The First Quarter Is Over. So, How Did You Do?

(What? You're Still Just Comparing to L.Y.? That Is SO Last Year!!)
 
So, here we are: already one-fourth of the way through the year. Went by fast, didn't it?

When most retailers reflect on how the year has gone so far, they are quick to compare to L.Y. That is, how does this year compare to how our performance Last Year? And most often, of course, retailers are only comparing sales results of this year to last year.

In the opinion of The ROI, comparing to L.Y. is interesting, but not significant. Retailers who assess their performance only against Last Year's numbers are essentially driving forward while looking only in the rear-view mirror! Scary!

What should retailers be comparing against? Their 2013 plan! 

• What are their planned (expected) sales for the first 3 months of 2013?
• What were actual sales?
• Then compare: are actuals above plan? Or below plan?    

Now comes the key step. Whether sales vs. plan are up, down, or sideways, determine "Why?" Which of these 3 causes would best explain the difference?

1. Is it because of changes in the number of transactions?
2. Changes in the average sale? (That is, average transaction value)
3. Changes in the number of items per transaction?

Now you are on a path to have some useful management information!

Understanding what drives sales changes provides great insights on how to make adjustments, or how to better seize opportunities.

Plus, your analysis of the transactions will help you considerably. 

• If sales results are better than plan, what does that mean for your buying plan? Any orders you might want to increase?
• If actual sales results are below plan, you will really want to take a close look at your inventory orders. You may want to postpone or even cancel some orders.
• Consider the impacts on your marketing plans. Do upcoming promotions or events need to be changed?
• You will also want to review your expense plans as well. For example, what are the impacts on scheduling your people?   

Have More Fun in Retailing: Be Strategic!

By measuring your store's performance against your plan, instead of just comparing to L.Y. numbers, and, analyzing the transactions, you are managing like the pros do.

More important, by looking ahead and anticipating, instead of just reacting, you will find that you are able to put the fun back into retailing!


For more ideas on managing more pro-actively, see the Managing Store Issues section at The ROI. click here to go there now