How can you use merchandise performance analysis to avoid slow-moving inventory?

1 What is merchandise performance analysis?

Merchandise performance analysis is a method of measuring and comparing the sales, profitability, and inventory levels of your products or product categories. It helps you identify which products are performing well, which ones are underperforming, and which ones are obsolete or excess. By analyzing the data, you can make informed decisions about how to allocate your resources, adjust your pricing, plan your promotions, and manage your markdowns. Merchandise performance analysis can also help you forecast future demand, optimize your assortment, and improve your customer satisfaction.

3 How can you use merchandise performance analysis to avoid slow-moving inventory?

Merchandise performance analysis can be incredibly beneficial in avoiding slow-moving inventory, which can have a detrimental effect on your business. To identify which products or product categories are slow-moving, you should look at their sales volume, sales value, sell-through rate, and weeks of supply. To determine the reasons why your products are slow-moving, consider their gross margin, customer feedback, and market research. You can take action to improve the performance of your slow-moving products by adjusting pricing, offering discounts or incentives, creating bundles or cross-selling opportunities, or launching marketing campaigns. Finally, to decide whether to keep, liquidate, or discontinue your slow-moving products, examine their potential demand, profitability, and inventory costs. All of these strategies can help you increase your sales and reduce your inventory.

4 What are some best practices for merchandise performance analysis?

To make the most of merchandise performance analysis, you should set clear and realistic goals and targets based on your business objectives, market conditions, and customer expectations. These goals and targets should be specific, measurable, achievable, relevant, and time-bound. Additionally, you need to choose the right metrics and data sources for your analysis. It is important to use metrics and data that are accurate, reliable, and relevant to your products and business. Combining quantitative and qualitative data is necessary for gaining a comprehensive picture of your performance. A consistent and systematic approach should be used for collecting, organizing, and analyzing your data. Your analysis should also be conducted at regular intervals with periodic reviews of the results. Lastly, you need to communicate and act on your findings and recommendations by sharing them with your team, suppliers, and stakeholders. Implementing recommendations promptly is essential for monitoring their impact on your performance.

5 How can you learn more about merchandise performance analysis?

If you want to learn more about merchandise performance analysis, you can read books, articles, blogs, or case studies on the topic. You can also take courses, workshops, or webinars to gain the skills, tools, and techniques of merchandise performance analysis. Additionally, consulting experts, mentors, or peers can provide valuable advice, feedback, and guidance on the subject. There are many resources available online and offline that can help you understand the concepts, methods, and applications of merchandise performance analysis.

6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?