It's a given that your sales volume is a very big deal. Granted, you are analyzing it every day. But here's a slightly different approach which you may find very revealing.
Let's start with a couple truisms. The definition of retailing is “selling to the ultimate consumer.”
Retailing also is having "the right product at the right price at the right place at the right time for the right customer."
But, as retailers ponder how best to manage sales in the current consumer environment, does it really matter whether their "right customers" buy from them in-store or online?
Actually, it might! And here’s a simple, free "pilot project" to find out a little more.
A. First, gather your sales data for, say, the past month. Or, depending on your transaction volumes, maybe just a week. This is just a pilot project.
B. Then, using a spreadsheet like the example shown here, enter that sales data into these two categories:
C. Tally it up. For each column of HOW THEY SHOP, tally purchases by merchandise department and dollar volume.
(Remember to look at median values for transactions – half higher, half lower – not just average transaction.)
D. Look for the patterns. And the surprises (yes, there WILL be surprises!) And then, consider what that might mean.
For instance, it may confirm the purposefulness of your shoppers. They have a clear idea of what to buy from you online, and what they prefer to buy in-store.
Or, maybe it will illustrate how you have two very different kinds of shoppers. Here's what that might mean:
Fun, isn't it? We think this exercise will stimulate your merchant thinking. And that of your key staff people as well.
Managing sales is such a big deal for retailers. And you really cannot know too much about where sales are coming from, and why. The art of being a merchant is enhanced by exercises like this.
We're big on the old saw, "Retailers need to work smarter, not harder."
There is much enthusiasm coming out of the buying trade shows, and why not?
Attendance levels have been near to or better than 2019. Energy levels are high, and very contagious. A sense of urgency persists, due to past supply chain issues, emboldening the pressures from the vendors to "Buy now!"
Especially in today's environment, FOMO - the Fear Of Missing Out – can be a compelling sales pitch.
How to deal with this pressure, especially given all the headlines about a coming recession, or drops in consumer spending, or cautions about the need to control expenses, improve profits, maintain cash?
Here are two tactics to help you manage this. One helps monitor and control "How much to buy?" The other helps decide "What to buy?"
That's a sign of the times, isn't it?
While retailers are more accustomed than most folks to cope with change, 2020's unrelenting flexibility tests have been a challenge. Forget about five years. Retailers have to be ready for the next five months! It's back-to-school and then Holiday.
The only certainty about the next five months is that they will probably feel like the past five months. Yet you still must run a retail business. And that means you still must buy and sell merchandise.
The opportunities – and the pressures – are mounting.
For some time, conventional wisdom has characterized independent retailers as "technology laggards."
Not that they are Luddites; it's just that they regarded retail technology as a major expense, especially in human capital. They often were cautious, even skeptical, about the promises of new technology being pitched to them.
When the pandemics arrived, many retailers responded rapidly and smartly. In scramble mode, some crammed five years of technology adoption into five months!
Now, as the lockdown restrictions recede, the conventional wisdom eagerly suggests that consumers of all ages will continue to rely on online shopping and other technology.
Hmm. Let's consider that "conventional wisdom" a bit more closely.
Many Americans who can afford to save money – thanks to reduced spending on eating out, vacations, and consumer goods – are playing it safe and hoarding their cash, according to recent research by Gallup/Franklin Templeton.*
And those who currently are saving at least a little money largely plan to keep saving rather than spending in the near term.
Since we first established The Retail OWNERS Institute®, we have asserted that the greatest growth opportunity in retailing is between the ears of the owners. And nothing since then – not even (or maybe especially!) – a once-in-a-century pandemic has diminished our belief.
Independent retailers and restauranteurs have been among the first business owners to pivot to a survival mode. Why? Because they have had plenty of practice!
By now, you have your year-end financials for 2021. Remember, it always comes with a Balance Sheet!
Whether sales are up, down, or sideways, the financial strength – and staying power – of every business is shown on its Balance Sheet. And revealed by its Balance Sheet ratios.
Still less than $1 a day! 👀