Analyzing Business

Analyzing Business

Introductory Training Course for Store Managers

Agenda

Analyzing Business

Presentation and Group Discussion (30 mins.)

• Define variables that impact our business performance

• Review the resources available to you in division for these variables

• Discuss examples of these variables in our business

Activity: practice identifying variables (10 mins.)

Marketing

Analyzing Business

What is marketing?• Marketing is communicating a message to the customer• Activities include: advertising, promotions, in-store signage, and

visual display

What resources are available?• Visual books provide examples of window displays and in-store

signage• Talk to business partners, such as Visual and Merchandising to learn

about marketing plans

Marketing Example

Analyzing Business

• What message is conveyed to customers about styles that are featured in the store windows or on a front table?

• What’s the impact to sales?

Competition

Analyzing Business

Where does competition come from?• Other companies (e.g. Target, Macy’s, J Crew)• Other company brands (Old Navy, Gap, Banana Republic, Outlet)• Other items within the store (e.g. knit dresses vs. woven dresses)

What resources are available?• Visit other companies and brands to understand product assortment,

pricing strategies, and visual point of view.• Review other companies online sites to learn key messaging

including new products, key trends and pricing changes.• Visit our own stores to learn what customers like/dislike,

opportunities for improvement in product, pricing and store placement.

Competition Example

Analyzing Business

What can we do to differentiate our brand’s style?

Example: women’s rib tank top

Special Events

Analyzing Business

What are special events?• Special events include holidays, promotions, or Give & Get (Friends &

Family). • Can account for increase in sales.• Watch for holidays that shift dates every year as this impacts

customer traffic.

What resources are available?• Review information from Marketing, Company Planning, and other

business partners.• Look at fiscal calendar and identify holidays that may have impacted

sales.

Special Events Example

Analyzing Business

Easter 2008 Easter 2009

• How long before Easter do customers typically shop?

• What impact will the Easter date shift have on sales?

Fashion and Product Trends

Analyzing Business

What is fashion?• Defined in multiple ways, including:

Vision of the designer Interpretation by the masses Expression of the individual All of the above

• Mix of the past and the present• A fashion trend reflects the latest style

What resources are available?• Analyzing where different fashion and product trends are in their life

cycle (emerging, peaking, or fading) can help you understand business performance.

Fashion and Product Trends Example

Analyzing Business

What can we do when sales of knit dresses are starting to decline?

Jan Feb March April May June July August0

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New Products & Store Concepts

Analyzing Business

What are new products and store concepts?• New products can range from a new wash for an existing denim

program to a new category, such as sunglasses. • New store concepts typically are collections of product, for example

“Red” at Gap.

What resources are available?• Information on new products and store concepts are communicated

through business partners including Merchandising, Design and Visual.

New Products & Store Concepts Example

Analyzing Business

Banana Republic’s Monogram Collection

The Monogram product collection highlights the elegance and refined expression of the brand through quality fabrics and details.

Distribution

Analyzing Business

What is distribution?• Each brand has different store groups based on store capacity.• Store groups can range from all stores to only flagship stores.• Merchandising works with Visual to determine how many programs

can be distributed to each store level.

What resources are available?• Assortment Costing Tool (ACT): store level information available.

Report lists all styles and cc’s for a season and specifies store level distribution by cc.

Distribution Example

Analyzing Business

Key driver programs are typically distributed to all stores since the larger store grouping provides the best opportunity to maximize sales.

Inventory Ownership

Analyzing Business

What is inventory ownership?• Weeks on hand (WOH) is a key metric to review to determine if a

program had sufficient inventory to support sales.• Low WOH can indicate that sales were lost due to lack of inventory.• Best way to determine if WOH is high or low is to compare similar

programs in the same department.

What resources are available?• Mid-Week Sales Trend, Week-Ending Sales Trend, Monday Morning

Recaps and MARS Ad Hoc reports: all contain WOH information by program.

Inventory Ownership Example

Analyzing Business

• Assuming all of these programs are comparable, what do you notice about the WOH data?

• What does this suggest about inventory?

Basic T Pocket T Scoop-Neck T V-Neck T Long-sleeve T0

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9

3.2

5.77

6.4

7.8

WOH

WOH

Product Flow

Analyzing Business

What is product flow?• New product assortments are delivered throughout the year to the

stores in structured groupings called flows. • The timing of each flow is determined based on seasonality (i.e.

climate), holidays (e.g. Thanksgiving), and customer traffic patterns.• Examining the affect of product flow may indicate opportunities to

improve your business.

What resources are available?• Assortment costing tool (ACT): product flow information is available

in ACT. Reports provide flow description, season code, in-store dates and number of weeks at regular price at the program and cc level.

Product Flow Example

Analyzing Business

All short sleeve programs are beating plan and have an APS twice the rate of long sleeve programs.

What does this indicate to you?

Short Sleeve T-shirt

Long Sleeve T-shirt

Pre-Fall Flow: September APS

APS = 5APS

= 10

Price Point

Analyzing Business

What is price point?• Retail ticket prices are determined by Merchandising. • Factors considered when deciding on a retail price include historical

analysis (sales performance and price relationships of past programs), pricing on similar product in competition, costing of the product and customer perception of the price versus value relationship.

What resources are available?• Assortment costing tool (ACT): price-point information is located in

ACT at the program level.

Price Point Example

Analyzing Business

Short Sleeve T-shirt

Long Sleeve T-shirt

Units shipped = 60Units sold = 56

Increase the retail price on similar programs that haven’t shipped yet from the factory…

$29.99 $34.99

Analyzing Business

Any questions?