Ever wondered why you have so much discounted stock at the end of each season? Want to know how you can shrink your store’s reduced rack? Renowned buyer and industry figurehead Sarah Gale says every business could effectively streamline their operation and cut down costs by completing a post seasonal analysis.
Fashionista Business Consultancy Group director, Sarah Gale is synonymous with the fashion industry and is renowned for her astute business acumen and understanding of the Australian fashion retail landscape. She’s worked with major players Portmans, Sportsgirl, Kmart, Target, Witchery and Jacqui E.
For those who have never heard the terminology `post seasonal analysis’, in short, it is a `dissection of sales and profit figures to create an overall picture of season performance’. While at first this may sound time-consuming, and perhaps even a little confusing, Gale insists you will actually gain back time because your business will be running more efficiently.
“Whether you own one store or are a multi site operator, if you are neglecting this fundamental step in the buying process you are playing Russian roulette with your business.”
So what does it entail and how do we get started?
Throughout the season, Sarah recommends you break up the ranges into categories from dresses to denim, tops to knitwear and pants. “A lot of people buy in ranges and don’t look at where they are duplicating sales throughout the season,” says Gale.
“Often when you buy a full range you don’t always take this into consideration and so you should always ask yourself `how many pants options do I really need within my store?’.
Secondly, understand your business and define the customer segments you sit within.
“Quite often they know their mix, but don’t know the percentage and that is vital because you can overbuy in one area and completely ignore another,” she says. “So I can help them to really understand what that is.”
Thirdly, Sarah says you should assemble the figures of what you have sold over the season, then categorise this into different customer segments.
“Each business won’t have just one customer segment, it can often cross over into many different segments, but you’d be surprised how unbalanced many businesses are?”
After you have actioned this, then it’s time to analyse the overall sales results, markdown results and size breakups to really work out what has sold, what hasn’t and why.
“The why is what is really important, as that is where your key measure is,” says Sarah. “One of the hardest things for people to measure is missed sales.”
“Unless you have the training and analytical mind, doubled up with the mechanical mind and understanding of the market now, you will not be able to potentialise your sales.”
But this can be difficult, especially when you are so close to the business. Sarah knows that analysing during the season can sometimes be the worst time and you often can’t be as objective as you need to.
By having a close look at the gaps, Sarah says you are then able to clearly see which products have performed the best, and why you’ve been left with mark downs.
“It’s really important that you don’t just analyse figures, you analyse the figures and the merchandise, which allows you an opportunity to find the gaps during the season,” she says.
Over the years, Sarah has heard many businesses say `It just didn’t sell?’, but she believes there is always a reason. One of the major issues for a smaller business’ is they often tend to sell and re-buy within a repeated pattern.
“Once you know how to analyse, you can write up a succinct plan before you go to your next buy,” she says.
But it isn’t just small businesses that can benefit from a post seasonal analysis, Sarah says she has worked with multi-million dollar companies and even designers.
“I work with them to look at what they are offering their clientele, how their range looks, that it’s succinct and not duplicated and they are all getting great results,” she says.
Regardless of consumer or retail land, Sarah believes a post seasonal analysis will see your markdowns decrease, sales increase and profits improve.
“This analysis is key beyond all keys, this is the key to success in your business,” she says. “If you are going out to buy a new season you cannot do it responsibly without this analysis. “It should be part of your business planning budget, for the money you spend on a process like this it will save you buying stock you didn’t need.
“It far out ways the amount you spend on markdowns, and missed incremental sales, and that is the saddest part for me.”
And it doesn’t take long to get results, Sarah says for a business size of 15 stores and upwards, it can take two days to get through it which includes what options they’ll need going forward. For a smaller business it should only take a day.
“When you are going to bake a meal, if you don’t have the right ingredient to begin with then it isn’t going to work, so think of your stock as ingredients,” she says.
“My job is to skill people so they don’t need me all the time. I talk the business through everything I am doing, so they can understand and take it on, so when they are comfortable they can then do it themselves.”