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Retail Analytics
Years ago, by looking into their retailers' sales, the music industry found the best policy was to concentrate on their top 40 sales items.
This is where the action is.
Over the years, when looking at my clients' retail information, this great advice. Here is an example: a client of ours has sold 15181 different items in their shop over the past three years. See, when you look at the sales, once you are about the top 40 items, the sales are getting very close to 0%. There is a lot of profit past the 40th item but few people are coming for those items.
When I decided to look at the profit that we're making from these 40 items, I found this,
I do not think that remarkable and almost 25% of the shop's profit came from these 40 items.
As you can see, the profit between items varies, although the basic pattern follows sales. Note the item in negative. Much of the product had to be sold below cost to get rid of it.
What has proven very effective is leaving best-sellers where they are now as they sell well there. Then put some in a best-selling area at the central point of the customer's vision. Some have a few best-selling regions. This is to group products with similar attributes next to each other.
Now how do we find these 40 top best selling items? Well, it's easier than you think.
How to Perform Profit Analysis for Your Retail Business
Go to Register reports.
Now select "Top N Stock Sales for a Given Period."
Now the following comes up.
For example, I will select a day, but you usually would put in a year, now select a department.
Outcomes a report with the top sellers.
Now, you're set!
Make a few best-selling areas. Now every month, you run this report. Then move a few items to the best-selling areas and take out some.
