January 15, 2015

Hippoman's Big And Tall: Good Customers vs. New/Existing Merchandise

Last time we studied Hippoman's, we saw that productivity isn't always in decline. Summer productivity is flat, and November productivity is improving.

Let's look at productivity among 2x buyers, for new items and existing items.

Here's new items.

Ok, now we're getting somewhere, aren't we?!!

Look at January - June 2013. Productivity increased, didn't it? Customers spent more on new items.

Then we have September - December 2013. A catastrophe. New item performance cratered.

Now look at January - June 2014. Holy cow! Mr. Hippoman's team must have cut way, way, way back on new item introductions, because those kind of metrics are just catastrophic.

More on new items in a moment.

Here's the comp segment analysis for existing items.

HOLY COW! OMG! And whatever term you want to add to exclaim the reason this business is failing. We've figured out a major component of business failure, haven't we?

What do you see, when you compare this table to the comp segment analysis of new items? Study both tables closely.

In 2013, new item comps were -2%, while existing items comps were +7%.

In 2014, new item comps were -29%, while existing item comps were +4%.

Mr. Hippoman is literally starving his customer file. His merchandising team either decided to stop offering new items at historical rates, or his merchandising team decided to offer new items that customers hated. We'll have to research this trend further, no doubt about it.

This analysis - these two tables - continually reveal business challenges across my client base. New items on the merchandising side are as important as new customers are on the marketing side.

Can you see why it is so critical to run a comp segment analysis on the total business, on new items, and on existing items?