Retail Success – Science vs Magic

Success in retail is about the blending of magic and science. Getting this blend right is essential to building a profitable retail business.

Magic – the touch side of the business – designing, buying, marketing, selling, branding, omni-channel content

Science – the factual side of the business – accounting, merchandise planning, operations, IT, omni-channel platform, functional areas, new technologies

Typically, businesses will have 2 heads of the business – a sales/marketing (magic) head and an operations/finance (science) head. In the US, it is typically an operations/finance head with a very strong sales/marketing right hand man. On the other hand, in Australia the head of a business is usually a sales/marketing person with a strong operational person to make sure things stay on course. Either method works, as long as there is a strong influence of both.

What happens when it leans one way or the other? If science controls too much, the business will have tight expenses, great stock turns, detailed KPI’s and controlled processes, but will suffer in sales. If magic controls too much, sales will be up and brand awareness will be high, but the expenses will be out of control and there will be stock problems.

The two should work hand in hand and challenge each other. Merchandise planners should decide how much to buy – buyers should decide what to buy. Salespeople should have stock turns as one of the KPI’s. The supply chain should have sales as a KPI. Designers should have the influence of a commercial manager. Each business will have unique areas that need to work together for the overall good of the business.

There is no room in a business for any department to think it is more important than another. It is true that there would be no need for accounts if there were no sales. It is equally true that there would be nothing to sell if you don’t have the money to buy it.

The best retailers understand that there needs to be a balance of magic and science, with the ultimate decision maker to understand both sides and make informed decisions.

For help on the science side of retail and understanding the magic side, contact