isn't a poorreflection of your business.
Mm.
So we had, obviously we'vehad Christmas recently,
Yeah.
(25:19):
There've been a few of my clients.
They've had some great last sixmonths and their sales have grown.
But when you actually look attheir stock and look at where
the stock is sitting, there was afew areas for some of my clients.
Like this is an issue.
I don't know if we can go into the next,like if you want better cashflow, we're
going to have to deal with this stock now.
Because otherwise we're going to keepon building your stock up and you're
(25:41):
going to be sitting on this stock.
So, and I remember having a fewconversations like, "Oh, you know,
I just feel like marking down islike, people are going to think that
my business isn't great or there'ssomething wrong with my business.
And I'm like, but every high streetdoes a markdown, but we don't?
I still go shopping Zaraand they've got, you know.
And what I did this year when overChristmas on my clients is I actually went
(26:04):
look, "I know it can be quite daunting.
You've got so much product.
Let me just have a look at your product.
Let me just put together a list of thingsthat haven't sold in the last three
months and things are really, really slow.
I'm not going to tell you thatyou have to mark it down, but I
want you to look at these productsand be honest with yourself.
Do you want to keep these items full pricein your business going forward next year?"
(26:24):
And the feedback was like, I havenever done that exercise before.
It was so cathartic toactually say, do you know what?
I know that's ticking alongand it does make some money.
But it's not really doingwhat I need it to do.
So I'm quite happy to take off20-30 percent off at Christmas, get
rid of it, and bring something in.
And that to me, seeing that light bulbmoment for them, and then actually
(26:45):
realizing it's not a reflectionof how bad your business is.
It's a reflection of you being a greatbusiness woman or person and doing
the right thing for your business,so that you can bring in more stock
in so you can make better sales.
I feel like it's the same.
I know what it's like.
When I put out, say, a service andI don't get that much uptake for it.
(27:06):
So I put out a course and I don'tget many people sign up for it.
You take it personally.
You go, "Oh, I didn't do very well.Like I must be doing something wrong."
You get really personal about it.
But at the same time, the rightanswer is like, "well, it didn't work.
Let's do some market research.
Let's look into the figures.
Let's talk to people.
Let's see what people want.
Let's give them something that theywant." It's the same with products.
If your figures are sayingsomething hasn't sold, no
(27:27):
one has wanted to buy this.
It's been sat in the middle of your shopfloor for three months and you sold zero.
Then why the hell are younot going to mark it down?
But also like talking aboutselling and be like, you want
people to buy this product now.
So you need to tell peoplethat you are on sale again.
Do not be ashamed of beingon sale or promoting.
It's fine.
You know, it's that light bulb momentof them actually understanding.
(27:49):
It's like, this isn't a reflectionof you doing something wrong.
This is a reflection of you,like managing your stock and
moving in the right direction.
And seeing them do that with confidencehas been great because you can see
that they cleared that stock out.
They've got now cash tobuy more exciting things.
And now we're looking at howthose things are performing.
And they are.
So it's like, great, thatwas a good decision for you.
(28:11):
But I said, you don't have to do this.
This doesn't have to be big every year.
It's just at this point.
You're in a bit of a stock situation.
Let's look at it.
Let's move on.
And now this year we can focuson bringing more fresh, exciting
things for your business.
Cause that's what I also, I thinkit's another light bulb moment is
that some of these stores will haveproduct they've had for a long,
long time because it does sell.
But I always say, I know that if Iwalk into a store, I don't want to
(28:34):
see the same stuff all the time.
We need to bring newness in.
Yes.
It's about having that balance of and Ithink that's another light bulb moment.
Like I say to my client, like part ofyour business is having core lines,
things that you always have all yearround, and they do really well and
they take certain amount of money.
But it's also important to spendyour money on things that are going
to be exciting for your clients.
They're going to want to come intoyour store, see what's going on.
(28:56):
I think those two things for me, thetwo things is like, understand that
promotion is not harming your business.
If you need to get rid of thestock, if it's not working.
And if it's targeted, cause that'sthe real key thing, isn't it?
It's like if people run 20, this is whyI'm not a fan of these blanket promotions.
Like 20 percent off everything, you know?
Okay.
Fair enough.
If you're doing it once or twicea year, it's like your big push.
(29:16):
But generally speaking, youwant to use your discount to
shape the customer behavior.
So you want them to be buying thethings that you know aren't selling.
Rather than just letting them takewhatever they like at 20-30 percent off.
Oh, absolutely.
Yeah yeah.
It's not about marking down everything.
It's like marking down the stock.
That's the thing.
That's what I've alwaysdone with all my businesses.
Like I'm never going to markthings down that are working.
(29:38):
Why would I?
But if something's sitting onyour shop floor, like you say,
it's a targeted promotion.
So that you're getting peopleto buy into something that maybe
hasn't really worked for you.
But then you're bringingthat cash that that stock is
releasing the cash flow for you.
So that you can then go andspend things on the things that
are selling really, really well.
And it's that nice cycle, isn't it?
Yes.
(29:59):
Oh, well, thank you so much, Paola.
I feel like we could keep goingbecause I've really, really enjoyed
our conversation, as always.
I always enjoy chatting.
But thank you so much.
I mean, yeah, you do amazing workfor the Stock Doctor clients.
It's fabulous having you on board.
And do you want to just kind of finishoff by saying like, what are some of
your favorite things that you enjoyabout working with small businesses?
I think my favorite thing is justlike, I know exactly what it feels
(30:21):
like to be a small business owner.
I know how many hats we're wearing,I know how many plates were spinning.
And I know how sometimes it can be quiteemotional at times and I know being a
service provider that sometimes you justneed someone in your corner to help you.
And like I say, merchandising is so keyto helping a business be successful.
So for me, being that person for theseamazing business owners that have these
(30:44):
fantastic businesses and actually just, Iguess it's enhancing what they're doing.
Do you know what I mean?
It's enhancing what they'redoing and seeing for me, it's the
confidence that I see in them.
It's the energy that theyhave at the end of every call.
It's a t the end of every call, wehave tasks that we give the owners
for them to go away to do things toenhance their business and they're
just so on it and they're excited.
(31:06):
And they can't wait, you know,and every month they want to
know like, how did this do?
How did that do?
And it's like, you can seeit's like a whole, it's a whole
different energy rather than buyingstuff that they want to sell.
It's like, they understandthat they can understanding.
They can see the science that's kindof going into it, but it's not boring.
It's exciting.
And I love, and that's like the mostexciting feels so much more fulfilling
(31:29):
to help a small business owner thanthese corporate people, because I
feel like what the corporates do.
Yeah.
They've got it down.
And it's like, I just wish morepeople knew that they could take
what these big corporates do andapply it to their small businesses.
And also they could be assuccessful as they want to be.
And I just love being that person that cankind of share that knowledge with them.
(31:50):
Thank you so much for tuning in.
If you want to find out moreabout Stock Doctor then head
over to resilientretailclub.
com and click on the Stock Doctor page.
You can find out all about how youcan have somebody like Paola in
your business helping you get togrips with your business numbers.
And making really greatcommercial decisions that move
you forward and save you money.
And if you have a moment to likeor follow the podcast, depending
(32:12):
on which platform you're on.
Then you'll be the first to knowabout each new episode when it
comes out on a Thursday morning.
See you next week.
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