“A picture is worth a thousand words,” or so many investors believe based on the growing number of analysts whose specialty is visiting stores and taking cellphone photos of empty or unkempt fixtures. Stores like Target, Walmart, Sears and Penney are particularly interesting subjects for this kind of coverage.
A recent RetailWire discussion centers on how (and whether) retailers should respond to this kind of reporting. Are they smart to argue that these are “isolated incidents,” instead of dealing with endemic out-of-stocks and housekeeping issues? Here’s my point of view:
There are at least two issues at play: First, the customer service problems caused by out-of-stocks or poor housekeeping. Second, the PR and “investor relations” ripple effects, whether a company considers this kind of reporting fair or not.
First things first: Fix the underlying causes of the problems, whether through store management or supply chain management. (And if these are chronic issues, admit it and tackle them.) The “gotcha” reporting should then take care of itself.