July 04, 2022

Compounding The Problem, Part 1

We've talked about this issue for a few weeks (click here). It's everywhere, and it's gonna sort out weak companies from strong companies over the next nine months.

There are two issues that compound the problem. We'll tackle one of the issues tonight.

Here's what many of you are telling me is happening with new merchandise. Look at the "Class Of" table below.


Look at new merchandise sales by year ... $9.5 million then $9.0 million then $9.3 million and this year all the way down to $5.5 million. Yikes! And I get it, your merchandising team is going to tell everybody how hard it is to source merchandise during a pandemic-fueled supply chain crisis. Fine.

However.

However, look at what happens to each class of new merchandise in the next year. Three years ago new merch went from $9.5 million in the introduction year to $8.9 million. Then it went from $9.0 million to $8.5 million. Then it went from $9.3 million to $7.3 million. What do you think is going to happen to the paltry class of new merchandise from the past year? It's not going to go up from $5.0 million to $7.0 million ... it's going to go down, which means you will be short millions of dollars of sales next year because of the woeful Class of 2022.

You need to know about this now, correct? If you know about this now, you can plan your merchandising tactics for 2023 while asking your marketing folks for help to make up the sales shortfall.

This is one of the problems compounding what looks to be a difficult Fall/Winter season. Contact me (kevinh@minethatdata.com) if you want to see if this is a problem for your brand.




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