Posted in Finance, Management, Strategy

Retail performance assessment

I hope this week you will trade some insights with me. This blog post outlines (most of) the key topics that I would typically address during a business performance audit. Feel free to take it and DIY.

But if you have any views about any ‘gaps’ or any ‘superfluous’ bits of analysis, I would love to hear your views. And I have a special reward/incentive for ONE of you.

STRATEGIC REVIEW
Typically we take a strategic view and try and understand whether the basic business model and retail proposition is sound. If it isn’t, then of course none of the subsequent analysis will be meaningful.
Typical discussion and analysis around the following topics:

  • What business are you in?
  • The Market Offer
  • Competition Analysis
  • SWOT Analysis
  • Key Issues
  • Positioning
  • Perceptual Map

[COMMENT]** I find the SWOT analysis usually is the area that adds least value.

MARKETING REVIEW
We then focus our attention on the market to try and understand the opportunity – and how the retail business attacks it.

Market Profile

  • Primary target market
  • Secondary target market(s)

Profile the typical customer (behaviour/lifestyle)
Marketing & Promotions Plan

  • Attraction Strategies
  • Conversion Strategies
  • Retention Strategies

Communications Collateral Evaluation

  • Signage
  • Print Advertising
  • Electronic Media


[COMMENT] ** I find most often that the message (the offer) made in an advertisement is most often poorly constructed.

RETAIL OPERATIONS REVIEW
The final stage of the review is of course how the retail proposition is executed. The main focus is on the retail mix.

1 Merchandise Plan

  • Store Entrance and Exterior:
  • Layout:
  • Product Displays:

2 Pricing Plan
3 Sales Support Plan
4 Financial Plan

  • Stockturns
  • The Average Sale
  • Key Financial Ratios
  • Key expense ratios
  • Capture rate
  • Conversion rate
  • Key Productivity ratios

5 Facilities Plan
6 Information Plan
7 Quality & Service Plan

[COMMENT] ** Although ‘PEOPLE’ is arguably the most important facet to be addressed, I find that (as an external consultant) this is very hard to get a real handle on until you have built up a good relations hip and deep knowledge about the business.

For the reader who makes the most insightful comment, I will send you a spreadsheet that we use as our ‘input’ sheet which you can then populate with your own data. I will then run it through our financial model (including benchmarks we may have) and send you the results – FOR FREE – to thank you for your input.

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2 thoughts on “Retail performance assessment

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