Holiday Spending to increase 11%

Shoppers in the United States plan on spending an average of $646 on gifts this holiday season, representing an 11% increase over the $582 they planned to spend, on average, in 2012, according to Accenture’s annual holiday shopping survey. The forecast uptick is more optimistic than other holiday surveys released to date.

“The average dollar spend is trending up, and we are seeing a consumer mindset shifting from ‘cautious’ to ‘sensible,’ which is good news for retailers,” said Chris Donnelly, global managing director of Accenture’s Retail practice. “However, retailers are mindful that during the 2013 Thanksgiving-Christmas shopping period, they will have six days less in which to tempt shoppers through their doors, so many will go big and go early.”

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Deloitte: U.S. holiday sales expected to rise 4% to 4.5%

Deloitte’s holiday sales forecast points to further signs that the economy is recovering. Holiday sales are expected to climb to between $963 and $967 billion, representing a 4% to 4.5% increase in November through January holiday sales (excluding motor vehicles and gasoline) this year from last year’s season. 

The growth rate is on par with last year's 4.5% gain. In addition, Deloitte forecasts a 12.5 to 13% increase in non-store sales. Nearly three-quarters of non-store sales result from the online channel with additional sales coming from catalogs and interactive TV.

Deloitte also anticipates that mobile-influenced retail store sales will account for 8%, or $66 billion, in retail store sales this holiday season, driven by consumers' store-related smartphone activity such as product research, price comparison or mobile application use.

"We anticipate non-store sales growth will continue to surpass overall retail sales growth," said Alison Paul, vice chairman, Deloitte LLP and Retail & Distribution sector leader. “In addition, shoppers researching their purchases electronically, via their PC, tablet or mobile phone, are increasingly influencing in-store sales, particularly as we see greater integration across retailers' store, online and mobile channels. More retailers are offering services such as 'buy online and pick up in store,' as well as inventory from other locations and price matching on the spot. The store is still a core element of holiday shopping, and retailers leading the way this season will be those that effectively bring together their pricing, promotions, merchandise and inventory management across both their physical and digital storefronts."

source: www.retailingtoday.com, Dan Berthiaume 

Hudson’ Bay to Purchase Saks Fifth Avenue

Canadian retailer Hudson’s Bay, parent company to Lord & Taylor stores, has agreed to purchase Saks Fifth Avenue, based in New York City. The buyout is expected to close by year end.

The combination of these three brands will make the company one of the largest luxury brand retailers in North America, with over 320 stores.

During a conference call with investors, Hudson's Bay Co. Chairman and CEO Richard Baker said the goal is to bring Saks luxury brand into Canada. The company plans to open up seven Saks Fifth Avenue stores and 25 Off Fifth outlet stores to Canada.  "With the addition of Saks, (Hudson's Bay) will offer consumers an unprecedented range of retailing categories and shopping experiences," Baker said.

Global luxury sales, including higher-end jewelry and clothes, rose an estimated 10 percent to $281.96 billion last year, according to the latest study from Bain & Co. In North America, luxury sales were up an estimated 12 percent to $81.33 billion.

Accelerated Analytics Completes Acquisition of afterBOT POS Reporting Business

Bradenton, FL June 12, 2013—Accelerated Analytics®, a leading provider of retail point of sale reporting, announced today it has acquired afterBOT’s retail POS reporting business.  The acquisition further expands the market leadership of Accelerated Analytics as the go to provider for retail point of sale reporting solutions. 

“The acquisition of the afterBOT point of sale reporting business is a key strategic step in our growth strategy for Accelerated Analytics.  We are looking forward to servicing the existing afterBOT customer base, and bringing new capabilities to our existing customers.” said Chad Symens, President and CEO of Accelerated Analytics.

As part of the Accelerated Analytics family afterBOT customers will now have opportunities to expand their retail point of sale reporting through:

• Multi-retailer reporting.  Accelerated Analytics provides reporting for over 100 retailers.  Customers will now have the opportunity to access POS reporting for all their retail customers in a single set of reports.  
• Expanded reporting tools and capabilities including the ability to customize reports and add other non-POS data like shipping. 
• Mobile access to reports on the iPad and iPhone.

As part of the agreement afterBOT has licensed IP to Accelerated Analytics for servicing the current customers which can also be considered for new opportunities in the future. 

Lowe's Enters into Purchase Agreement with Orchard Supply Hardware

MOORESVILLE, N.C., Jun 17, 2013 (BUSINESS WIRE) -- Lowe's Companies, Inc. LOW +0.51%  , the world's second largest home improvement retailer, today announced it has entered into an asset purchase agreement with Orchard Supply Hardware, under which Lowe's will acquire the majority of Orchard's assets for approximately $205 million in cash, plus the assumption of payables owed to nearly all of Orchard's supplier partners. Upon completion of the transaction, the acquisition will enable Lowe's to expand through a new store format and reach a new customer base in California with the addition of Orchard's smaller-format metro store locations. Lowe's plans to have Orchard operate as a separate, standalone business, retaining its brand under the leadership of Orchard's current management team.

Based in San Jose, California and with fiscal 2012 annual revenue of $657 million, Orchard currently operates 91 neighborhood hardware and garden stores primarily located in densely populated markets in California. Under the terms of the transaction, Lowe's would acquire at least 60 of these stores based upon further due diligence on the locations. On average, the Orchard stores, which offer a product selection focused on paint, repair and backyard categories, include approximately 36,000 square feet of selling space, compared to 113,000 square feet of selling space for an average Lowe's home improvement store. Lowe's currently operates 110 stores in California.

The transaction is expected to be consummated through a court-supervised process under Section 363 of the U.S. Bankruptcy Code and is subject to an auction and Bankruptcy Court approval. The agreement with Lowe's will serve as the "stalking-horse bid" in the auction process. Earlier today, Orchard filed a petition for relief under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware.

Robert A. Niblock, Chairman, President and CEO of Lowe's, said, "Orchard's neighborhood stores are a natural complement to Lowe's strengths in big-box retail, offering smaller-format hardware and garden stores catering to the needs of local customers. Strategically, the acquisition will provide us with immediate access to Orchard's high density, prime locations in attractive markets in California, where Lowe's is currently underpenetrated, and will enable us to participate more fully in California's economic recovery.

"Overall, Orchard's business model offers great potential but it has been burdened with a high level of debt. With the debt addressed through the Chapter 11 process and appropriate support from Lowe's, we believe that Orchard will be positioned for profitable growth as a standalone business within our portfolio," added Mr. Niblock.

Subject to the auction process, Court approval and customary regulatory review, the parties anticipate the transaction will close in approximately 90 days. Under the terms of the agreement, Lowe's would receive a break-up fee of 3 percent of the purchase price should it not be successful in acquiring the Orchard assets. In addition, subject to Court approval, for an alternative bidder to be successful, it must outbid Lowe's by a minimum of $12.0 million, representing $5 million in addition to the break-up fee and an expense reimbursement of $850,000.

Goldman Sachs is acting as financial advisor to Lowe's, while Hunton & Williams LLP is acting as legal advisor.

With fiscal year 2012 sales of $50.5 billion, Lowe's Companies, Inc. is a FORTUNE(R) 100 company that serves approximately 15 million customers a week at more than 1,750 home improvement stores in the United States, Canada and Mexico. Founded in 1946 and based in Mooresville, N.C., Lowe's is the second-largest home improvement retailer in the world. For more information, visit Lowes.com.

JC Penney Home Goods Strategy

JC Penney has launched a new home goods strategy that includes expansive home goods boutiques at 500 of their 1,100 stores.  CEO Ron Johnson calls the strategy “pivotal” to his efforts to revive Penney.

For seven years, home goods have been Penney’s worst performing category. The home category accounted for only 12 percent of sales in 2012, compared to 21 percent in 2006.

Penney’s neglected the home goods area to focus on improving its fashion collection, leaving consumers to choose from uninspired, deeply discounted goods. Penney’s new home goods section will be anchored by top designers, such as Jonathan Adler, Michael Graves, Sir Terence Conran and Martha Stewart.

The new home area will occupy up to 19,000 square feet of space, more than twice the size of a Williams-Sonoma store. Their desire is to bring in younger shoppers with attractive brands. They will also organize products by category at a variety of prices, and hold sales events and offer discounts.

Penney’s spokesperson Ellen Degeneres highlighted the JC Penney home goods boutiques on her show Thursday, May 30, by treating a family in need from Georgia to a shopping spree that replaced everything in their house from furniture to window treatments, bedding, dishes and accessories. They showed the boutique in an on-site store visit. The family was also awarded $15,000 from JC Penney to help them with expenses. Ellen’s show also gave each audience member a $100 gift card to spend at a JC Penney.

Kohl’s Corp. Hires Starbucks Marketing Executive Michelle Gass

Kohl’s Corp. has hired Starbucks’ Michelle Gass, the executive responsible for developing the then new Frappuccino into a $2 billion a year business that makes up one fifth of Starbucks sales.

The move is part of Kohl’s strategy to recapture the growth it enjoyed in the 1990’s and early 2000’s. "We probably got a little complacent and I think there was too much sameness," said chairman, CEO and President Kevin Mansell in an interview last week.  A difficult Christmas selling season in 2011, followed by inventory problems the following spring — Kohl's missed big on colored denim, for example — reinforced the need for change.

"We completely re-invented our merchandising leadership — our buying, our planning and our product development," Mansell said. "We completely re-engineered our information technology area with new leaders."

As "chief customer officer," Gass will oversee the critical marketing function, the company's rapidly growing e-commerce business and what retailers have taken to calling the "omni-channel" approach — a blending of Internet and brick-and-mortar shopping.

"She knows the Kohl's brand," Mansell said. "She's a mom. She understands the store. She understands the brand. She understands the challenge. She's executed something similar to what we need to do here."

COTY INC INITIAL PUBLIC OFFERING

Perfume maker Coty Inc. (COTY) is seeking as much as $1.1 billion on behalf of its shareholders in a U.S. initial public offering set for June 12. The company’s owners, including private-equity firm Berkshire Partners, plan to offer 57.1 million shares for $16.50 to $18.50 each. Coty will not get any proceeds from the IPO.

New York based Coty filed for its IPO in June of last year, but delayed plans to complete the sale until this year, in part to give CEO Michele Scannavini, who took over the role August 1, 2012, time to acclimate.

Bank of America Corp., J.P. Morgan Chase & Co. and Morgan Stanley are managing Coty’s sale. Coty, which holds perfume licenses for brands that include Marc Jacobs and Calvin Klein, was founded in 1904 in Paris by Francois Coty.

Coty’s offering comes at a time when other publicly traded peers such as Estee Lauder and Avon have surged. Estee Lauder gained 19 percent and Avon 64 percent.

Combating Showrooming

The New York Times and Forbes have both recently approached an issue every retailer is struggling with: “showrooming”.

“Showrooming” is the phenomenon of customers browsing and researching the retailer’s products, only to purchase it elsewhere for a lower price.  Many big retailers such as Wal-Mart, Target and Best Buy are price-matching and requiring unique SKUs to try to combat this problem. But how can retailers combat “showrooming” and stay competitive at full price?

Brands and retailers must strategically work together to offer custom solutions to meet their shoppers’ needs. Forrester revealed that 35 percent of shoppers are interested in custom products. Making customization a core partnership strategy is key for growth and focuses on the customer experience. Nike launched a customization program that resulted in over $100 million in revenue.

Customization creates a partnership between customers and brands. Providing a unique experience for customers will cement their loyalty and they will not have any need to look to the competition. They will stay loyal to get products they cannot get anywhere else. Only through a strong strategic partnership between brands and retailers can “showrooming” be taken out of the equation.

Home Depot Reports Positive Q1 2013 Results

ATLANTA, May 21, 2013 /PRNewswire/ -- The Home Depot^®, the world's largest home improvement retailer, today reported sales of $19.1 billion for the first quarter of fiscal 2013, a 7.4 percent increase from the first quarter of fiscal 2012. Due to the 14th week in the fourth quarter of fiscal 2012, first quarter sales benefited from a seasonal timing change that added approximately $574 million to sales. On a like for like basis, comparable store sales for the first quarter of fiscal 2013 were positive 4.3 percent, and comp sales for U.S. stores were positive 4.8 percent.

Net earnings for the first quarter were $1.2 billion, or $0.83 per diluted share, compared with net earnings of $1.0 billion, or $0.68 per diluted share, in the same period of fiscal 2012. For the first quarter of fiscal 2013, diluted earnings per share increased 22.1 percent from the same period in the prior year.

"In the first quarter, we saw less favorable weather compared to last year, but we continue to see benefit from a recovering housing market that drove a stronger-than-expected start to the year for our business," said Frank Blake, chairman & CEO. "I would like to thank our associates for their hard work and commitment to our customers."

Updated Fiscal 2013 Guidance

Based on its year-to-date performance and outlook for the balance of the year, the Company raised its fiscal 2013 sales guidance and now expects sales to be up approximately 2.8 percent with comparable store sales up approximately 4.0 percent for the year. The Company raised its fiscal 2013 diluted earnings-per-share guidance and now expects diluted earnings per share to be up approximately 17 percent to $3.52 for the year. The Company's fiscal 2013 sales and earnings-per-share guidance is based on a 52-week year compared to fiscal 2012, a 53-week year.

The Company's earnings-per-share guidance includes the benefit of its year-to-date share repurchases and intent to repurchase $4.4 billion in additional shares over the remainder of the year, which will bring the total dollar amount of shares repurchased to $6.5 billion for the year. 

JC Penney Q1 Sales plunge

JC Penney reported a loss of $348 million for its first quarter, compared to $163 million comp last year amid a 16% decline in revenue.  The retailer is struggeling to recover from the business plans former CEO Ron Johnson had put in place.

JCP's new CEO Mike Ullman said that reconnecting with customer will take time and that they "recognized the magnitude of the challenges that we face, and we belive we can put JC Penney back on a pathway to profitable growth".   One of the strategies to put them back on track is to emphasize thier private brands.

Source: Marianne Wilson, Retailingtoday.com

2013 National Hardware Show

The Accelerated Analytics team spent the week in Las Vegas at the National Hardware Show meeting with customers and prospective customers.  Most of the attendees we spoke with feel the economy is comming back and the remainder of 2013 will be pretty solid.  That view seems to be supported by the performance of the major retailer stock prices but the macro economic data are a bit more uncertain.  Several buyers we spoke with from national retailers said they will continue to be cautious with inventory investment so vendors will need to be careful to monitor inventory WOS to avoid stock outs. The buyers also mentioned they are taking a careful look at SKU assortments and will be more aggresive with eliminating poor performing SKU's than in past years.  Vendors will need to be careful to analyze sales data and present an accurate but favorbale picture of SKU performance to avoid being on the chopping block.  When out of stocks are increasing due to lower on hand sales can take a hit that is not related to product quality so make sure you have the data to protect your SKU's.

Kohl's Digital Signage

I was shoping at Kohl's this morning and was somewhat surprised to see they are using digital price signs on all thier fixtures and racks.  I haven't been into a Kohl's for at least a year so I'm not sure if these are new or have been around a while.  Although the geek in me loves to see in store technology like this the business guy in me wonders what the ROI is on digital signs in a dept store.  I would be very interested in any commentary anyone would like to offer in regards to the installation price and payback on digital price signs vs. traditional paper tickets.  I can see the application in a grocery store where prices change frequently but in a department store I'm just not sure.

OfficeMax and Office Depot Merge

Office Depot and OfficeMax officially ended industry speculation today confirming they will merge into a single company.  OfficeMax shareholdersw will receive 2.69 Office Depot common shares for each share of OfficeMax common stock.

“In the past decade, with the growth of the internet, our industry has changed dramatically. Combining our two companies will enhance our ability to serve customers around the world, offer new opportunities for our employees, make us a more attractive partner to our vendors, and increase stockholder value,” said Neil Austrian, chairman and CEO of Office Depot. “Office Depot and OfficeMax share a similar vision and culture, and will greatly benefit from drawing on the industry’s most talented people, combining our best practices and realizing significant savings. We are confident that this merger of equals represents a new beginning for our two companies and will allow us to build a more competitive enterprise for the long term.”

“We are excited to bring together two companies intent on accelerating innovation for our customers and better differentiating us for success in a dynamic and highly competitive global industry,” said Ravi Saligram, president and CEO of OfficeMax. “We are confident that there will be exciting new opportunities for employees as part of a truly global business. Together, we will have the opportunity to build on our strong digital platforms and to expand our multichannel capabilities to better serve our customers and to compete more effectively. Importantly, this merger of equals transaction will provide stockholders of both companies with a compelling opportunity to participate in the long-term upside potential of the combined company.”

LIRA Indicates Home Improvement Spending to Rise

CAMBRIDGE, MA – All signs point to a strong rebound for home improvement activity in 2013, according to the Leading Indicator of Remodeling Activity (LIRA) released today by the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University.  Robust spending in the second half of 2012 suggests the remodeling recovery is already underway, and the LIRA projects annual homeowner improvement spending will see accelerating double-digit growth through the third quarter of 2013. This news comes just ahead of the release of the Joint Center’s biennial remodeling report, The U.S. Housing Stock: Ready for Renewal, scheduled for release next Wednesday, January 23.

“It’s encouraging to see the residential sector finally contribute to growth in our economy,” says Eric S. Belsky, managing director of the Joint Center.  “Through the first three quarters of 2012, investment in the residential sector was responsible for one out of every six dollars added to our GDP.  Moving forward, home improvement spending is expected to make an even larger contribution to GDP growth.”

“There are many external economic and political risks that could derail this remodeling recovery,” says Kermit Baker, director of the Remodeling Futures Program at the Joint Center.  “However, the solid momentum behind home building activity, existing home sales, low financing costs, and remodeling contractor sentiment all point to a solid start to the new year for home improvement spending.”

To read more about the LIRA visit thier website

Lowe's and Home Depot Increase Seasonal Hiring

This headline caught my eye this morning: ATLANTA - The Home Depot says it has already begun filling more than 80,000 seasonal positions to assist customers during its busiest selling season - 10,000 more than last year.  I thought this was interesting from two perspectives.  First, the fact that The Home Depot is planning to hire 14% more seasonal workers than last year is a positive sign.  That means they expect the busy spring selling season to be up over last year.   Lowe's is planning to hire 13% more seasonal workers this year also.  The Home Depot vendors that we track in our retail POS reporting service are trending up so far YTD so the data we have seems to confirm their expectation.  In addition, the Joint Center for Housing Studies at Harvard University said this month that spending on home improvement increased 9 percent in 2012.  The center found that people were spending more upgrading their homes after years of holding back, and that improvements to the 2.9 million homes in or at risk of foreclosure likely will represent sources for future spending growth.    The second reason I thought this was interesting was purely from a management perspective.  Put yourself into Tom Crow the VP Human Resources at The Home Depot for a moment.  Hiring 80,000 people is an enormous task and to accomplish that task in a short window of time must be daunting.  How exactly do you process that many applications, conduct interviews and background checks, and ensure that your corporate culture is preserved when you need to hire thousands of employees every week?      

Unnecessarily difficult

The objective of sharing POS data with vendors should be to make it as easy to access as possible and above all convenient.  To our dismay a significant retailer in the home improvement space charges vendors a significant sum of money to purchase a secure ID and then has the following availability "Normal hours of operation for this server are Monday, 9:30 AM to 7:30 PM and Tuesday through Sunday 7:00 AM to 7:30 PM central standard time unless otherwise noted".  So the hours that an analyst might be looking to catch up on the day's to-do list may well be unavailable which is highly annoying after speding a significant sum of money to purchase and ID to access the system.  Really?  Is it that hard to improve your system availability?  It almost feels like the 1980's all over again......

Five files that will enhance your EDI 852 reporting

After your company has EDI 852 reporting setup and you are able to analyze sales efficiently there are five additional source data files that can be added to your reporting to enhance your ability to understand sales.  Let’s spend a few minutes talking about each file.

Plan-o-gram assignment.  A plan-o-gram (POG) file identifies the SKU assortment that is sold at each of your customers stores.  These attributes are not part of an EDI 852 file so they must be setup and maintained in a separate file which can then be cross-referenced against your sales data.   A POG file will enhance your ability to (1) compare sales performance more accurately by allowing you to select truly comparable stores (2) allow you to compare the performance of the POG’s and report to your buyer on any changes that might improve sales.

Store grade data.  Not all stores have the same rate of sale so when you are reviewing a store sales report it is very helpful to have a performance grade to provide some context.  A simple A,B,C,D store grade will allow you to group and compare stores as well as monitor any changes in grade which might occur.  If you would like to know how to create a store grade download our Store Analysis How To Guide.  In addition to grading your stores based on your SKU’s sales performance you can request a store grade report from your buyer based on the total store sales.  Then you will have the ability to compare the grades and identify any variances.    

Demographic data.  After your plan-o-gram and store grades are in place you will have the ability to quickly identify stores that are performing above or below what you expect.  The next step is to attempt to discover why and demographics can often provide a clue.   Try studying the demographics of a group of grade A stores compared to a group of grade D stores and look for demographic characteristics that your marketing department tells you are important to your product sales.  These characteristics could be things like the number of housing units vs. apartments, income, race, age, etc.  If you find something interesting create a presentation with supporting data and discuss it with your buyer.  They can often provide feedback based on what their marketing teams are telling them and help you to identify your ideal demographic profile.

Account management.  If your organization has field sales or service teams adding a data file which identifies the team by store can help you quickly monitor performance.  Having this structure setup with your data also allows the field teams to more quickly segment their reports to focus on their stores. 

Sales goals.  When you are looking at sales performance at either a store or SKU level based on EDI 852 a very important piece of data is missing – the sales goal!  Is the SKU or store selling at the rate you expect and/or at a rate that will provided a positive comp from past selling periods?  If you load sales goals by SKU and store it becomes very easy to monitor performance against your objectives and it helps to keep everyone on your team focused on the right objectives.

EDI 852 data is a wonderful source of insight into what is happening at a retail store.  By adding the data files discussed above you can greatly expand your ability to quickly and effectively use the data and you will have the ability to figure out if you are hitting your goals.  Check out our free How To Guides for a more detailed explanation of some key analysis topics.  

Comparison of Christmas holiday selling period TY vs. LY

We spent some time reviewing Christmas comps and here are some data points and observations.  

Sample Group

• 38 vendors in the sample selling various product departments including paint, tools, cleaning, lawn and garden, storage, electrical, and lumber. 
• Sales numbers for Home Depot, Sears, Wal-Mart, Lowes, Target, CVS.

Results

• All vendors as a group were up 1.40% year over year on a unit basis, and up 2.75% on a dollar basis.
• The variability in the sample is high when comparing % change YoY across vendors and retailers.  The sample ranges from (40%) to 147% with the median being (0.21%) and the average being 11.4%.  
• Five vendors saw a negative unit comp and a positive dollar comp.  This is interesting because it suggests a higher average dollar value per sale.

Overall Christmas 2012 finished well for most vendors when comparing against last year when you take into account that five of the negative unit comps were offset by positive dollar comps. 

Demand Driven Planning in 2013

The availability of retail point of sale data over the past several years has created the opportunity for vendors to gain a detailed understanding of consumer demand at the retail point of sale.  Actual consumer demand at the retail point of sale presents a more accurate and timely picture of how your SKU’s are selling than retailer forecast advice or even retail purchase orders.  So why don’t all vendors collect EDI 852 or retail POS data from their customers and use it for creating forecasts and managing sales?  There seem to be several myths holding vendors back….

Myth #1: Collecting and analyzing EDI 852 / retail POS data is expensive and complex.  In a few limited cases like Home Depot and Menards it is true that the simple process of collecting the data has some expense.  Home Depot EDI 852 for example must be collected using a VAN so there are data transmission charges.  Menards charges a vendor to purchase a RSA SecurID.   But most retailers make EDI 852 or retail POS data available for free and even when there is a fee the benefits exceed the expenses.   Extracting the data, matching to item catalog details and store details does require some expertise but there are many SaaS applications now like Accelerated Analytics which will outsource the technical requirements for an affordable monthly fee.  By monitoring the consumer demand and inventory on hand at a SKU / store level of detail a vendor can proactively work with the retail replenishment manager to avoid out of stocks.  Every sale you get that would have been lost due to an empty shelf is returning value and paying for the expense of collecting and using the EDI 852 data.  How many lost sales do you need to recover a monthly data management fee that is typically less than $2,000?   At a chain like Home Depot with roughly 1900 stores in the USA the answer is not very many.

Myth #2:  My buyer won’t accept replenishment recommendations.  We hear this all the time – “I realize I could probably increase my in stock rate using EDI 852 / POS data but my retail customer uses automated replenishment or has a fixed open to buy plan so my recommendations fall on deaf ears”.  Several things are at work with this myth.  First, most vendors are operating on an assumption that if they talked to their buyer, they would discover is inaccurate.  I’ve talked to buyers at many retailers and I get a consistent answer – if the vendor can quantify the problem and provide an accurate order recommendation I will take it into consideration.  Second, the vendor has to demonstrate a competency in using the data for basic tasks like sales monitoring before they try to recommend orders.  I’ve seen countless examples of a vendor providing sales reporting and value to a buyer who then gains confidence the vendor can get the demand forecast right.  Finally, you have to start off slow.  Start with your highest turn products at your A volume stores and calculate the lost dollars sold for an 8 week period.  Then go to your buyer with a summary of your findings and actions to improve in stock and quantify the sales opportunity for both of you.  Make conservative recommendations to increase the WOS by one week so you gain back some sales but avoid loading the store with inventory and dropping your GMROI.  They have the same goal as you – to sell more product!

Every vendor that sells a product through a retail store should invest into analyzing retail point of sale data and using it for creating detailed action plans.  The data acquisition and reporting costs are very low when you consider them as a percentage of your retail sales and the upside benefits of increased sales, better assortment planning, and optimal inventory on hand are huge by comparison.  Let’s make 2013 the year that all vendors make the investment.