#15 Becoming a Retail Scientist Using Data, with Geoff Tease the VP of Client Success at RICS...

And the entire ecosystem behind it. How do we scale your company and do it with the balance and the happiness that we all seek? Let's hear from those insiders, experts and strategists that actually make it happen. I'm your host, Ashley Alderson from the.

Boutique Hub, and I can't wait to chat. They say that being successful in retail is a balance between being both an artist and a scientist. Many of us get into this business.

Because we love the allure of fashion and beautiful clothes and serving other women.

But to stay in this business, it takes being a scientist and digging into.

The numbers and the data and the.

Technology and all the things that make our business stay for years and years so strong into the future. Today we're going to be talking to Jeff Tease, who's the VP of client success for Rick Software, which is a point of sale and inventory management software for specialty retailers. That's you guys, boutiques, right? With a long history in retail at all sizes, with companies like Reebok and many more, Jeff brings such a wealth of knowledge to the table to retailers every single day, and he helps them to build both the art and the science sides the business. So what we're talking about today is really critical and help me here. I'm going to nerd out as I interview Jeff. Just be prepared because what we're going to be talking about is decoding the top five must use reports for retailers that you want to check into on a regular basis. We're going to be sharing with you how to use this data to provide a better customer experience, to have better team management, to have higher sales numbers, and most of all, better inventory management and smarter buying strategy for you every single day. So let's dig in. We're going to break down your sales strategy by vendor time period, staff member season, by customer profile, and by the end of this, you are going to have a whole new way to decode the data in your business. This episode is packed with how to's, so if you don't have a notebook, you might want to get one. All right, guys, I can't wait to hear what you think about this episode. So don't forget, please take a picture. Like let me know what you're doing while you listen to this podcast today and send it to me over on Instagram J. Alderson for a chance to be featured on our story. And of course I love to video chat with you guys over via Insta Story and in our Instagram DMs. Also, I want to remind you if you are headed to the 2018 Boutique Summit in Dallas this June, you're going to have a chance to meet Jeff in person. And I know after this episode, you're definitely going to want to. He's going to be there speaking and leading a breakout session all about data. So guys, without further ado, grab that notebook and let's talk to Jeff.

Hey guys, welcome to the show this week. We are so lucky to be joined today by a man with many years of experience in retail and from several different angles, I might add, both small and large. Jeff Tease is the VP of Client success for Rick Software, which is a point of sale and inventory management software specifically for specialty retailers. So right up your guys alley. I was actually lucky enough to join Jeff on a webinar a few weeks ago now to talk about data and the numerous ways that both retailers and wholesalers really can dig into their data and make those crucial daily decisions. And I'm hoping that today, with our time on the show, we can answer some of those most commonly asked questions about data for retailers and for those of you with all different comfort levels using software.

So.

So guys, please help me welcome Jeff to the show. Hey, Jeff.

Hey, Ashley.

I'm so glad that you're here. We've got a lot to cover today, don't we?

Yes, we do. And thank you having me be part of your podcast.

Absolutely. So one of the reasons I'm so excited that you're here today is not only are you joining me here, but our community is going to have an opportunity to hear you speak at the 2018 Boutique Summit in Dallas. And not only will you be speaking, but Rick's is also a host partner for the event. And I know some of our community may have also met you in Vegas when we had our Boutique Boss cocktail party with WWD Magic. So we've got a lot to cover and I know this is going to be a great stepping stone for people to hear about data, kind of get some questions rolling and then get to follow up with you one on one at one of our events.

Yeah, we're looking forward to being there.

Awesome. So let's get started with this. I know you're a book of knowledge in this industry, so I want to talk about Rick's, but before we do, let's talk about your background first and kind of how you you came to the company and your experiences in retail.

Sure. You know, I think probably like a lot of the people listening, I got started in the business because of an interest in the product and that really came from my sports background. Played basketball in college, and while I was in college, needed a little extra money. And so I started looking for a job. And getting into the athletic specialty industry seemed like a real easy connection for me. And I started working for a company called Foot X out of Dallas, Texas, in Valley View Mall, which I'm not even sure if it's still around, but started working for them. And it was a really interesting time. It's really the antithesis of what we're seeing right now. It was the. The heyday of athletic specialty, of mall business, the growth of retail space across the country. When I started with Foot Action, the company had 50 stores, and when I left, it had over 700.

Wow.

And it was really when the brands that we really know today were really starting to grow. Nike had just signed, Jordan had just introduced Air. And it was a different time, too, I think about the customer back then. There were a lot less distractions and a lot less pull on their disposable income. It was a little easier to sell product back then, to be honest with you. This was before iPhones, ipods, and everything else that kind of draws kids away from. From buying athletic product. But it was a time of a lot of growth, and so it was a great opportunity. I worked my way through the stores, was a store manager for three years, and eventually ended up in the home office as. As a footwear buyer and spent about five or six years doing that. Then I moved over to the planning side of the business, you know, and it's that art versus science. So I spent a lot of time on the art side of it. And then I moved over to the science side of it with the planning. And then from there I saw an opportunity to move from the retail to the wholesale side, and I moved over to Reebok and managed the strategic sales over there and had an opportunity to work with a lot of different retailers, a lot of different size retailers, a lot of different kinds of business, which was a great experience, which allowed me to leverage an opportunity to move over to Mizuno, who is a real specialty business, very focused on some specific products and businesses and channels that they sell to. And I spent a lot of time working with small independent specialty retailers. And through my time there, I eventually ended up as the VP of sales, and which led to some contacts and some conversations that I had with Jason Becker, the CEO here at Rick's. And he and I started talking about how retailers are using data and how to communicate that to retailers. And we kind of came to the same conclusion that Rick's needed someone that could speak to the retailer on retailer terms, but really emphasized the importance of data and using data to manage their business. And we, we came to that same conclusion and ended up Jason offering me a role here. And I've been here for about seven months now. Been at Rick's for about seven months. CEO here at Rick's. And he and I started talking about how retailers are using data and how to communicate that to retailers. And, and we kind of came to the same conclusion that Rick's needed someone that could speak to the retailer on retailer terms, but really emphasized the importance of data and using data to manage their business. And we came to that same conclusion and ended up Jason offering me a role here. And I've been here for about seven months now. Been at Rick's for about seven months.

Perfect. So what a good fit. Because isn't. And I want to ask you more about Rick's, but their background has a lot to do with those athletic specialty retailers. So what a good fit for you to know that market specifically to bridge that gap. But then like you said, speaking to retailers as a whole.

Correct, Correct. Yeah, yeah. And it's, and it's. It's a conversation that we have at Rick's around the value of data. And I think obviously you recognize that as well through the BTC hub. And then how do retailers recognize that data, use that data and use it to make better decisions?

Absolutely. So to hear more about Rick's. Rick's has been around for a number of years. Do you want to give us a little bit of background on that company? Because I know a lot of our listeners understand how important it is to access data and to use data, but sometimes they don't know where to go to get it or what they should be looking for. So I'd love to hear how Rick's kind of started in that area and where they are today.

Sure. Rick started in 1983. So we're 35 years old, which is really old for a software company, but we really consider ourselves a 35 year old startup. How we approach the business, how we approach the product and how we work with our retailers. But it started at a athlete's foot location in Iowa. The owner there recognized that he needed to be able to manage his inventory. He had a friend who had some programming skills and the guy put together a program for him which eventually turned into the Ricks software solution. We've gone through several different versions of that. We're on RICS 9 right now. But it really started in Iowa. The big change for us though was in 2012 we became Cloud based. We moved from being an installed service into a cloud based service, which has really opened up a lot of things for us, created a lot of opportunities in how we work with our clients. The good thing here is being cloud based. We are always on. We have almost 100% reliability. Last year we were, I think we were down for two hours. And that was because of Microsoft Azure, who hosts our cloud data. They had an outage, but outside of that, Rick's was 100% on for the year. But the really good thing about it being cloud based is it provides automatic updates. If you're using Rix, you're on the latest version, automatic. It also provides real time data and it allows a lot better connection to your customers, to the brands you work with, and really allows you to create a better omnichannel environment in your retail space. But we own, build and support the RICS solution. We don't contract it out. Everything we do around RICS is through Rick's here in our office. A really interesting feature of Rick's as well is that if you call our support team, they are all former retailers who have used Rick's. So pretty much anything you present to them, they've been through themselves.

That's really unique.

Yeah. And from a client base too. We're really focused on the kind of clients that you're working with as well. The majority of our clients are small to mid sized retailers that are in the footwear and apparel marketplace. That's really who we specialize. We do business with other retailers, but that's really where we, we put the emphasis for our client base.

So I know just a lot of the people who will be listening to this show, we have a really diverse audience of both online and offline stores and then a combination thereof. So can you talk about how point of sale solutions like Rick's can work in both of those realms, both with a brick and mortar storefront and with an online store like Shopify?

Yeah, it's interesting you bring that up too because just a lot of the.

People who will be listening to this show, we have a really diverse audience of both online and offline stores and then a combination thereof. So can you talk about how about.

90% of our clients right now are using Shopify as their solutions like Rick's.

Can work in both of those realms, both with a brick and mortar storefront and with an online store like Shopify?

Yeah, it's interesting you bring that up too, because e commerce platform. And we're seeing more and more of our new clients coming in with the expectation that there's an integration to an E Comm platform or they're starting their business with an E commerce business. So this is really important for a lot of the retailers and it's really important for us how we work with our reach. About 90% of our clients right now are using Shopify as their e commerce platform. And we're seeing more and more of our new clients coming in with the expectation that there's an integration to an E Comm platform or they're starting their business with an E commerce business. So this is Taylor's, but the system was built initially to be a brick and mortar inventory control system and that's really its primary purpose. But we have an open API. And for people that don't know what that means, API is Application Programming Interface. Basically it means it's how our system talks to another system and shares data. And because it's an open API, we're able to integrate with pretty much any platform is really important for a lot of the retailers and it's really important for us how we work with our retailers. But the system was built initially to be a, a brick and mortar inventory control system and that's really its primary purpose. But we have an open API and for people that don't know what that means, API is Application Programming Interface. Basically it means that a retailer brings to us, so we create that opportunity. But because we have that open API and we integrate so easily, we're able to transfer data back and forth on a real time basis. Means it's how our system talks to another system and shares data. And because it's an open API, we're able to integrate with pretty much any platform that a retailer brings to us. So we create that opportunity, which is really important. When you're creating that one seamless experience for your consumer. You want to have that real time data so that you're creating a really positive customer experience.

Absolutely. So someone who's listening, who may not be familiar with exactly what a point of sale solution does and what that looks like for their business. Again, whether they're on Shopify and have more of an online presence or brick and mortar. Can you kind of go back to the basics of this is our sole, not our soul, but really our core purpose. And this is how you not only track but begin to analyze your data. What does a good point of sale solution like Rick's, what is it that you offer that a retailer who has not used one before can understand how that would work in their business.

Yeah. So from a, from a core purpose of Rick's and it's kind of rest in my job title and my description as well. But our goal is to provide a solution that helps our retailers improve their business and make more money. That's our goal. That's what we intend our services and our product to do. And that's really how we interact with our clients. But from an individual peel, we have these conversations all the time with clients that are going through that evaluation process and some of the things we ask them are and some of the things we expect to have in a good POS system. And I think that retailers should be looking for, first and foremost, it has to allow you PO management information. It has to be a inventory control system and not just a cash register. Without that PO order management, you really can't keep a good handle on your inventory flow and manage that inventory. So that's got to be a key part of it. I think it also has to be able to provide you the quality of reports that you need to manage that business. You need to know your sales, vendor, performance, staff performance, inventory flow, tory flow and manage that inventory. So that's got to be a key part of it. I think it also has to be able to provide you the quality of reports that you need to manage that business. You need to know your sales, vendor performance, staff performance, inventory flow. And so a good POS should provide that for you as well, as well as providing an efficient and effective customer experience. So, and that that really. So a good POS should provide that for you as well, as well as providing an efficient and effective customer experience. So, and that that really applies to the experience that you have with a customer at the Cash Wrap. Is it a smooth experience as well as the experience you're providing applies to the experience that you have with a customer at the Cash Wrap. Is it a smooth experience as well as the experience you're providing your customer? Because you're able to take data in and then relay that back out through the reports and the decision to make, decision making that you do. And then I think probably most importantly, you have to have a POS that allows you to grow your business as your business grows. How does it do integrations? How does it provide connectivity? How does it, does it promote an omnichannel experience? Generally, the POS is one of the biggest investments outside of product that a, that an owner is going to make. And you want to make sure that you're investing in something that's going to grow with your business.

Absolutely. So when we were together last time, kind of piggybacking off of these key areas of business or support that you guys provide. The last time we were together, you talked about how a retailer each week should sit down and really analyze five key reports, five key pieces of information that their point of sale provides. Can you share what those five key reports are and then we can maybe talk in more specifics about each one and how retailers can take action having that data available to them.

From a RICS perspective, the best practices that we recommend to our clients are the five reports of sales analysis. Open ping your customer because you're able to take data in and then relay that back out through the reports and the decision make, decision make making that you do. And then I think probably most importantly, you have to have a POS that allows you to grow your business as your business grows. How do your grid analysis, which is your size, a customer detail report and then a salesperson analysis report. And those are on different cadences, but it's good to get on a cadence on a regular schedule. And how you manage those, those requisite DO integrations, How does it provide connectivity? How does it, does it promote an omnichannel experience? Generally, the POS is one of the biggest investments outside of product that a, that an owner is going to make. And you want to make sure that you're investing in something that's going to grow with your business.

Absolutely. So when we were together last time, kind of piggybacking off of when you.

Need to manage those reports.

Perfect. So let's talk about sales analysis first. That was the first one.

Yes.

What type of cadence do you recommend that they look at that report at and what are the key metrics in that sales analysis? Would you have them go after?

Well, the great thing about the sales analysis report in Rick's is it puts.

A lot of information these key areas of business or support that you guys provide. The last time we were together, you talked about how a retailer each week should sit down and really analyze five key reports, five key pieces of information that their point of sale provides.

Can you into one easily readable report, the key measures that you're going to look at your product performance and it's liquidation, turn your return on investment and then the markdown percentage. And you can look at that across vendor level, class level, share what those.

Five key reports are and then we can maybe talk in more specifics about each one and how retailers can take action Having that data available to them.

From a Ricks perspective, the best practices that we recommend to our clients are in SKU level, the individual style level, and I think the five reports of sales analysis open. We find a lot of our retailers, particularly the boutiques, are doing this analysis at the class level. They're not really going down to the SKU level because it's more about a group of products, the seasonal businesses. So they're not going down to your grid analysis, which is your size, the sku. But it's really good because it gives you a full comprehensive picture of how that product is performing. Because what you don't want to do is take a look at one data point and try to make a decision. You might have great sell through but very low return on your investment with really high markdowns. A customer detail report and then a salesperson analysis report. And those are on different cadences, but it's good to get on a cadence on a regular schedule and how you manage those reports and when you need to manage those reports.

Perfect. So let's talk about.

So you want to make sure you're looking across several data points before you make any kind of decisions.

Absolutely. So you're going to be looking for things here like what was my maintained margin on that SKU level or by that vendor. Right. So you're understanding what really is sending and what's really selling through and putting money in your pocket at the end of the day. And then I'm assuming you're looking at sales analysis first. That was the first one.

Yes.

What type of cadence do you recommend that they look at that report at and what are the key metrics in that sales analysis? Would you have them go after?

Well, the great thing about the sales analysis report in Rick's is it puts.

A lot of information this as well and saying, okay, what is my dating on this inventory?

What into one easily readable report.

The key measures is the most efficient markdown schedule. Right. That I should go after with this inventory.

Yeah. And this is a key part, and I know we want to talk about this a little later as well, but when you're looking at the decision making process on how to use your markdowns that you're going to look at your product performance and it's liquidation, turn your return on investment and then the markdown percentage, how and when to use markdowns. This is a key report for that knowing is something selling well if it's not selling well and what's driving that performance, what's affecting that performance?

Perfect. And so this would also be a key report like if you were and.

You can look at that across vendor level, class level and SKU level, the individual style level.

And I think looking at your numbers, creating an open to buy plan for yourself or let's say you were actually working with a.

We find a lot of our retailers, particularly the boutiques are doing this analysis at the class level. They're not really going down to the SKU level because it's more planner and.

Making those plans going into market to make your purchases for the next season. You'd be breaking down those sales by class and vendor. So you could have how many pieces do I need in this specific category by this specific vendor. So you walk in there with a plan not just I'm going to spend ten grand in this specific category and.

About a group of products, the seasonal businesses. So they're not going down to the sku. But it's really good because it gives you a full comprehensive picture of it. Yeah. And that's a great point because there's so many different filter levels on this report from vendor class, SKU across different time frame as well. This is a great report to use as like a vendor scorecard how that product is performing. Because what you don't want to do is take a look at one data point and try to make a decision. You might have great sell through or an analysis report in preparation for a buying season. Going to a trade show or in advance of a vendor meeting. This is the one that we recommend our retailers use for that purpose. Perfect.

And that gives you some negotiating power.

But very low return on your investment with really high markdowns when you're sitting.

At the table with that vendor too. When you have that actual vendor scorecard and you know how they've performed.

So you want to make sure you're looking across several data points before you make any kind of.

Now you have some leverage to say this did or didn't work. I need better pricing or. Or I need these decisions. Absolutely. So you're going to be looking for things here like what was my maintained margin on that SKU level or by that vendor. Right. So you're understanding what really is terms or whatever it is and now you're in control of the future of your financial statement.

Yeah. And Ashley, one of the things that we really recommend as well as part of our best practices and we're seeing this retailers be a lot more open.

To this what's really selling through and putting money in your pocket at the end of the Day and then I'm.

Assuming you're looking now is sharing this data with their vendors, with their providers, because then you can, it holds them accountable to their performance as well. And you know, if you've shared this data, you have the expectation that when they come to you, they're presenting an.

Assortment to you this as well and saying, okay, what is my dating on this inventory? What is the most efficient markdown schedule? Right. That I should go after with this inventory.

Yeah. And this is a key part and I know we want to talk about this a little later as well, but when you're looking at the decision making process on how to use your markdowns, that's based on actual performance and the actual needs of your store. When I ran the sales organization at Mizuno, we talked a lot about sell in versus sell through. And a lot of times on the sales side the guys get caught up in sell in, how and when to use markdowns. This is a key report for that knowing and not necessarily doing the research that the retailer is doing on their performance before they go into that meeting. So working and establishing a long term business with a retailer is. You gotta focus on the self is something selling well if it's not selling well and what's driving that performance, what's affecting that performance. Perfect.

And so this would also be a key report. Like if you were looking at your numbers, creating an open to buy plan for yourself or let's say you were.

Actually working with a through and not to sell in.

Can you explain one step further what you mean by sell in planner and making those plans going into market to make your purchases for the next season, you'd be breaking down those sales by class and vendor. So you could have how many.

Yeah. So I think from a sales side, you know, most of the reps are going to be challenged with a target that they're asked to hit, a sales target that they're asked to hit. And so how do I get that? I get more orders, I get bigger orders. And one of the things we challenged the reps to do was to pieces.

Do I need in this specific category by this specific vendor. So you walk in there with a.

Plan, look across their business in total, all of the accounts they're working with, who was performing well, who was performing down, who had opportunities. And then to build your assortment around that so that it reflected the quality of business with that, with your brand at that retailer and then how that retailer overall was performing. The last thing you want to do is go in and try to dump a bunch of product onto a retailer that isn't selling your brand well or is not performing well overall. Because in the end, and one of the questions I always ask my guys was if you're going to sell that way, you need to tell me what your exit plan is. How many?

Not just I'm going to spend ten grand in this specific category and wing it.

Yeah, and that's a great point because there's so many different filter levels on this report from vendor class SKU across different time frames as well. This is a great. How many return dollars are you going to need? How many cancellations are you expecting? All of that. But as a retailer, if you provide that information to your vendors in advance and on a constant basis, you can hold them accountable for that.

Yeah, that makes total sense. And it's just a win win all the way around for both the vendor and the retailer.

Yeah, it just builds a better long term quality business for both sides.

Absolutely perfect. All right, so number two report number two was your open pos.

Open pos. And that just goes back to the question about what makes a good pos. This report allows you to see order report to use as like a vendor scorecard orders that you have in the system by brand location, by date. And the reason this reports and this report's important is this really has an impact on your inventory management and how you for an analysis report in preparation for a buying season flow product. If you've got something that's selling well and you go out and chase it, but you've got orders in the system that for something similar or something that's going to arrive around the same time, that has a big impact on your cash flow. When I was a buyer at foot action, something would get hot. A brand would get hot, a model would get hot and I would go to my boss and say I need more open to buy. And he would say going to a trade show or in advance of a vendor meeting, this is the one that we recommend our retailers use for that purpose. Perfect.

And that gives you some negotiating power.

Right. Bring me your PO report and I'll show and I'll find you some open to buy. And we would have to go through and make adjustments and cancel product.

You have a when you're sitting at the table with that vendor too. When you have that actual vendor scorecard and you know how they've performed now you have some leverage to say this did or didn't work. I need better pricing or I need these.

You have all have open to buy Dollars, you all have a cash flow amount that you're working off of. And without this information it's real easy to get off track and not be bringing in the right product at the right time or bringing in too much product at the wrong time.

I think this is probably one of the most common mistakes that new retailers make. Would you agree with where if you don't have any type of reporting or tracking or inventory management system, you go to market, you place all these orders, you don't have them marked down anywhere, you forget that something you ordered was going to be coming, the ship date keeps getting pushed back, back, back and all of a sudden it's fall and your spring pieces you just ordered showed up at your doorstep and you're totally out of luck.

And this is a report that should be looked at very regularly, like on a weekly basis. And again, if you're a very fashion driven business or a season terms or.

Whatever it is and now you're in control of the future of your financial statement.

Yeah. And Ashley, one of the things that we really recommend as well as part of our best practices and we're seeing this retailers be a lot more open to this now is sharing this data with their vendors, with their provider driven business. You really need to keep on top of that because a two week delay in something can make it irrelevant.

Absolutely, absolutely. All right, so open POS Next was grid size.

Yeah. And this is one that we stress because we found writers because then you can, it holds them accountable to their performance as well. And you know, if you've shared this data, you have the expectation that unsold inventory is direct, direct, directly related dictation that when they come to you, they're presenting an assortment to you, to your size selling like on the footwear side that's based on actual performance and the actual. You get to the end of a shoe, the life cycle of a shoe. We find a lot of times it's those end sizes, it's the really small or the really big sizes that haven't sold and those are the most difficult to sell. So if you're analyzing your size selling on a regular basis, when you go to write future orders, you know what you selling, what's driving your sales not only by style but size needs of your store. When I ran the sales organization at Mizuno, we talked a lot about sell in versus sell through. And a lot of times on the sales side the guys get caught up in sell in within those styles and you can avoid some of those pitfalls of and not Necessarily doing the research that the retailer is doing. Sold inventory.

Ah, that makes complete sense. What are some strategies or best practices you guys give to retailers when they do run into that issue?

Well, the first question we ask in working through them with client success is let's go back and look at the process you're currently using on their performance before they go into that meeting. So working and establishing a long term business with a retailer is you got to focus on the sell through and not to sell in.

Can you explain one step further what you mean by selling?

Are you doing this kind of an analysis and then we try to get this on a schedule to look at these reports in it? Yeah. So I think from a sales side, you know, most instances are different and some of this goes back to your relationships with the vendors, the suppliers you're working with. But if they're in the business to help you succeed, most of the reps are gonna be challenged with a target that they're asked to hit, a sales target that they're asked to hit. And so how do I get that? I get more orders, I get bigger orders. And one of the things we challenged the reps to do was to. It's not out of bounds for you to ask them to help you and say, listen, I've got some unsold inventory. If you can't do that, the next best step is look across their business in total, all of the accounts they're working with, who was performing well, who was performing down, who had opportunities, and then to build your assortment around that so that it reflected.