Learn from Setbacks by Using Educated Trials

You’ll have setbacks. You’d like to identify the reasons so you can benefit. How can you do that well when there are so many moving parts? In addition, because human personalities, including your own, are involved in any setback, all our psychological defenses often fog over the matrix of true causes. In his book A Thousand Days, historian Arthur M. Schlesinger Jr. quotes President John F. Kennedy as saying, after the Bay of Pigs fiasco, “Victory has a thousand fathers; defeat is an orphan.”
     One answer to how to identify the reasons for setbacks is to be found by transitioning from that failure involving the word “pigs” to a retailing setback around teddy bears. Build-A-Bear Workshop stores epitomize the interest today’s consumers have in personalizing their shopping experience. Each child customer selects from a range of items in the store to design their own stuffed animal, and upon completion of the toy, the child signs the animal's birth certificate.
     However, Build-A-Bear lost $2.3 million in the first quarter of 2011. This compares with a profit of $1.7 million for the first quarter of 2010.
     The response of the retailer was to engage in educated trials to discover how best to move forward. The nature of those trials hints at a few things you might do when experiencing setbacks.

• Tinker with your merchandise mix to see what sells: Build-A-Bear opened their first store in a hospital—Cook Children’s Medical Center in Fort Worth, Texas. Added to the usual merchandise mix were a patient gown, crutch, sling, bandages, cast, wheelchair, and hospital staff outfits.
• Expand the shopping time commitment alternatives to learn what shoppers want: Build-A-Bear opened a store in Orlando International Airport. Limited edition souvenir items can be purchased by the shopper lacking time to construct a toy before a flight.
• Appeal to local loyalties, then judge the advantages: Build-A-Bear is based in St. Louis. Although almost all of the 400 or so Build-A-Bear stores across five continents are in shopping malls, they’ve also stores at the St. Louis Zoo, St. Louis Science Center, and St. Louis Cardinal’s ballpark.

     It’s possible these initiatives actually contributed to the first quarter loss. But even if the educated trials did not pay off in short-term profitability, they provided more opportunities for the retailer to learn.

For your profitability: Sell Well: What Really Moves Your Shoppers

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