Here is the third entry: Estimated Sales in the Twelve Components You Need in Your Merchandising Plan. Before buying new items or new lines consider what it is going to take to maximize selling opportunities. There are only so many items your store can afford to promote and so much display space to inventory items. Resist expanding your categories too much. Remember, customers are very interested in reviewing extensive selection.
Take a realistic view of what your sales staff is capable of selling and know that products outside their current capabilities will require more sophisticated training. If you don’t current have access to sophisticated sales training be sure you really know what it is going to cost and that you have the resources available to invest in superior sales training. Your capabilities must be realistically evaluated and matched to the jewelry that is offered by the store.
Looking at historic sales is like driving a car using the rear view mirror. You only know what is behind you and your focus is not on what is ahead of you. Historic sales is never accurate at providing a real view of customer demand. What about those out of stock items that are not represented in your historic sales? What about the items that required monumental selling skills and excessive discounts to move? Just looking at historic sales is a very risky proposition when it comes to inventory management.
How do you identify trends in fashion, accessories and jewelry that are uniquely appealing to your targeted customers? Have you trained your employees how to accurately report shopper demand for inventory items not currently handled by the company? Do you keep a record of items requested by shoppers; even if you are able to sell the shopper something else? Do you track new items carried by your direct competitors?
Consider how a change in personnel can have an effect on the type of jewelry sold in your store. Sales associates often have their own preferences in jewelry they like to sell and have their own sets of strengths and weaknesses. The competency of your sales staff is an excellent reason to fluctuate the level of inventory carried in your store.
Now that credit has gotten tighter, how has demand for products changed in each category? What sort of automated sales reports do you get that can help you better match inventory to customer demands? Do you track out of stocks and product requests for items the store currently does not stock? Estimating sales should be an integrated activity that involves marketing, sales and merchandising personnel. This is the time to pay close attention to the extremely value oriented customer in 2009. Estimating sales is a very demanding activity that can pay big dividends.
What questions or examples can you provide regarding estimating sales?