According to the Small Business Administration, the second leading cause of business failure is insufficient or delayed financial support. In many cases, this is brought about by a poor business credit score. If you are unaware, a business' credit score is similar to a personal credit score. A person's credit can be improved by paying loans on time and avoiding any reoccurring debt. Business credit is almost exactly the same with minor differences. In today's blog, we will discuss the...
C-Store Category Data is Your Friend
Keeping the right products in your store is about more than simply finding the ones you get a great deal on, the ones other stores are carrying, or even the ones customers have bought before. Deciding what products you should stock in your store, and how, should rely on a careful strategy. This strategy is called category management. While the large chains have corporate teams to study data and analyses to guide the right purchasing decisions, category management is an activity that businesses of all sizes should be doing. It may seem like just one more time-consuming task, but with the right data on your side, category management could become one of your most valuable activities.
Using the Right Data
As a c-store owner or operator, you have quite a few powerful category management (catman) data sources available to you. Your first step to a great strategy is gathering and assessing the data you have access to, some of which are probably right at your fingertips. Collect the following types of information to start your path to category management:
- Point-of-sale reporting – Today, there is a wide range of POS software and the reporting options that many are equipped with can be critical in understanding what your customers are buying and how much they’re spending.
- Retail measurement data – With this data, you’ll get a view of what is trending across many retailers. Third-party resources like Nielsen, IRI, or your own suppliers can provide this kind of data to help you understand where your store stands compared to others.
- Consumer panel data – The industry releases data frequently from panels of customers who voice their opinions on the various products they might find in a c-store. This kind of data can give you firsthand accounts of what customers really want.
- Income statement – Your very own income statement will provide you with great insight into the effectiveness of your category management, or lack thereof. The income statement will remain an invaluable asset as you make catman a regular practice, as you should continuously evaluate your strategy and adjust as needed.
- Balance sheet – Your store’s balance sheet will give you the information you need to consistently monitor your inventory levels over time. Also, you should be using your balance sheet to evaluate the true value of your products, especially if they are just sitting in inventory.
Make a Careful Analysis
Once you have collected your data, it’s time to analyze it. It’s important to pay attention to the assortment in each of the main categories. You may choose to divide your categories in another way, or even have sub-categories, but these should be the basis of your analysis:
- Candy & Snacks
When you’re doing your category management analysis, ask these questions:
- How much you spend on your inventory?
- What is your margin and is it profitable?
- Could you make more money with your current stocking standards?
- What products aren’t selling quickly?
- What products you are running out of frequently?
- What products customers spend the most money on?
- Which products are frequently sold together?
- What new products you could add?
- What products are just sitting on the shelves?
These critical questions will help you use your data to the best of your ability and make the most of category management. By making catman a habit, you’ll have the best opportunity to not only keep your customers happy, but also to ensure your inventory is building your revenue, not hurting it. There are a lot of things to consider when evaluating the products in your store, but making data and category management a priority could mean the difference between long term success and failure.