– You dig into inventory reports to see if they had run out of key merchandise. No, they had plenty of inventory on all of the best-selling items.
– You look at average transaction values to see if salespeople were all of a sudden not selling complementary add-on items. No, units per transaction were as high as they had ever been.
– You look at payroll and scheduling reports to see if there was a staffing problem that you did not know about. No, hours and staffing were right in line with budget.
There is no obvious answer in the reports, yet the problem exists – sales were suffering.
Finally, you stumble onto something in one of the reports. While analyzing sales at a product-by-product level, you notice that the new line of women’s sportswear is not selling nearly as well as it is in your other stores. That’s it – the new merchandise, which is a bit more fashion-forward than the product lines of the past couple of seasons, is not appealing to this store’s customer demographics. You go back to the merchandise distribution team and ask them to adjust future orders to slant the store’s assortment more towards basic, non-fashion items. It took a lot of analysis, but you eventually figured it out and solved the problem.
Or did you?
What if most of the new merchandise was still sitting in the stockroom and hadn’t yet made it to the sales floor? What if the new merchandise was on the sales floor but was all ticketed with the wrong prices? What if the street in front of the store had just gone under construction and it was hard for customers to park and shop? What if a new competitor opened up directly across the street at exactly the same time as the new merchandise hit the store?
It is sometimes easy to draw conclusions from a seemingly thorough analysis of sales reports. But, sales reports can’t tell us why a particular result is or is not happening. And until we know the “whys”, there’s not much we can do about it.
Sales reports are very valuable for providing guidance into the questions we should ask and for giving us direction on how to conduct further investigation. Thorough analysis of sales reports can help narrow our focus. Answers will only come from on-the-scene inspection and dialog with the front line team. Armed with good data, our inspection time and our dialog has a better chance of uncovering the real root issues. Once we uncover the root issues, we can then build action plans which will really work.
Don’t take the easy way out – data in reports doesn’t come close to telling the whole story. Nothing is better for understanding the business than getting out of the office and onto the front lines.