How to Drive Growth in Retail Challenges

Last week, I spoke with a VP of Merchandising from a large brand. They shared their struggle with increasing average transaction value 💰 Their strategy: Daily sales report analysis to craft promotions and bundles. The goal? Boost transaction value. The result: Smaller purchases, no significant progress 😮 My advice: Dive deeper. Beyond conventional tactics, explore seasonal patterns, basket analysis. Differentiate. Here's the reality 👇 - 2023 has shifted consumer spending habits - Overused discounts are losing impact - Traditional strategies are outdated - Promotions matter, but they're not the complete answer It's time for a new playbook in fashion retail 📕 1. Get Smart with Stock: Look at what sells best in combinations with other articles. Ensure your stores carry these gems in sizes that combine well with other assortment. This way, you are not just selling single items, you are increasing overall transaction value. 2. Match Winners with Demand: Focus on the combos and sizes people love the most. Plan these assortment mixes according to the stores’ demand. Your goal is to have these ready and waiting in the stores that need them. 3. Fill the Gaps Creatively: If some stores are missing combos, get creative. Introduce combinations that not only fill the space but also make you more money where there's a real want for them. We're talking high-margin, demand-driven combinations. Pro Tip When customers can't find what they're looking for within their budget, let's turn that moment into an opportunity. Offer them an exclusive, one-time discount on a higher-priced combo. This strategy not only moves our overstocked, high-margin items but also keeps our profit margin healthy. It's a win-win: customers feel valued with a deal just for them, and we increase the sale's value. Manual methods can't keep pace with today's demands, but the right technology can transform challenges into opportunities. Leverage data, automation, and customer insights for a real change.

During my years in retail I noticed two distinct decision-making camps - the gut-feelers vs. the analytical. It was always a matter of pride as to which camp you belonged to. Gut-feelers thought they were superior because their insights were driven directly from being in touch with the average consumer. The analytical camp thought that they were more reliable because they were uncovering stated and unstated patterns through their analysis of shopper data. For me though, we've got to marry up the two. And this is how I delivered a category turnaround of 40% top-line growth on the declining ready-to-heat pizza category. 1️⃣ Start with data. Because, data never lies. Data showed me that even though everyone wanted to sell $5 pizzas, we simply could not afford to do it. And no, selling more pizzas at a unit loss would not grow the category sufficiently to rub away the losses. 2️⃣ Apply intuition. Visit stores, check out what your competition is doing. Put yourself in the customers' shoes, or better yet, chat with them. This is how I figured out that the $5 price point was a must-have. We just had to find a more profitable way to deliver it. 3️⃣ Challenge assumptions. When folks claimed that the strong sales was linked to $5 promotions, my data showed that it was not the promo price that was doing the trick, but it was the ad and display support that was driving consumption. 4️⃣ Build scenarios. Use the data on hand to test out different scenarios. Using historical data, I built different 4P scenarios to see which would give us the best results with minimal change. How many SKUs would we carry, where would we carry them, would they be EDLP or promoted? 5️⃣ Set up feedback loops. Afraid to see how your initiatives pan out? Forget about being right.. Care more about finding and fixing gaps. I established Units/Store/Week/SKU goals and monitored them obsessively. Some may say I went a tad crazy for a while there. But, it delivered results. Because, I could use this to course correct immediately. The result was market share growth, top-line growth, and gross margin growth - the trifecta. So, next time someone tells you you've got to pick sides of gut-feel vs. analytics, stick to the middle.

CannaBrands, here are 5 strategies which I’ve found consistently drive profitable and efficient growth without costing any extra money 1. Increase your focus on high value customers—I used to conduct quarterly business reviews with our biggest dispensaries where I’d calculate how much money they lost each day when they stocked out of our product and resorted to selling cheaper substitutes. I’d also prime them for upcoming new product launches. This is a time to show them how you can support their success, not how superior your product is. 2. Target the geographies where your prime demographic shops—our brand packaging, product formats, and price points appealed to soccer moms and high tech employees who shopped at Costco and weren’t as price sensitive. This is a main reason our highest volume stores were concentrated in Bellevue, Redmond, Issaquah, and Kirkland. (If you’re not familiar with the Seattle area, this is where Microsoft, Costco and T-Mobile are headquartered) 3. Offer to set up Vendor Managed Inventory—partnering with a customer in this way will cut down on phone calls, emails and delays in your sales process. Make sure you keep the trust that you’ve earned. Don’t overstep by overselling. 4. Focus on regions where you’re not getting your fair share of the business—some states publish free sales data by county. In Washington, it was 502data.com. Since we had statewide presence, I’d compare our geographic revenue mix to the industry’s, and if we under-indexed in a highly populated county, I’d target the biggest stores in that area. 5. Land and Expand in your stores—new stores would often buy only one or two of our product lines at the start. So I’d incent the sales team to sell-in additional lines over time using the formula: 100 stores in your territory x 10 possible product lines = 1000 total lines. The incentive $$ stepped up when your stores portfolio hit 40%, 50%, and 60% of that 1000 total. There you have it. 5 strategies which require some extra effort, but no extra money to execute more profitable and efficient sales growth. I guess that’s not 100% true—the commission checks will be bigger, but that’s a good thing, amirite? What strategies and incentives have you found successful? #fractionalcfo #cannabisindustry #consultingservices