April 26, 2022

Looks Good On The Surface

Here's a sleepwear category. On the surface, sales look good, they're increasing.


But "how" are they increasing?

In the past three years, we've seen a huge change in how sales are generated.

  • Items selling at/above their historical average, new items ... -72%.
  • Items selling at/above their historical average, existing items ... +8%.
  • Items selling below their historical average, new items ... -70%.
  • Items selling below their historical average, existing items ... +106%.
Oh oh.

Three years ago about a quarter of what was sold was existing items at a discount.

Today, about 60% of what is sold is existing items at a discount.

So the sales gain is mostly meaningless.

It's hard for the CRM folks to measure their lifetime value stuff and make judgments about how much to invest in marketing channels if they have no idea how the merchants are playing around with margins. Things might look good on the surface, but drilling down just a little but changes the story (in this instance).




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