January 06, 2015

Hippoman's Big And Tall: Product Problems

After what I've observed over the past three years, I've learned to immediately analyze demand generated from new items. It's the first thing I try to do, and for good reason ... look at what we see here.

This graph illustrates rolling twelve month demand from new items. The item had to be new in the past year to be counted in this graph.

What do you observe?

Well, demand from new items held reasonably constant, at +/- $10,000,000 per year, through late 2013. Then, in early 2014, something happened. Either new item development was cut, or the merchants responsible for new items suffered through a horrific productivity meltdown. Through most of 2014, new items performed at +/- $7,000,000 per year.

Remember, this business was down about $4,700,000, between 2013 and 2014.

Already, by running just one graph, we've identified a big problem, haven't we?

Now, if the existing item graph looks similar, then something else is going on. Let's look at existing items.

Well, existing items are not performing well, but their performance is more in-line with the three year trend, isn't it? Interestingly, existing item performance absolutely cratered back in 2011. Mr. Hippoman's team did something back then to discontinue a bunch of existing items, or we wouldn't observe a trend that looks like the trend we're seeing in this graph.

Tomorrow, we'll see if there are merchandising issues that can be identified through customer metrics.