Every business is comprised of a series of micro-businesses / categories. Some micro-businesses are dependent on other micro-businesses, others move independently.
I evaluate micro-business movement in terms of comp segment performance on an annual basis. You remember comp segment analysis, don't you? I select all customers who bought exactly two times in the past year - then measure how much customers spent in a future period of time (in this case, one year ... in my Elite Program runs, it's the following month). I want to see how "good" customers behave.
In the case of the business I'm analyzing in this study, here is comp segment performance (annual) for the merchandise categories that have meaningful amounts of net sales.
- Category 02 = +19%.
- Category 03 = +6%.
- Category 04 = +8%.
- Category 05 = -12%.
- Category 06 = -18%.
- Category 07 = +12%.
- Category 10 = +22%.
- Category 11 = +41%.
- Category 13 = +8%.
- Category 15 = -13%.
- Category 16 = +10%.
- Category 17 = +5%.
Yeah ... #chaos.
In total, comp segment performance was +7%. In other words, the merchants as a whole are doing a very good job.
But at a micro-business / category level?
#ohboy
Remember Category 03 from earlier this week? The category had a significant sales decline ... and yet, "good" customers spent more in the category. This is even more sad ... because it means that declines caused by likely discontinuation of items from 2/3 years ago harmed new/reactivated buyers.
What are you seeing across your business, when you evaluate customer behavior at a micro-business / category level?
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