I have spent 20 odd years planning customer demand (actually called Merchandising but most people confuse this with people who look after displays – called Visual Merchandisers)
Have you ever thought about who decides what clothes, shoes, accessories or food is in the shop or store you go into? Do you sell products but you’re struggling to get on top of knowing what is going to sell that day or week? Well, that is (some of ) what a Merchandiser does!
When it’s super hot outside have you noticed there suddenly seems to be flip-flops, fans, BBQs and all other things summer all of a sudden? That’s not by accident; quite a lot of planning goes into when particular products will launch or end.
I’m going to do a separate post taking you through what a Buying and Merchandising team actually does but, for now, let’s concentrate on the principles that YOU can use to improve your business.
Better Customer Demand Planning = Better Stock Management & Sales numbers = Better cash flow and profit which are the ONLY two metrics that matter (more on that another time)
There are some key questions you need to ask yourself when looking to have the right things for your customer at the time they want it.
Do I understand my product?
- How seasonal is my product? Does it sell best when the sun shines? Or when it snows? Is there a time when it wouldn’t sell at all? Obvious things to think about here are umbrellas or flip-flops but what about kids bikes or knitting needles? Would it surprise you to know that in the build-up to Christmas, along with party dresses, we all rush out and buy new ovens? True story!
- Do my products rely on a certain kind of customer? Children? Students? Mothers to be? Brides to be?
- Do I know what I sell? What is my highest unit sales item? Highest value item? What is my most profitable item?
- Do I know WHY my products sell as they do? Are most of my customers men so lilac doesn’t sell well for me? My customer base is Students so pasta is a bestseller for me?
- What’s the lead time for this product? i.e. How long from when I place an order with my Supplier until it is available for the customer to buy? Can I order it just before I need it or, to ensure I have it for a key time period, do I need to order it months in advance?
- Is it perishable or does it have some kind of sell-by date? When do I need this product “off my selves”? For example, you may not want to be left with a surplus of pop up tents after September when all the festivals have finished and all the kids are back at school.
Once you have all this information you can group your products together. This can then be used in conjunction with the time element of your plan.
Do I understand the time period I am looking at?
- What time period do I want to look at? Easter, half-term, a bank holiday weekend, for example. Don’t make the mistake of trying to plan huge sections of time. To use one of my favourite phrases; How do you eat an elephant? One bite at a time. Planning is no different. By keeping it to particular moments you can have more focus and can also analyze after the event much more easily.
- Have I ever sold my products at this specific time? Did I sell at that time last year? The year before? What information do I have that can inform this? What do I know?
- Is there any seasonality to this time period? Are the schools on holiday? What is the weather, usually? Is it the festival season? Is it the wedding season? What things that happen at this time could positively or negatively affect my sales?
The important thing when planning customer demand is to think about the specifics of YOUR business and YOUR customer(s).
If this is a new product or time period then look at similar items or what you believe would sell to similar customers.
Bottom line though is to be aware of what could affect your sales then after the event you can see what did have an effect. Only through data and understanding your customer can you gain insights that drive better stock management and therefore higher sales
Remember the planning cycle:
Analyse -> Plan -> Review -> Analyse
The more you do this, the better you will get at it, I promise.
Head over to my Templates page where I have a spreadsheet called Sales, Stock and Intake to help you with your overall sales planning or Get in touch and we can look at how I can help you create spreadsheets you can use or coach you in how to forecast and plan better for YOUR business!