You know the drill. It’s Monday morning, a new fiscal week, and the time has come to delve into your reports to dissect the misses and wins from the previous week. “Reading the Business,” a phrase commonly used in retail companies, refers to the efficient and effective analysis of a category, that yields strategic actions to be executed as a cross-functional business team. This information is then presented out to a larger team during weekly recap meetings, which includes members of the buying, planning, marketing, and finance organizations.
While “Reading the Business” may instill anxiety in some, it is important to understand that this is a pivotal in-season activity that allows for planning and buying teams to rightsize stagnant inventory investments and impact future strategies. Here are some key considerations when evaluating your weekly business performance.
Context, Context, Context
Before jumping into quantitative analysis deeming whether category performance was “good” or “bad” last week, it is crucial to gain context around the week you are “reading” and recapping. Ask yourself the following questions:
- What was the promotional cadence last week?
- Did the total company see any unexpected traffic trends?
- Was there a major holiday last week that would have impacted sales?
- Were there any other factors such as a site outage or delays in the warehouse?
It is imperative to ground yourself in this information to help navigate through your performance metrics and understand any fluctuations to your forecast and/or year-over-year performance. Example: You see in the marketing calendar that a last minute, 24 hour site-wide promotion was turned on in an effort to drive sales velocity. As a result, the inventory levels of your basic styles are depleted and your margin rate is much lower than forecasted. Had you not referenced the marketing calendar, you might not have understood what prompted the hit to your margin and unexpected turns.
Don’t Get Lost in the Data
In today’s retail climate, planners and buyers have access to an abundance of data, which can be obtained quickly and easily. While this cornucopia of reporting can lend to deeper insights into business performance, it can also very well lead planners down a path of “analysis paralysis,” or the over analysis of a business and the subsequent distraction from key takeaways. Monday business recapping is a time-sensitive process requiring a speedy turnaround, therefore the planner must select the best resources that will provide the most compelling takeaways. Having data all in one place makes this process even more seamless as it prevents laborious ad-hoc pulls, multiple databases running concurrently, and the risk of disparate information.
Example: After an initial assessment of your category’s business performance, you see that there is a high level trend of out-of-stock issues in certain sizes and a 2 percent decline in traffic to your smallest subcategory. You decide to focus your time on understanding size selling trends versus digging into traffic history in an effort to prioritize your time.
What’s the Story, Morning Glory?
So you’ve analyzed your business and now clearly see the issues driving your forecast miss. The next step is to articulate these findings during your business recap, which an array of representatives spanning the organization might attend. The key to presenting a successful recap is knowing your audience, clearly articulating your findings, and presenting thoughtful action steps. The art of storytelling is imperative here. A common issue with planners is that meaningful analysis is not articulated effectively to an audience. This can happen in many ways: too many numbers are presented without context, ancillary issues are presented prior to the main takeaway, planning jargon is used and therefore not understood by individuals outside of that functional area. To avoid falling into this trap, keep your recap simple, direct, and arranged in order of importance. Check your calendar invite prior to the meeting to see who will be attending and alter your verbiage accordingly. And a great final check: if you had to summarize your story in 30 seconds, what would you say?
Example: You are recapping the business this week and see that the entire design team will be attending. In order to tell a clear, coherent story that this team will understand, you rely less on the presentation of numbers and more on adjectives describing performance. To provide context, you kick off your recap with a brief overview of year to date business results. You and your buying team decide to focus the recap on attribute and trend performance metrics, as this will help inform design decisions.
For more information on how to accurately forecast demand, make adjustments to a plan, and overcoming the challenges of inventory planning, download A Guide to Inventory Planning. To learn more about how Stitch can help you with inventory planning, learn more about our product here.