Author: Helen Thomas

Over the past month or so, we have been rolling out new sales analysis for our Home Depot vendors on market performance.  Vendors to Home Depot using EDI 852 know buyers often want to receive sales analysis at a market level.  What we often find, however, is the analysis conducted does not take into consideration the number of stores in the Home Depot market.  To conduct a proper POS analysis of Home Depot markets you really have to take into account the number of stores in market.

For example Home Depot market 48 has 80 stores, while markets 138 and 160 have one store.  By summing the units sold from the EDI 852 to a market level and then dividing by the store count in that market, you can get an average sales per store for the market.  This metric is very useful in comparing the performance of the markets in a meaningful way.

In addition, you can use the SKU count in your plan-o-gram to further compare the performance of the stores at a market level.  You might also consider a store level sales analysis so you can rank your stores by sales volume A to E.  This lets you not only compare the store against the average sale in the Home Depot market, but also against its sales volume peers.  POS sales analysis by Home Depot market can yield some very actionable results, give it a try.

Many vendors use displays at retail customers to drive higher visibility and increased sales. A floor pallet or wing stack with product is a popular display program. These programs are often offered to the retailer at a discounted price and usually require the vendor to absorb both the discount and the cost of preparing the display. The objective is a short term boost in sales that hopefully creates long term repeat buyers. The question is, do displays work?

We have been studying this exact question for a number of clients who sell at Home Depot, Wal-Mart, and Lowe’s. Unfortunately, the impact of displays can be very difficult to analyze, for the following reasons.

· The SKU’s on a display are usually the exact SKU’s that are available on the shelf and as a result it is not possible to uniquely track a display sale vs a regular on shelf sale. You can look at the sales before the display shipped and after it shipped and calculate the change in sales, but it’s not an exact science.

· Shipping of products is increasingly going through a distribution center and not directly to the store. As a result, the exact store and delivery date of displays can be difficult to track without significant extra effort and coordination with the retailer.

· The retailer often exerts a significant amount of influence on store selection and the timing of when the display will be shipped. While this is understandable, it can be detrimental to the vendor and, unfortunately, sales.  Not all stores warrant a display, and for many products, the timing can have a large impact on sales.

· The execution of the display can be uneven across stores, since many store managers have a great deal of latitude on where the display will be located. In addition, store managers have latitude on the length of time a display will be available, and when the display is broken down and the inventory put into the regular shelf position.

What can be done to increase the measurability and effectiveness of displays?

· The most important action a vendor can take is to use a display SKU that is different from regular on shelf items. This is the ideal solution, but in reality this is very hard to do, because retailers do not like to have new SKU’s and most especially if the item is a short term sale.

· Work with the retailer to design display programs that can be accurately tested. There are several variables you can work to control: store quality, location, timing, display type. The key is to create test programs which have these variables controlled, so you can track their success. For example, you might choose 50 grade A (high sales) stores in two geographically similar markets and ship a display to them in the spring. Then ship the same display to the same stores in the fall. This provides the ability to understand if time of year impacts the rate of sales. You can then create a program that changes a different variable and test its impact. Operationally, this can be challenging because often the retailer must approve the display store list and timing, but working together, there is an opportunity to explain the benefits of testing and the cost realities born by the vendor that make the test essential.

Accelerated Analytics will be posting additional thoughts on displays in the future and welcomes your feedback and insights.

If you have a seasonal product, is it best to run promotions during the core selling season or during the down season? I’ve been analyzing this exact question for a customer this week and the data can make a case for both approaches. On the one hand, it seems like running a promotion like a rebate or floor display during the key selling season makes sense. In that case, the promotion is timed to when the consumer is likely to purchase your product. Or at least be thinking about it. On the other hand, if the consumer is likely to purchase your product during the key selling season anyhow, perhaps managing inventory and avoiding out of stock is the right strategy. If promotions are aimed at the non-core selling season when demand is historically low, doesn’t that provide the opportunity to increase sales? It’s a difficult question and I’d be interested in hearing Brand Managers experiences and insights.

Retail sales consultant Retail Metrics Inc. predicts that the 30 national retailers it tracks will this week post a 3.4% gain in sales for December at stores open for at least a year. That is atop a 3% gain for December 2009.

Overall, the National Retail Federation trade group forecasts that retail sales in November and December increased by 3.3% this year to $451 billion.

The positive gains made this holiday season appear to be sustainable. In December 2010 and already in the New Year our customers are engaging us to help with detailed custom data analysis for line review preparation. This is always a good sign of an improving economy. It means business leaders are ready to compete. They are looking for opportunities and making sure any weaknesses are explained, along with a plan for improvement. Underlying all of this is very careful point of sale data analysis, so that plans and recommendations are fact based. We have been carefully analyzing products across retailers, identifying trends in product sales, geographic trends, pricing variances, etc.  It’s amazing what EDI 852 can tell you if you have a good database with several years of history. Dig into your EDI 852 and get ahead of your competition.

The Commerce Department reported that October ’10 sales for the retail industry jumped 1.2 percent from the previous month, the most important gain since March. The rise was driven by a 5 percent spike in auto sales, which analysts said was particularly encouraging because it showed consumers were ready to tackle big-ticket purchases. Moreover, September’s sales gain was revised upward coming from a 0.6 percent increase to 0.7 percent.

Still, consumers remained choosy about where they spent their dollars. Home furnishings stores and electronics retailers each suffered a 0.7 percent drop in sales. Department shop sales also declined 0.7 percent, while health-care stores dipped 0.1 percent.

Instead, consumers returned to restaurants and bars, sending sales up 0. 3 percent. On-line retailers, that have held up much better than their bricks-and-mortar counterparts, registered a 0.8 percent jump. Shoppers also bought more clothing, a 0.7 percent boost.

Excluding autos, retail sales rose a decent 0.4 percent, in spite of the mixed performance across sectors. Retailers are hoping that this momentum will fuel the all-important holiday season.

As outlined by a survey by the National Retail Federation, an industry trade group, nearly 11 percent of consumers have finished the vast majority of the holiday shopping, up from just a bit more than 9 percent a year ago. The group predicted shopper’s average spending would inch around $688.87 in 2010, a 1 percent increase over a year ago.

The NRF’s annual holiday survey found that more shoppers are expected to get gifts for family and friends – and also themselves. The quantity of consumers who said they planned to indulge themselves rose eight percentage points to 57 percent in 2010.

The forecasts, coupled with the brand new October data, paint an image of consumers treading carefully on their way back to the mall. Economists say that spending is unlikely to rebound, with no corresponding improvement in the employment market.

The unemployment rate remains stuck at nearly 10 %, data released from the Bureau of Labor Statistics showed hope. Mass layoffs have declined in size and frequency. And private-sector employment rose 0.3 percent during the third quarter, in comparison with last year, the 1st increase since 2008.

How may you increase add-on sales throughout the Holidays?

Below are a few solutions to boost the units per transaction, and increase the average transaction as a result.

If you want this, you should buy that – Creating feature areas within your store that have a number of major stuff you need to push for holiday, surrounded by complimentary products, helps sell more than just that one item. Use signage and have the workers talk with customers to assist them to know how these products interact.

Stuff the Stockings – I still push stocking stuffers for holiday as customers will almost always be looking for those unique, fun little goods that round out their holiday gift giving, without breaking the bank. Create an entirely stocking stuffer display and make it interactive, just like a stocking stuffer smorgasbord, to inspire customers to get one or more additional items.

Sample products – Whenever they check it out, they are going to buy it. Make sure you have products available for testing everywhere, and use signage, or have your employees interact, to get customers to attempt different products. The chance for a sale rises significantly when you can place the product inside the customer’s hand.

A warm drink is the way to get them to stay – offering a warm beverage like coffee or apple cider gets customers to linger longer. It provides them time and energy to scope out much more of your store as they walk around, enjoying their beverage. And this means they could find more gifts than they planned on, resulting in increased sales.

Wrap the Cash Wrap – You’ve created a number of different ways inside your store to get your visitors to buy more, and the cash wrap may be the final opportunity. Make sure you have impulse items at the cash wrap, that customers can grab and go. Products under $20 usually perform best. Bonuses for items that may be sampled as well as 8-10 of these available for purchase.

So you? Exactly what are your favourite sales techniques to increase Holiday sales?

Posted by Cornelia Ortega.

visit Cornelia’s blog.