The Winner By a Nose

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Davidmastil (3) David Matsil heads up Business Development for Enhanced Retail Solutions (ERS), a company that focuses on the art and science of Point of Sale (POS) processing and the resulting interpretation and analysis of that sales data. ERS is a TIA affinity partner and is deeply involved with retailers and supplier organizations across a large number of verticals.

In the thousands of conversations I have had with suppliers to retail –in the toy category as well as many other verticals – I often hear that the supplier studies retail sell through analysis.  Typically this means looking at top-level sales. That is better than not studying sales. But is it enough? Put another way: Would your Walmart buyer be satisfied with that level of analysis?

Selling to retail is like horse racing. There is only one winner. That winner takes all – even if it is by a nose. That being the case, wouldn’t want to be the thoroughbread out in front?

Forward thinking companies are looking at door level, region level, studying demographics – Not only for Walmart who demands such analysis, but for all their larger customers.

Viewed_bauer_1107055c Others are looking at prepack sales down to the sales unit (Some call it “baby”) level. They want to insure that the items sell in the same proportion they ship. They will even make 2 or 3 different prepacks to accommodate regional or demographic preferences. Their retail partners in many cases will allow them to flexibility to change the assortment over time to adjust it to how it is selling.

Then there is execution. According to Reflexis, only 59 percent of retail merchandising and promotional initiatives are executed in the intended fashion. They also say the cost impact on poor store-level execution is 2–5 percent.

It may be time consuming, but the benefits of store-level analytics can be significant. Locating stores that are sold out (and have potential for reorders) and stores that have inventory but no sales (have not executed yet) are a quick way to improve turnover and profitability. It also shows the buyer you are on top of the business in a detailed way.

At the end of the day you want the buying team to see you as a trusted advisor and proponent for their business. If you're successful enough, you may even earn the honor of being a "category captain or manager" for them. Now that's a real competitive advantage!

Proving you can co-manage the business is a major win. Especially at Walmart, you are responsible for tracking the business and making recommendations to improve inventory productivity, sales and profit. Show that you have the expertise and resources to do this.

Track sales and inventory every week, preferably against a plan agreed upon by you and the buyer. That way performance will never be a surprise. Track by sku and watch closely for trends. Conduct store level analytics and make recommendations.

What do you believe?

Please feel free to email me at: if you have any comments or questions you wish to share offline.



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