Subtle Changes Over Time

Sometimes I'll step back and look at changes across several years. Many clients don't realize the subtle changes they've caused.

In the business we're studying, there are subtle changes worth pointing out.

Comp Rebuy Rates:  -6% vs. three years ago. Not ideal.

Comp Segment Demand:  +1% vs. three years ago.

Comp Items Purchased:  -8% vs. three years ago. Yup, this company is selling more-expensive items over time. The COO is probably looking at downsizing operations folks, the CFO might be happy if gross margins are up. Always remember that items = customers. It's not a bad thing if management has metrics moving in odd directions with a top-line that is steady/growing. It's almost always a bad thing when fewer customers buy from a client.

Comp Item Price:  +9%. Wow.

Comp Full Price Selling:  -4%.

Comp Off-Price Selling:  +11%. The two metrics tell a story, don't they? The likely story is that merchants are increasing prices when they offer new items, customers rebel against the merchants, so the marketing team offers discounts/promotions which customers accept. #ohboy

Comp New Items:  +5%.

Comp Existing Items:  -2%.

I create the metrics (above) to cut through all the BS a consultant hears from "some" members of the Management Team. The business I'm analyzing here had an ownership team who wanted to "transform" the brand. After digging into the numbers and speaking with members of the Management Team, it was clear there wasn't trust/harmony between the Ownership Team and the Management Team. 

The core problem wasn't merchandise ... the core problem was trust.

As it so often is.

You run these metrics for your business ... right? Of course you do. You like to know what is happening, you like being smart.

Every business has customers shopping across micro-businesses / categories. Every business has interpersonal dynamics between ownership / management / employees that spill over into the customer relationship. The consultant / analyst cuts through all the nonsense, identifying core issues impacting the customer.