By Jim Lewis, CEO Enhanced Retail Solutions LLC

I braved it on Black Friday and went to the mall. It was great to see so many people out shopping- just like the old days. Before the pandemic. Before Amazon. Before blueberries at $6.99/lb. There is nothing more exciting in retail than physically watching a product fly off the shelf. Or not. We’re all in the business of trying to answer why.

Retail Analytics at Holiday

At this point in the game, a product’s destiny for holiday is pretty much baked. But there is a lot we can learn and apply going forward. There are many angles to look at the business, but I wanted to highlight a few of them. It’s all part of what we call The Discipline.

• Quantify Lost Sales. Store by store, SKU by SKU, track the on-hand inventory levels and rate of sale. How many stores ran out? Was inventory balanced? Just because a store is designated as an “A” high velocity or volume location doesn’t mean there aren’t “B” and “C” regionally located stores that act as “A” stores during the holidays. Document the losses and findings so we can plan better next year.
• Measure Promotional Effectiveness. It feels to me that retailers are more promotional this year than last year. I see it especially in the department stores. Did the products you promoted get the expected increase in lift? Study the elasticity- what effect on sales did every 1 cent change in price bring? Elasticity models are based over time, and meaningful when the number of correlations between a price change and lift occur. Did you leave money on the table, or was the promotion not tempting enough to the customer? Use the information to build more meaningful ladder plans.
• Analyze Sales by Climate/Region and Demographic Group. Study the business by region or climate group to see if your assumptions are held up. For example, does “flannel only sells in the North” hold true? I know plenty of South Florida stores that sell Flannel. Did your good-better-best product mix sell that way in stores with low-mid and high median incomes?
• Quartile Performance Visually. We are all used to looking at numbers. Build a chart with 4 quartiles- the best, average, mediocre and dogs. Instead of item numbers and descriptions- use photos or swatches. Designers will be able to visually see what worked and what didn’t more easily.
• Project Ending Inventory. In just a few weeks it will all be over. Where will inventory end up on each product? Start projecting and taking action now. Especially for imports where you don’t have such quick reaction time. Update your ladders and revise projections to see what your business is going to look like in a month from now.

Document the Findings

There are a lot more things you can do to learn from the faster pace of business right now. Be sure to keep a diary that is easily sharable. For a more thorough look at our Discipline of Planning, please reach out to us.