Bill Scott, founder of StoreReport LLC & Scott Systems Inc.
Large corporations did not make America, nor the United Kingdom, Canada, Japan, Australia, South Korea, or any of the other free nations of the world. Instead, it was the common, every day, hard-working, selfless, unsung heroes in dozens of countries, and in thousands of communities that caused democratic nations to prosper.
The neighborhood grocer, the butcher, the druggist, the contractor, the school teacher, the farmer; it was the small businesses, growers and producers that made us what we are. Human beings, each of them, having compassion, possessing caring attitudes, respect for their workers and their customers, willing to shoulder huge responsibilities, and having a strong work ethic… it was the individuals that made our nations what they are. And, we are losing them.
Many of our sons and daughters went off to wars and died for the countries they loved, and for the people they cared about. They did not die for Sears, for Royal Dutch Shell, for HSBC, for Tesco, for Walmart, for Nokia, for Goldman Sachs; neither did they give up their lives for politicians and bureaucrats with greedy aspirations. They gave their lives for hard working individuals, and for the families that nurtured the hallowed soil most of us call ‘home’.
Free nations provide a hospitable environment in which to live, to prosper, and create families. Freedom is the ingredient that binds free peoples together, and makes it possible for them to pursue their dreams of being better off than those that came before them.
It’s Been Done Before
Sam Walton provides us one shining example of what one person can accomplish in a free nation. When Wal-Mart opened its ‘Five and Dime’, it brought prosperity to the little town of Bentonville, Ark. But when Wal-Mart Inc. entered the New York Stock Exchange in 1972, the soul of Walmart was lost, and gradually over the years, Wal-Mart has evolved from a contributor of great wealth, to that of a predator, and every community the huge company has touched has been given a fatal blow that is destined to destroy not only the communities they occupy, but will eventually take down Walmart as well.
In the history of our existence, there have been several occasions where large, proud, and capable nations found it necessary to join forces to fight a common foe. In some instances, the allies were composed of groups of nations that had conflicting beliefs, cultures, customs and ideologies, sometimes competing in open markets, but all of them with specific, common goals. There were great conflicts within these nations as to the practicality of sharing its resources with other nations, but the leaders of these nations saw the handwriting on the wall, and forged partnerships that would not have been considered in better times.
Retailers Have Been Crippled
Ordinary retailers have been handed a bad deal. While competition is necessary to sustain growth and prosperity in a nation, competition is no good when one competitor becomes so powerful it wipes out all other competitors. In retail, we find ourselves facing not one large competitor, but hundreds that are fighting among themselves. And as the old saying goes, “when elephants fight, the natives get killed.” In the case of the small independent retailers, the same businesses that made our countries great are being systematically dismantled. If this continues for much longer, our nation will be made up of a handful of heartless off-shore corporations that will drive all local retailers out of business, and then prices will skyrocket as stockholders demand an ever increasing share of the spoils.
There is an Answer
You may think this is an unsolvable issue, but it is not. While we may not be able to stop the actions of predators like, Walmart, AT&T, Amazon, Google, and Microsoft, we can fight back and thereby preserve the lifestyles we require in order to maintain the growth and health of our communities. A consortium of independent retailers, not traded over the stock exchange, could slow down the growth of those heartless, predator corporations, by cutting costs, increasing profits, and providing consumers with services that the predators leave on the table, mainly due to their size and inability to move quickly in an ever evolving market.
The missing key to the solution to this problem is the suppliers, and possibly the manufacturers. As an individual, suppliers are not going to pay attention to anything we say; but as a group, they will be more willing to accommodate our needs. Here is an area where we can cooperate to get things done.
To the suppliers’ credit, the problem starts with the disparate ways in which independent retailers order inventory. We have tied their hands. When you have 500 customers, each with their own way of doing things, we are creating a problem for which there is no solution. It is fool-hearted for us to expect any supplier is going to be able to accommodate all of the various ways 500 retailers manage their ordering, and I completely understand the way discounts, with regards to the cost of products, enable suppliers to offer larger discounts to larger retailers, but I believe it is possible for smaller retailers to make suppliers even greater profits than the larger ones can, if we are able to reduce suppliers’ cost through the implementation of a more efficient method of inventory management.
For example, I believe the smaller retailers, by more efficiently managing their inventories, could cut suppliers’ delivery costs by 50 percent, simply by reducing the number of deliveries suppliers make to the retailers’ stores. If a suppler were able to deliver all the inventory necessary to satisfy a retailer’s customer service level for 14 days as opposed to 7, or 7 days as opposed to 2 or 3, the supplier would be cutting his delivery costs by half. We can do this by knowing precisely what a retailer’s requirements are for each and every store the supplier services. The retailer would benefit in two ways. Firstly, the retailer would be reducing money tied up in inventory by 50 percent (the amount that would not sell between delivery cycles), the stores would be cleaner and more efficient, which would result in a 40 percent increase in sales, less spoilage, less theft, and reduced shrink.
How Do We Do This?
In the current environment, suppliers are basing their deliveries on what retailers are ordering. But the solution is not the knowledge of what the retailers are buying, but what the retailers are selling to their customers. Currently, suppliers have no way of knowing this information, and this is one of the major problems that cannot be solved by analyzing purchases. By collecting the sales data in real-time (as we are doing with our customers), coupled with sufficient sales history to work with, a supplier can accurately determine what the store will most likely sell during the next delivery cycle. With that information alone, suppliers can reduce the number of deliveries by half, cutting back the suppliers’ costs, allowing the suppliers to move more products and service more customers with the same amount of fuel and delivery expense, and reduce the time needed to make the delivery.
We have possessed the technology to do these things for over a decade. Tell me. What are we waiting for?
Bill Scott is the President of StoreReport LLC. He is an author, speaker, cloud service provider, and consultant to the c-store industry since 1978.
