What You Can Learn From Your Average Retail Selling Price

Last week, I had the opportunity to work with two different customers analyzing their sales at The Home Depot.  One sells products in the paint department and the other sells into the building materials department.  The analysis goal for both customer projects was to deconstruct their YTD sales and identify the factors contributing to higher than expected comp sales increases.  Both customer’s sales for a set of key SKU’s were up about 2.5% YoY and the question they wanted answered was, “What is driving the higher sales, and will it continue?”

As we deconstructed their respective sales into its component parts of distribution, price, and rate of sale, we uncovered interesting data regarding average retail selling price.  The first customer’s average retail price was pretty consistent across Home Depot stores at the expected $22.95 retail price.  There were some fluctuations, but the data was pretty clustered, as expected.

In contrast, the second customer’s average retail price was very inconsistent.  Customer #2 believed that The Home Depot was pricing their core SKU at $59.95 or $65.95, depending on the market.  However, as you can see in Figure 2, the pricing was very inconsistent across stores.  In fact, we identified stores in the same Home Depot market with a selling price variance of $28.35 per unit. 

While there can be good reasons to price a product differently by market due to shipping costs or competitive pressures, it seems irregular to have different prices within the same market.  Take a look at the average retail price of your products. It’s an important exercise that can yield some interesting insights.  It presents an opportunity to have a conversation with your merchant about pricing strategies.  And, It also provides an opportunity to identify markets with similar demographic profiles, but different selling prices, thus providing insight into what price point drives the highest sales. 

Does your average selling price match your expectations?  The answer may not be as simple as you think and could reveal some interesting insights.

US BEAUTY MARKET EXPECTED TO GROW TO $90 BILLION IN 2020, AND ACCELERATED ANALYTICS COSMETICS BRANDS ARE IN THE NEWS!

Today’s $80 billion US beauty market will continue to grow according to a report by Euromonitor International. This growth rate will mean the beauty market will grow by 45% in 10 years. In 2015, the premium beauty category grew 7%, with premium foundation sales increasing 14.2%, compared to just 3% the prior year. Consumers have been shifting to premium products, looking for high quality products. Many luxury beauty brands who use Accelerated Analytics POS reporting to optimize inventory levels, track promotions and drive sales are in the news with big headlines this week, such as Parlux Fragrances, Shiseido, Inter Parfums, Estee Lauder, Elizabeth Arden, Coty and L’Oreal. Click Here to learn more about our solutions for beauty brands.

TAKEAWAYS FROM ACCELERATED ANALYTICS’ GS1 CONNECT 2016 SESSION: ‘The Importance and Value of Data Sharing – Using Point-of-Sale Data to Deliver Outstanding Customer Experiences’

I had the opportunity to lead this session last week and came back with some takeaways that I wanted to share, as I feel they are reflective of the state of retail today and how retailers and vendors are using point-of-sale data to manage their business in this time of OMNI-channel, customer-experience driven retail.

Customers want a single-vision of brands and be able to have a consistent, complete and winning experience every time they shop, in whatever channel they shop in. To ensure products are available when and where the customer shops, retailers need real-time inventory visibility, a seamless order management system and the ability to deliver. Retailers and brands realize they need to work together to have both a single view of the customer and a single view of their data in order to be successful.

Some interesting, yet not surprising, statistics were gathered from the retailers and vendors represented in the room. When asked about managing their POS data week to week, 66% were using POS data that was not provided via an EDI 852 file, eliminating their ability to automate the collection and processing of the data electronically, and instead having to work with multiple sources and formats of data. This process of data management and then trying to create usable reports to have meaningful partnership conversations between retailer and vendor is extremely time consuming: 83% of the retailers in the room spend 11-50+ hours per week managing and processing their POS data. More staggering was 95% of the vendors in the session were spending 11-50+ hours per week: 30% spending 11-20 hours, 40% spending 25-50 hours and 25% over 50 hours per week!

The good news is over half of the attendees in the room felt they are getting better at managing and using POS data each week, but 30% still admit to ‘Barely Using’ their POS data. Recognizing that heavy resources are needed to use POS data, especially on the vendor side, is making vendors ask, “Do we build an in-house solution to manage this, or outsource it?” CLICK HERE for an infographic detailing the pros and cons of each, and the differences in resource and financial investment.

Based on the time and effort being made by most of those represented, it is clear that POS data sharing is important for effective collaboration between retailers and vendors to “get it right for the customer”. POS data can be used to not just track units sold overall, but can give product/store level details on out-of-stocks, weeks of supply, sell thru %, average sales, geographic trends, inventory investment and lost sales opportunities. CLICK HERE for our industry sell thru % guidelines infographic.

We need to do everything we can to exceed our customers’ expectations and deliver an outstanding experience for them when they come across our brand. Sharing POS data and then using it to partner together to analyze it will help shape the customers’ experiences and give us inventory visibility and fulfillment across channels to meet customer expectations.

Want to learn more? Contact Jennifer@AcceleratedAnalytics.com to start a conversation. CLICK HERE to download whitepapers on analyzing POS data like a pro.

- Jennifer Freyer, Director of Sales and Marketing, Accelerated Analytics

Build vs. Buy: Outsourcing your POS data-reporting and analytics is faster, easier and less expensive than building an in-house solution

Retail POS data holds the key to understanding how your products are performing at a store level. But it can be a daunting task, not to mention a drain on resources, to gather, analyze and report on EDI 852 and POS data from all of your retailers. Our newest infographic compares building an in-house solution to outsourcing your POS data-reporting an analytics. While there are beneifts to each approach, outsourcing the solution is faster, easier and less expensive. Complete the form below to request our FREE infographic!

 

WARM WEATHER HELPS HOME DEPOT SALES RISE ALMOST 10% IN 4TH QUARTER, AS HOME PRICES INCREASE AND DEMAND FOR NEW HOME CONSTRUCTION STARTS 2016 WITH SLOW GROWTH

The Home Depot’s fourth-quarter sales included an 8.9% sales increase in US stores that have been open for at least one year. This is despite the challenges facing the rest of the retail industry. Sales were strong the entire quarter, but warm weather in December brought in a sales spike – Home Depot attributes $100 million in sales growth to the milder weather. High sales were seen for power washers and pressure-treated lumber by homeowners building decks.

Home prices also rose in December, showing the strongest gains since July 2014. The Home Price Index showed a rise of 5.2% in the 12 months ending in December, versus a 5.2% in November. The national median sale price for a home in December was $213,800, 8.2% from the previous year. There is a limited inventory of homes for sale, and demand for new homes is likely to drive more new construction and help keep a ceiling on the rising home prices, although January 2016 was a slow start for new home construction for the year.

Accelerated Analytics helps Home Depot vendors, such as WM Barr, Hillman Group, Alexandria Molding, and CPG Building Products to manage their sales and inventory data to drive results. Our vendors use our analytical measures, such as sell through, inventory shortages, out of stocks, weeks of supply and consumer purchasing trends, to take quick actions to ensure they are optimizing inventory and growing sales.

Source: Wall St. Journal

AMAZON ANNOUNCING INCREASED SHIPPING FEES AND A PRIVATE LABEL APPAREL LINE MAY BE ON THE WAY

Big changes are being announced at Amazon.com. Based on shipping price increases imposed by UPS and FedEx late last year, Amazon announced its threshold for free shipping is increasing by 40%, to $49 in orders. However, Amazon is not raising the threshold with an interest in shipping revenue, but instead to incent more customers to become members of Amazon Prime. Amazon Prime members always receive free shipping on all orders, but membership costs $99 per year. These customer spend on average double what Amazon’s other customers spend, and absorbing shipping costs will be nothing to them compared to the billions of dollars in sales the company may gain.

Amazon is also hiring heavily to staff up its Amazon Fashion Private Label unit, which could take on fast-fashion chains to sellers of basic apparel. An analyst at Women’s Wear Daily estimates Amazon could launch a private label apparel brand by early 2017. Amazon can undercut prices that other fashion retailers have at brick and mortar stores, and its ability to collect customer data can help them to give customers exactly what they want.

Many Accelerated Analytics’ vendors utilize our POS reporting and analysis tools to manage their Amazon sales and inventory. These vendors sell online with the retail giant in addition to selling at department store brick and mortar stores and online sites. Being able to compare sales trends between them is a key tool to help them win at retail and ensure customers are able to access the products they want to buy regardless of which retailer they are shopping with.

Sources: Wall St. Journal, New York Business Journal

Leading Solution for DIY POS Retail Reporting

At Accelerated Analytics, we work extensively with The Home Depot, Lowe’s, and Wal-Mart data and we know how to integrate your item catalog, shipping data, plan o gram, and other key files for a comprehensive reporting solution.  With our services, you'll have more timely reporting in a consistent format available to any user with an internet connection, iPad, or iPhone.  Your analysts will be able to focus on the business instead of making spreadsheets. Plus you will have store / SKU level reporting.  Talk about powerful!

Economic Mixed Messages

By Chad Symens

This article recently caught my attention and the wheels started turning: http://www.cnbc.com/2016/02/11/is-the-us-economy-running-out-of-gas.html

The current economic situation is confusing to the casual observer.  On the one hand, President Obama regularly speaks about the US economy being the strongest and most resilient economy in the world, and yet articles like this create doubt in the minds of the average observer.  Gas prices are at historic lows, and the unemployment rate is back down to pre-recession levels.  Yet polls consistently show that Americans are unhappy with the the direction of the economy and the leading presidential candidates are outsiders running campaigns against the "establishment".  Q4 earning and full year earnings are also confusing. Home improvement stores are doing very well, but department stores and large mass merchants are struggling.  Today the Federal Reserve sent conflicting messages about the economy being strong, and the possibility of a recession is still out there.  

What are we supposed to make of all this?  

I'm no economist but my observation is the average American consumers are pulling back on discretionary spending and focusing on paying down debt and putting some extra money into their savings.  Home improvement retail sales clearly show consumers are investing into their homes and taking the savings at the gas pump and putting it into their homes or their savings accounts. Depending on your point of view this can be both positive and negative considering US consumers have historically had higher levels of debt than other countries. But the debt level of the US consumer is rapidly decreasing. Does the generally conservative approach to finances mean consumers, who drive the economy, are pulling back and won't help to sustain the economic recovery?  

Business at Accelerated Analytics has been expanding exponentially in the last 90 days. We are seeing companies across multiple retail channels invest into analytics and reporting because they understand that to win at retail they have to be smarter and faster than their competition.  Those businesses are investing into productivity and technology, not pulling back.  These businesses are small, medium, and large. They represent a good cross section of the economic landscape and watching them invest makes me optimistic.  I believe the economy is going through a routine cycle of smart and successful companies growing and investing and conservative companies that only risk and fear pulling back.  To me it seems to be a very Darwinian cycle where the smartest and strongest will thrive and the weak will struggle and possibly fail.  

I'm bullish on the economy's prospects.  What do you think?

NRF’s Big Show Recap

The NRF’s Big Show wrapped up on Wednesday after record attendance, and, as we unwind from an exciting week in New York, we find ourselves reflecting on the event as a whole and on the key takeaways that will impact Accelerated Analytics in 2016.

Matt Shay, President and CEO of the National Retail Federation, opened the trade group’s annual Convention and EXPO with a state-of-retail message, highlighting the event’s transformation under the strategic guidance of Shay and the NRF board.

“We’ve invested in attendee experiences, added a third day of exhibits and gained exclusive control of the entire convention center.” Shay said. 

The event saw record numbers, with 35,000 people in attendance and roughly 580 exhibitors. While the convention was dominated by technology companies, both those facilitating consumer-driven change in the retail industry and those designed to help retailers replace, upgrade and modernize their systems, very few occupy the niche market of POS data and analytics. “There were about 50 companies in the Data and Analytics section of the expo, but very few that do what we do,” said Jennifer Freyer, Director of Sales and Marketing for Accelerated Analytics.

As customer expectations continue to rise, it’s imperative that vendors and retailers have access to their data -  down to the item level -  quickly. Accelerated Analytics is well positioned to meet that need via our one-click access to SKU/store level sales to identify trends, optimize assortments and track promotions. Plus, our forecast reports and low inventory and out of stock alerts help our clients ensure the right inventory is at the right stores.

Our visit to the Big Show also provided the opportunity to participate in several meetings with GS1, as we work with them toward standardizing POS data sharing in the retail industry. This is crucial in expanding the retailer and vendor partnership for better joint planning, store execution and sales performance.

The event returns to New York again next year, January 15-18, 2017.

NRF SURVEY REVEALS INVENTORY SHRINK IS A $44 BILLION PROBLEM FOR RETAILERS

Inventory shrink, or the loss of product due to shoplifting, employee and vendor theft and administrative errors, costs retailers billions of dollars. The NRF and the University of Florida provided survey results this week stating that in 2014 inventory shrink averaged 1.38% of retail sales, or $44 billion.

Shoplifting accounted for 38% of the loss, followed by 34.5% in employee theft. The rest consisted of 16.5% administrative errors, 6.8% vendor fraud or error and 6.1% unknown loss.

While grocery chains have the highest shrink rate, home center/hardware/lumber/garden reported average shrinkage of 1.09%.

Tracking inventory effectively is key to managing shrink. Actual and accurate inventory counts eliminates the over/under counting in the results. Verifying product delivered is what was ordered and is accurately described in systems is also paramount – if an expected-sized item was not available, and the vendor ships a different size, but that difference is not noted, a retailer can end up with a surplus of one size, a shortage of another, and a dent in their inventory valuation. Inventory measurements should be looked at in both units and dollars. A retailer could be 99.5% accurate in dollars but only 94% accurate in units.

Shrink-related data is stored in different applications such as POS/point of sale, inventory, receiving and store applications. Having the ability to obtain reports that combine point of sale and inventory data in a timely fashion is imperative to take action quickly before the data becomes outdated.

Accelerated Analytics is a comprehensive service for collecting, analyzing and reporting on POS point of sale and inventory data, to increase sales, optimize inventory, recognize inventory shrink and respond faster to this information.

Source: Chain Store Age, ProSales

BELK INC EXPLORING POSSIBLE SALE OR MERGER

Belk Inc., founded in 1888 by William Henry Belk and in the third generation of Belk family leadership, has hired Goldman Sachs to help it evaluate strategic alternatives, including a potential sale. Belk is the largest family owned department store chain in the US, valued at as much as $4 billion.

In fiscal year 2014, ending January 31, 2015, Belk posted net sales of $4.1 billion, up 1.8% compared to the previous year. After Reuters reported on the potential sale, Belk issued a statement that it had hired Goldman Sachs to help them explore all options and expect to conclude its analysis in the next several months.

US consumer spending has been slow moving this year despite lower gas prices, due to weather conditions and consumers’ desire to save. This has affected department store sales, prompting chains to resort to smaller store models and aggressive discounting.

The last major acquisition in the department store sector was Canadian chain Hudson’s Bay Co, owner of the Lord & Taylor chain, which acquired Saks in 2013 for $2.9 billion. Major department stores like Macy’s and Nordstrom are expected to be contacted by Belk to solicit their interest in a deal. Neither Goldman Sachs, Macy’s nor Nordstrom responded to requests for comment.

Belk operates 297 stores in the southern US and is based in Charlotte, North Carolina.

Source: Reuters.com

Analyzing Retailer POS Return Data Critical for Customer Satisfaction in Omnichannel Age

Retailers are striving to minimize return rates and maximize customer satisfaction. In a recent survey from Voxware, it was revealed that 57% of consumers are returning items they purchased online. 42% noted the products they received were in the wrong size or color and 15% said they received the wrong product altogether. Nearly 20% of consumers say they received an incorrect item a second time.

By analyzing return data, retailers can gain a better understanding of consumer preferences and behavior, as well as survey their internal supply chain and warehousing abilities.

Retailers are focusing heavily on omnichannel. Customers expect to buy what they want, how they want, when they want and have it delivered quickly to wherever they want them. Consumers can order online and pick up in a store, order from a brick and mortar store and have it shipped to them or the store, and order directly online. This requires store operations to effectively manage picking and shipping, turning each store into a warehouse.

Retailers need to analyze their business processes though POS and return data to drive sell-through velocity, margin improvements and customer loyalty.

While customers may be willing to forgive retailers after one return experience, 45% of respondents stated that they have limited their shopping with the retailer – both online and in-store after a second return.

Resources: Retail Touchpoints, Multichannel Merchant

Outsourcing POS Analysis

Why does an outsourced service make sense? Using an outsourced service for POS data analysis is a great idea, because loading data every week and managing servers is not your core business- it's an expense.  And worse yet, the data and technology change all the time, which makes them very expensive to manage in-house.

Accelerated Analytics® eliminates all the cost and hassle of POS data analysis.

The Accelerated Analytics® service includes:

• Automatic loading of POS data for each retailer
• Hosting of a custom database for all your data
• Detailed sales, inventory, and forecast reports
• Training for your users
• World-class analysis tools
• Phone, email, and web support on-demand

Better yet, here's what one of our customers said...

“Accelerated Analytics® allows us to quickly come up with exceptions reports showing when on-hand levels are below desired levels and even red flag zero quantities. With this information we are able to offer support to our retail customers stores that need it most and increase the service level for our customers overall. Having management type reports with charts showing information like our (upward) trend analysis on sales is invaluable.” Steven Pugh VP Operations Howard Products.

POS Analysis - Analysis and reporting made easy

If you are a vendor supplying to a retailer, you are no doubt receiving POS and inventory data. This can be a real headache since the files can be different for each retailer. Your team probably spends hours each week manually entering data, creating spreadsheets and then preparing reports.

Accelerated Analytics® can eliminate all of this wasted time. We will gather all of your POS data files automatically - no software to purchase or hardware to support.

Using Accelerated Analytics® makes all your POS reporting headaches go away. With Accelerated Analytics®, we handle all the data conversion, database hosting and reporting. We even provide training and the end user reporting tools. 

Accelerated Analytics® benefits:

• Eliminate manual data entry and manipulation
• Consolidate all retail data into one reporting database
• Pre-built exception reports with color coded dashboards
• No software or hardware to purchase
• Sophisticated charts and graphs

Available reports:

• This weeks sales and inventory by store and SKU
• Last weeks sales and inventory by store and SKU
• This months sales and inventory by store and SKU
• 6 week rolling sales and inventory by store and SKU
• Sell-thru
• Inventory turns
• Days supply on hand 

Accelerated Analytics® will give you the ability to anticipate changes in sales and inventory, so you can make adjustments before a costly mistake occurs. Our POS reporting is the best on the market.