The Potemkin Village

 

The problem with wearing a facade is that sooner or later life shows up with a big pair of scissors. – Craig D. Lounsbrough

Potemkin Village

Russia had recently annexed Crimea from the Ottoman Empire and after a long war, the region of New Russia now found itself under the rule of Empress Catherine II (a.k.a. Catherine the Great).

In 1787, Catherine embarked on a 6 month journey down the Dnieper River to New Russia to survey her new territory. Accompanying her on this journey was her boyfriend, Grigory Potemkin.

Unbeknownst to Catherine, the region had been devastated by the war. According to folklore, Potemkin – in an effort to placate Catherine – sent ahead an “advance team” to erect a fake village bustling with people before Catherine’s flotilla sailed by. After she had passed, the village would be taken down, rushed further downstream and reassembled to give Catherine the false impression that New Russia was a vibrant and welcome addition to her empire and that all of the treasure and bloodshed to obtain it was not in vain.

It’s been over 230 years, but the tradition of the Potemkin Village is alive and well today.

Don’t believe me?

Try visiting a store on a day when the store manager (Grigory) has just been informed that the bigwigs from home office (Catherine) will be stopping by for a visit. In all likelihood, an advance communication went to the store telling them that they don’t need to do anything to prepare in advance and they should just carry on as usual – the bigwigs don’t want to get in the way.

Yeah, right.

A flurry of activity soon ensues. The receiving area and back room are cleaned up and all stock is run out to the floor. Shelves and pegs are filled up, faced up and looking neat. Any aisle clutter is either put away or hidden. This is the kind of stuff that should be happening daily if people had the time – and yet, oddly, the time can be found to do two weeks’ worth of work in 3 days ahead of a VIP visit.

Sidebar: I once worked at a retailer (who shall remain nameless) with hundreds of stores each stocking thousands of products. But there was one store in particular that had its own unique set of stocking policies and ordering rules. This same store was always the top priority location when stock was low in the DC and needed to be rationed. What made this store so special? It happened to be located near the CEO’s home and he was known to shop there frequently. Not making that up.

Okay, back to the VIP visit. The big day arrives and the store is looking fantastic. The VIP entourage arrives and the store manager is waiting at the entrance to give the grand tour. Pleasantries are exchanged. How have sales been? Lots of customers in today! Any issues we need to know about?

Then comes the much anticipated Walking of the Aisles. The VIPs are escorted throughout the store, commenting on the attractiveness of the displays, asking questions and making suggestions….

Then someone in the entourage sees a shelf tag with no stock above it. “Why don’t you have stock? That’s sales we could be losing!”

The sheepish store manager replies: “I dunno. The ordering is centralized at headquarters. We just run product to the shelf when it arrives. We actually haven’t had that item in weeks and I can’t get a straight answer as to why not.”

“We need to support the stores better than this!”, exclaims one of the VIPs. “I’ll get this straightened out!”. Out comes the cell phone to snap a picture of the shelf tag below the void where stock should be. And for good measure, a few more pics of other holes in the same aisle.

A couple of taps and the pics are on their way to whichever VP is in charge of store replenishment with the subject line: “please look into this” (no time for proper capitalization or punctuation).

Ten minutes later, a replenishment analyst receives an email from her manager with the subject line: “FW: FW: FW: FW: please look into this”.

Another sidebar: I happened to be shadowing a replenishment analyst for another retailer for the purpose of learning her current state processes when one of those emails with pictures came in. There were 6 or 7 pictures of empty shelf positions and she researched each one. For all but one of the items, the system showed that there was stock in the store even though there was apparently none on the shelf. The last one was indeed stocked out, but a delivery was due into the store on that very same day. Was this a good use of her time?

Look, I know the tone of this piece is probably a bit more snarky than it needs to be. And although this whole scenario is clearly absurd when laid out this way, I’m not projecting malice of intent on anyone involved:

  • The VIP spotted a potential customer service failure and wanted to use her power to get it rectified. It never occurred to her that the culprit might be within the 4 walls of the store because: a) the store looked so nice and organized when she arrived; and b) the organization doesn’t measure store accuracy as a KPI. If shrink is fairly low, it’s just assumed that stock management is under control.
  • In all likelihood, the store manager truly has no idea how replenishment decisions are made for his store. And while there’s a 4 inch thick binder in the back office with stock management procedures and scanning codes of conduct, nobody has actually properly connected the dots between those procedures and stock record accuracy more generally.
  • The replenishment analyst wants to help by getting answers, but she can’t control the fact that the wrong question is being asked.

The problem here is that there are numerous potential points of failure in the retail , any of which would result in an empty shelf position for a particular item in a particular store on a particular day. Nothing a senior manager does for 20-30 minutes on the sales floor of a store will do anything to properly identify – let alone resolve – which process failures are contributing to those empty shelves.

Jumping to the conclusion that someone on the store replenishment team must have dropped the ball is not only demoralizing to the team, it’s also a flat-out wrong assumption a majority of the time.

If you happen to be (or are aspiring to be) one of those VIPs and you truly want the straight goods on what’s happening in the stores, you need to change up your game:

  • Every so often, visit a store unannounced – completely unannounced and spend some time in the aisles by yourself and soaking in the true customer experience for awhile before speaking to store management.
  • When it’s time to get a feel for what can be done to keep the shelves full, put down the phone and pick up a handheld reader. Just because the stock isn’t on the shelf right now, that doesn’t mean that it isn’t elsewhere in the store or on its way already.
  • Spend the time you would normally spend on pleasantries and somewhat meaningless measures on a deep dive into some of those shelf holes with the store manager in tow:
    • Shelf is empty, but the system says there’s 6 in the store? Let’s go find it!
    • Truly with 0 reported on hand and none to be found? Let’s look at  what sales have been like since the last delivery.
    • Can’t figure out why the replenishment system doesn’t seem to be providing what’s needed? Work through the calculations and see if there’s something wrong with the inputs (especially the on hand balance).

Will looking past the facade of the Potemkin Village solve the problems that it’s been hiding? Probably not. But you need to start somewhere.

In the words of George Washington Carver: “There is no shortcut to achievement. Life requires thorough preparation – veneer isn’t worth anything.”

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