As a business owner, if you want to break the cycle of typical sales or just skating by, then you need to take a hard look at your business. Making sure that you have the right tools to capture data and customer information, as well as a process for reviewing it all will help your business to gain more sales and win more customers!
Have you ever thought about what you did last year and you know for a fact you will not repeat...”that” again, but your so damn busy, looking at the numbers seems like a pointless endeavor because you already know what the story says?
So many retailers and especially solopreneurs can tell me if a product did well or not, whether they will run a specific promo again and/or what times of year produce highs or lows for their business, but few dig deep into the “why”.
And that is okay because you’re keeping the lights on and you’re doing better than last year, right?!!??!
If you continue doing what you have always done, you will get what you have always gotten.
Where to get Your Data…
Let’s start with the Basics and the right tools! Regardless of the channel you use to sell your product, you most likely use a Point of Sale (POS) system of some sort to capture a transaction.
That thing that rings your customers up when you make a sale…. yep! It’s not just used to right up customers anymore, and if that is all your using it for, your missing out on key insights for your biz!
POS systems these days can help you uncover insights into your transactions, inventory, basket sizes, sales trends, customers and more.
Most POS systems these days come with an analytics dashboard where you are able to produce sales reports and analyze your profit margins, vendor sales, customer trends and so much more.
SquareUp, a popular POS system for small retails insists that with their up to date POS, “You’ll now have access to sales trends, buyer insights, helpful charts, and personalized data to help you run your operations efficiently” Square.
If you looking into acquiring a new POS for your brand, be sure to do your research based on your business size, data capture needs and I cannot stress enough, make sure that your POS has an integrated inventory management system.
Whether you are a Brick and Mortar Only or if you have an Online Presence you most likely are on Social….
You need to be using social media analytics to capture and understand Customer Engagement within your Business Accounts. It’s not all about clicks and likes anymore. Social Media is a way to engage with and gather insight about your customer like never before.
On Facebook Insights you can find engagement both on your overview tab and posts tab. The posts tab shows analytics on each of your posts, including the date it was published, its reach and engagement.
On Instagram Insights you can view impressions, reach and profile visits. You can also see data about the gender and locations of your audiences as well as what times of the day your followers engage with your profile, this is a huge bonus as it can help you determine times you should post new content.
Google Analytics is a free service that you can use to measure the traffic on your website.
Leverage this tool to understand where customers are coming from, how long they are on your website, what they are looking for and so much more. Click here for more ideas on how to use Google Analytics for your retail brand.
Your Website Host Dashboard
Dependent on your host, you should be able to find out more information about your customer and your web activity from your website host. I currently use Bluehost (affiliate link) and WordPress and they both provide insight into my analytics leveraging a dashboard.
Email Service Provider / Email Marketing Software
As a retailer you most likely are building your email list. Dependent on the service provider you are using, you should be able to leverage this platform to further understand your customer and gather data based on their customer profiles.
Some of the key insights that you should be tracking is your open and click rates as well as times of engagement.
The key metrics will give you an idea of what subject lines are working well, when people are opening your messages and what products they are engaging in.
If you’re not already segmenting your audience and personalizing your offerings, the time is now.
Not only will your customer become more responsive, but you will learn more about what they like, what offers work and how to get a greater conversion.
If you are a Brick and Mortar Store then you need to be accounting for your Foot traffic.
There are foot tracking analysis solutions out there to help you better understand who is walking in and walking out as well as how long they are in the store.
So, now you have the tools, now what?
Perform a Hindsight for your Business
What is a hindsight?
A Hindsight / Post-Mortem / or Retrospective is an in-depth analysis of your business so that you can learn, adjust and plan as necessary.
Why Perform a Hindsight for your Biz?
Have you ever sold something, held an event or did something seasonally and then go back to find the results and all you could find is the numbers?
Then, you scramble for a day trying to find where you wrote something down and before you know a day is wasted and what you thought you wrote down, wasn’t much at all?
Sometimes you need to slow down so you can get ahead.
The whole point of performing a hindsight is tying it to key areas of focus or seasons for your business so that you can review and make informed decisions the following year on seasonal product styles, quantities, trends and associated marketing promotions.
When do you perform a hindsight?
A hindsight can be performed after any type of activity, season or time frame in your business.
The goal is to review what happened, the numbers, the product, any feedback and make decisions based on the data received and document your findings.
Some retailers with the capacity choose to perform Seasonal Hindsight's' on a quarterly basis, other smaller retailers may choose to hindsight on a bi-annual or annual basis.
You can hold a hindsight for the following scenarios:
- A Selling Season
- A promotional event
- Review a particular vendor or product line etc.
How to Perform a Hindsight
Choosing how in depth of an analysis as a retailer you would prefer to go, should be based on your capacity to perform this activity as well as the tools that you have available.
- Grab a large white board / annual calendar / large blank piece of paper.
- Inform and acquire applicable employees (if available) that can contribute.
- Assign employees tasks to gather data/ pull reporting in advance.
Remember your customer most likely has multiple paths to purchase so it is important to review both online and offline data for your hindsight.
Before you even begin, make sure that you have your big picture strategy / goals for the year close by. When you begin planning for the following year you want to ensure that you are also meeting these key initiatives.
All changes and adjustments made should ladder up to your key goals and overarching vision for the business.
Define your Assessment Timeline
As a small business, the easiest way may be to start with a year in review.
If you have capacity, you might want to divide your year into seasons or quarters (your choice).
Break your financials down from large to small
Start with Total Revenue in comparison to goal. (Be sure you are looking at Gross (before expenses) and Net (after expenses))
Break it down by quarter and then by month (also, try to break it down by selling channel i.e.) online or in store)
There are a significant amount of data points that you should be using in your business outside of gross and net revenue…It’s not just all about Sales, Revenue and Traffic.
I’ll leave the retail math for another post, but make sure at a minimum you are using the following in your analysis:
- Retail Price
- Initial MarkUp (IMU)
- Gross Margin
- Gross Margin Return on Investment (GMROI)
- Inventory Turnover
- Open To Buy (OTB)
Dig deeper to see where the overall sales were coming from by customer segment (New, Retained, loyalty customers etc.).
- Example: if most of your sales were coming from your retained (repeat customers) and you did not see an influx of new customers, you may need to review your marketing efforts.
Also, look at your customer segments and try to find patterns and clues across the units per transaction, spend per transaction, and trips per year.
These are just some of the critical factors that need to be included in your strategy. Once you have these numbers you can assess how to improve and what opportunities to pursue.
Create a Financial Targets for the Following Year (Against the Timeline in Review)
Break it down by quarter, then month based on last year’s numbers and what you project to bring in next year.
Look at each quarter individually:
Be sure to include an Operational Review (if applicable).
This is because your sales are not just due to one channel, the entire customer experience can be affected if there are operational issues at hand.
- Product Delivery on time
- Floor Set
- Shipping to customers
- Customer Service
- Systems functioning properly
Benefits of Performing a Hindsight
There are many benefits to performing a hindsight for an event, promotion, season or quarter which include:
- The creation of a plan for your business backed by history
- Ability to make data-driven decisions
- More profit based on well-planned forecasting and insight
- More aware of your customer behavior
You create a plan for your business backed by history.
It is so important to make decisions based on what experiences have or have not worked for you in the past.
By reviewing and documenting these results, you are creating a platform for decision-making that is informed by actual results.
You make data-driven decisions
By knowing your numbers and digging deep into your analytics you are making decisions informed by actual numbers and facts.
When you’re unsure of a direction to take in your business you can always lean on the numbers and the story it is telling you about your products, marketing and customer behavior.
You become more profitable
When you take the time to review your numbers and look at them from a “net” perspective rather than just a gross perspective you are basing your decision on increasing profit and not just revenue.
By keeping a record of what products produce the most profit and analyzing how to reduce the costs of goods sold you are putting your business in a position to grow. The same is true of your business if you also offer services.
You become more aware of your Customer Behavior
As you analyze the numbers you are getting to know your business better and in essence your customer.
As you review behavior across channels and how your customer engagement connects to your conversion you are understanding what your customer is drawn to and more of what they appeal to.
Bottom line, you need to leverage data in your business to make educated decisions. If you want to succeed in this ever changing market, you need to know your numbers and read the data behind your customer behavior.
Feeling as though this is a lot? Wanting a second opinion on how to create a strategy for your business?
As a Retail Consultant and Coach, I would be happy to have a free 30 minute discovery call with you to see if we are a good fit and how I can help you make more money and grow your business this year.