retail sales exaggeration

By Jim Lewis, CEO, Enhanced Retail Solutions LLC

We’ve all been there. We think our product is the best thing since sliced bread. The designers created a masterpiece. The sales team says how high is high. Owners take the risk and produce a lot of inventory. The buyer likes it and gives it a test.

Reality

Then the results come in. It’s burnt toast, or maybe charred at best. Now what? For many manufacturers the selling muscles must kick in. What can we say to convince the buyer that this is better than it seems. I’m in the camp of telling it like it is- it didn’t work, and let’s try something else. I can’t name names, oh heck, it’s virtually everyone we work with- are not in that camp.

The Blame Game

The first reaction is to blame something- store execution, the weather, you name it. And sometimes there is validity to some of those factors. Instead of harping on what went wrong, it may make more sense to see what went right. Something to divert the narrative.

Usually, our retail analytic skills are focused on optimizing inventory productivity. But in cases like this we are looking for little nuggets of positivity we can share with the buyer. There are some legitimate things you can look at that might help.

A Few Tips

  1. Determine if there is a subset of stores that did well. If so, what was special about them? Location? Better presentation? It may not be feasible, but visiting the best and worst stores can provide good takeaways. If travel impedes that, call the store managers and ask some questions. It doesn’t hurt.
  2. Was store execution a problem? Maybe the reason other stores aren’t doing so well with the product is because it’s not on the sales floor or it’s in a poor location. Maybe the time it takes for goods to get to each store varies greatly- so there’s a lot of inventory that isn’t productive yet.
  3. Even if the overall sell through wasn’t great and the average rate of sale is mediocre, determine the potential of stores that did well. There’s always a few. Then project out what they should have been set with. Maybe there were stores that sold every color/size in a short period of time. Or stores that sold completely out of a particular sku. They are all good stories.
  4. If the product has multiple sku’s, see if a particular sku is pulling everything down. Calculate a new rate of sale without those sku’s and see what that performance is.
  5. A test is exactly that- a test. The point is to learn from it and even if your program wasn’t fantastic, you may have learned what to do to make it more profitable. Take the learning and make changes- expand to the stores that have the best chance in selling it. Play with the pricing or color/size mix. Basically, come up with a new plan. Even if the buyer says the test failed- good! We learned, now here’s how we move forward.

The Trusted Advisor

Find something positive in the data. Most buyers these days are data minded so showing a level of detail and promoting a plan could save your miracle product. Analyze it in far more detail than the buyer- and show your capability in that regard. These are all things that build trust and may just give you a second chance.

Need the tools or want to strategize about a program? Contact us.

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