Plan on Planning - Or Plan on Losing Business
History Repeats Itself - Why Not Benefit on that Knowledge?
In this most difficult retail environment, everyone wants to hang onto existing business and no one can afford to make a mistake - That would be costlier than ever. That said, Planning is more important than ever.
No doubt you've heard the line, "history repeats itself". Even in the world of retailing it holds true. Both manufacturers and retailers refer to history when estimating the potential of a new item. In most cases however, there is not enough data saved to do an accurate job.
In this newsletter, we will highlight the key statistics that every manufacturer should archive:
- Save retail sales data each week - not just the totals for the entire program.
- Note any major holidays or promotions to determine if there will be more or less weeks of selling the following year.
- Record Sales Units, Sales Dollars and Inventory. By dividing the sales dollars by sales units, you can determine the average unit retail- illustrating whether a peak or lull in business was caused by a change in the retail price.
- Do not overlook the number of stores. This is important because it can show you how many units per store per week on average that item sold. When planning a new item, take the new store count, and multiply it by last year's average units per store per week to estimate the unit potential.
- Save a list of your top and bottom performing stores. This helps minimize risk on test orders (Analyzing demographics and geography is most helpful as well).
- Record store execution. By archiving the number of stores with on hand and no sales, and stores with no on hand by week, you can more accurately determine lost sales, plan receipts more efficiently and maximize sales and profit.
Undoubtedly your company is understaffed and overworked, making it a challenge to track store selling. While we understand that completely, we caution you that more and more of your competitors are doing this analysis - And that gives them a competitive edge - In an environment where there is less business to go around.
This advise may be obvious to some, yet our experience is that it is not to all. It is our hope that at least some of this advise is helpful to you.
Jim Lewis
Founder and CEO
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