What small , impartial merchants may study on baseball statistics.
It's finally April as well as the commence of one other baseball season. Football could always be our most popular game, but baseball can be our national pastime, as well as the commence of each new season brings with it essays and also odes for the game.
This kind of week, CBS's 60 Minutes ran their own feature to mark the newest season, a user profile about Bill James. With Regard To the particular uninitiated, James can be one of the particular game's nearly all creative and also influential statisticians, and also has been credited using changing many long-held beliefs concerning how an individual can assess players and also feel about the game. He started out more than 30 years ago, creating and also self-publishing a yearly statistical abstract with regard to every coming season. today he functions for that Boston Red Sox, and his approach to statistical analysis has been virtually universally accepted and also adopted throughout the particular game.
James' crucial insight ended up being in which looking at baseball through in-depth analysis in the statistical data could shed new mild about outdated preconceptions, and also tell a story associated with what's occurring on the field, and also why, far beyond what the eyes associated with players, managers, executives and also fans really had been seeing. He demonstrated, with regard to instance, in which slugging percentage and also on-base percentage had been far much more accurate predictors associated with on-field success compared to classic figures associated with batting average, home runs and also runs batted in.
This kind of insight -- that the numbers may add nuance, depth and also knowing in ways that mere observation can't -- features direct application with regard to small , impartial retailers. With Regard To retailers, the particular playing field may always be the store, the front door, the particular products displays, the money wrap, the particular backroom. the players tend to be your associates along using your customers, as well as the figures derive directly through his or her interaction.
Many small , impartial merchants are incredibly astute observers associated with what's occurring in their store, and very significantly dedicated to revenue and also profits, but less familiar and also comfy with increased in-depth quantitative analysis. In-store observation can be critically important, but in-depth quantitative analysis may open up up new lines associated with thinking and also shed new perspective and also insight about what's really being observed.
What exactly are a variety of the key metrics to analyze? Many of these metrics tend to be comparatives to prior years or even seasons, and also expressed as percentage changes. Let's commence with almost all the front door, and also move back to the store.
How is your foot traffic? Inside the particular latest company downturn, this may be where many merchants have got struggled. That They just don't have got as many consumers coming through the front door.
How is your transaction count? In case traffic is off, transactions tend to be likely off as well. but how's your conversion rate, the particular ratio associated with transactions to traffic count? has your transaction count held steady, or even features in which slipped as well?
How tend to be your freud box average units sold for each transaction, along using your average revenue money for each transaction? May an individual divide these metrics down between destination products and also impulse items?
Let's take a look at issues from a merchandising point associated with view.
What departments and also categories tend to be trending up in sales? Which Usually tend to be trending down? How may always be the revenue composition changing, as measured from the percentage contribution of every and also every department and also category? is this thanks to shifting demand, or other internal factors, such as positioning and also display on the revenue floor?
What's occurring using revenue units simply by department and also category? What concerning average offering price? Are Usually consumers trading down through more costly products with regard to lower priced items, or even possibly vice versa?
What's occurring using markdowns simply by department and also category? is the percentage of your markdown revenue to just about any or even all revenue increasing? is the particular markdown percentage on your markdown revenue increasing? What about the discount percentage, resulting through markdowns, on your total sales? Are Usually markdowns growing since associated with inventories backing up, or possibly a outcome individuals being locked directly into an at just about any time growing pattern associated with promotions?
What's occurring for your gross margins simply by department and also category? Are Usually they will growing or even decreasing? is it attributable to a shift in the revenue mix, a adjust in your original markups, or even changes in your discount percentage resulting through markdowns? How are an individual able to shift the sales mix in your favor? is it a matter of remerchandising current applications on the revenue floor, or even will the particular assortments that an individual simply carry want being adjusted? What additional steps may you take to improve your gross margin percentages and also gross margin dollars?
And Also what concerning your inventory?
How is your stock composition simply by department and also category? is stock backing up about you, or even looking being arriving light? How can be stock turnover trending with regard to every department and also category? What may a close analysis of your gross margin return about stock investment (GMROI) tell you?
What's the typical retail expense of your stock with regard to every department and also category? What about the markup of your stock simply by department and also season? In case margins tend to be off, would it be since markups happen to be eroding? is it since your invoice costs through vendors have got elevated more than you've permitted with regard to in your markups, are you locked directly into pre-priced branded goods, or is competition tying your practical pricing?
How efficient are you in processing new receipts associated with inventory? Carry out you obtain it for the floorboards quickly? is it completely ticketed, and also may always be the ticketing accurate? How well can you cope with exceptions, late shipments, over-shipments, misshipments and also unauthorized substitutions? Are Usually an individual returning goods as expeditiously as possible, and also are you diligent concerning assuring in which you're acquiring complete credit.
How is your shrink? Are Usually an individual cycle counting frequently? What do your results show? Are Usually an individual in a position to pinpoint the main cause of the particular shrink, and also close the particular holes in your policies and also processes which are leading to shrink?
Finally, let's look at that almost all essential metric, your cash.
Carry out you've a cash flow plan, a budget in which details the money an individual anticipate bringing in, as well as the expenditures associated with cash in which you'll have to make. Really Does it look far enough out to the long term so that you tend to be able to foresee when you may experience a cash crunch (which is extremely essential with regard to seasonal retailers)?
Really Does your strategy offer an individual with almost all the benchmarks to allow you to monitor your speed and also agility when you go along, and also mention to an individual personally the particular locations in areas you might want to adopt immediate, corrective action?
This kind of is merely a primary listing of metrics in which just about any little or even impartial retailer should continually be watching. With Regard To just about any given retailer, there's additional critical metrics appropriate with regard to his or her specific business. but for just concerning any retailer, such as a bit associated with good baseball fan, the accurate secret point is always to not rely exclusively on your eyes. you probably will not be seeing the complete picture. is a retail consultant, coach and also speaker which assists impartial merchants improve sales, profitability and cash flow simply by leveraging his deep expertise and also verified retail know-how, Find his FREE report "The 16 Crucial Elements of a WINNING Impartial List Strategy".