It didn’t take Lyndon Lake, Director of The College Store at SUNY Potsdam, very long to figure out his store had an inventory problem. “Well, we had 38 different kinds of mugs, including 5 different Mom and 5 Dad mugs,” Lake said. “I’m pretty sure no one needs quite that much variety.”
Lake was brought in to take over the bookstore in 2013, charged with attempting to halt a $1.2 million decline in sales over a seven-year period. He learned quickly that excess inventory was a big problem to tackle; at $750,000, his goal was to bring it down to $500,000 within two years.
Another issue he faced was a lack of information; reporting on retail metrics had never been a priority, which left management in the dark with regard to critical financial figures that were negatively impacting performance.
Lake decided to get a comprehensive, objective assessment of the store’s operation from indiCo, an independent subsidiary of the National Association of College Stores dedicated to strengthening campus stores and offering professional consulting among its services.
“First, indiCo consultants came in and met with all the different departments, including textbooks, all the merchandise buyers, marketing people, the board, and the business office, then they looked at our financials for the past four years,” Lake explained. “They came back with recommendations for all sections of the stores.”
Overstocked inventory and slow turns on many items stood out as glaring problems. And the biggest reason for that was a lack of regular reporting.
“One of the biggest changes was that we needed to start running more reports, and with greater frequency,” Lake said. “Everything from inventory to sales, negative on hand, current inventory, and low-sales items all needed to be reported, so I gave staff monthly goals and the responsibility to run reports at the end of each month.
“Unfortunately, I quickly realized that they had never run these kinds of reports before or, if they had, they really didn’t know how to read them,” he continued. He turned to POS provider MBS for help and they hosted a webinar for all store employees, including instruction on running the reports they needed and how to interpret them.
Getting the staff to change their buying habits also presented a challenge, he noted. “Before indiCo came in, the buyers did balk at having to do the reports. Some of them had been buying the way they did for 30 years, and they didn’t really think they needed to change.”
In some categories, for example, buyers were simply ordering the same quantity from year to year without checking sell-through. “But then we showed them the reports, and they were able to see that they didn’t need to be ordering as much,” Lake explained.
Lake made several other changes that also had a considerable impact on sales and on profitability. “We used to have two big sales events during the year where we’d mark merchandise down as low as 75% off. Now, we’ve implemented progressive sales for items that aren’t selling. So instead of making no money on the item, we may be able to sell it for 30% off and still make some profit on it. Eventually if it doesn’t sell it will get to 75%.”
In addition to the bookstore, the institution also operates the Union Market convenience store located next to the bookstore. He noticed that students would often leave the bookstore and buy snacks in the vending machines.
“Our Market is open until 11:00 p.m. seven days a week and the bookstore closes at 5:00, so we decided to sell supplies, electronics, and some of our more popular items in the both locations, to give students the chance to purchase what they needed when the bookstore was closed,” he said.
Then, they added a small candy and drink selection in the store, so students wouldn’t have to visit both locations to get what they needed. “We increased profits on the snack sales, and made it much more convenient for our students.” He also made the decision to close the Union Market in the slow summer months to save on staffing costs and, instead, stock Pepsi, snacks, and ice cream into the bookstore to sell it there.
Lake is on track for big improvements in both sales and profitability. “My goal for inventory was to get it down to $500,000, and we’re currently at $523,000,” he said.
Morale at the store is better and reporting is running smoothly. “Even when there’s an experienced manager in place, sometimes it takes an outside eye to help identify the areas in the store that aren’t operating as efficiently as they could, and to spot opportunities to increase profitability,” he said.