Wade Armstrong

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We Mean Business: Poka Dott

Posted Thursday November 13, 2008 in Entrepreneurship

For some reason, Tivo didn’t pick up a We Mean Business episode this week, so I’m reaching back to earlier in the season, before I started my recaps. The team visited Poka Dott, a party supply store north of Los Angeles. Poka Dott is deep in the red and just falling deeper, and, worse, owner Stephanie hasn’t told her husband how much she’s losing. Major problems they uncover include:

• Too much merchandise in the store means a lot of money is tied up in inventory
• Too much merchandise in the store means that customers can’t find what they’re looking for
• Disorganized and poorly-merchandised displays don’t highlight products and make it hard for customers to find what they’re looking for
• Outdated point-of-sales system is clunky
• Too many employees means high cost of operations compared to sales possible in the store
• The store’s signs are hard-to-see from the street
• Store is unknown in the area and gets little traffic

Their Solution

Bill Rancic aggressively tackles the inventory problem, and he and Designer Peter Gurski convince Stephanie to retire some of her “favorite stuff” that she bought as inventory and instead highlight products that can move. Gurski really shows his stuff, giving the store a facelift inside to make it seem more accessible to the ordinary customer and show product in a good light. Gurski also gets some good big signs on the outside to show that the place is a party store. Rancic also tries to convince Stephanie to fire some of her staff so that the cost of keeping the store open isn’t so high. But the biggest thing the team does is when Rancic makes Stephanie sit down with her husband and reveal the extent of Poka Dott’s losses to him. Her husband does just what I would do in that circumstance - keep a blank face and let onto nothing, because who wants to fight on TV; I bet he’s quite the poker player, but I’m sure he can’t have been happy learning of the money the business is hemorrhaging. While they seem to both take the losses seriously, in the end Stephanie is unwilling to let any of her staff go - she’s hired her friends, it seems, and is unwilling to fire them, even if it leaves her unable to pay her own mortgage.

My Recommendation

The team is right on target here - Poka Dott carries too many items and merchandises them poorly. Gurski’s store makeover is just what they need, and the better inventory control that Linendoll brings should help keep Stephanie under control, but it’s clear that she really wants to buy the things she loves. It would’ve been fun to see an exercise in which they bring by a few of her target customers - a mom with a birthday party, and a party planner throwing an event like a Bar Mitzvah, for example - and have Stephanie shop with them. That could help Stephanie learn what her customers actually want, and make for a couple of minutes of entertaining TV, too. Whatever happens, she needs to learn to stock what will sell, which is not always what she wants.

While it makes for bad TV, I’d again look to direct mail marketing here - she should send catalogs to party planners in the area. Perhaps Linendoll could show her how to create a catalog on her computer and mention that she can buy a list of party planners in Southern California and mail it to them. And to stick to another old saw, I’d love to see some sort of Web site service as a partner here (maybe GoDaddy?) so that Linendoll can talk about making sales online and using online search advertising. (Poka Dott has an online store but it’s not very good and apparently not advertised from what I can see.)

Fundamentally, nothing will make the business work if Stephanie doesn’t decrease her employee headcount. Until things get busy this really is a store she can operate herself, 10 hours a day for 6 days a week - that’s just what an entrepreneur has to do. A trusted friend can be trained on the register to run the place once a month and on special days like birthdays to give Stephanie some family time. Some graphs might’ve made for good TV here, with Rancic showing Stephanie and her husband how long they could keep making their mortgage payments with just Stephanie working, with 1 employee, and so forth. (Graphs aren’t inherently bad TV - Deal or No Deal is fundamentally just people talking over a chart! It all depends on what you show, who’s saying what, and how quickly you get out of the segment.)

More Thoughts on the Show

While it’s clear that the team hasn’t yet reached its stride in this early episode, I am much more compelled by their response to Poka Dott than to some of their other makeovers. We’ve seen far too many restaurants, in which they’re competing with the superbly-done Kitchen Nightmares, featuring Gordon Ramsay, who knows a lot more about the food industry than anyone on the We Mean Business team. One main exception to the caterers and bakers was the Jazyhair Hair Salon, where, again We Mean Business is competing with the savvy and well-produced Tabatha’s Salon Takeovers. I’d love to see more retail companies like Poka Dott; the We Mean Business team really had something to add here that nobody else could’ve duplicated.