Numbers don’t lie, or do they? I’m a wordsmith, not a math whiz. Even given that, I know the basic numbers that are important in the business of furniture.
Customers are steadily in your store or stores; employees busy and the cash register offers the frequent cha-ching as sales tally. (At least, I’m hopeful you’re hearing the ringing at your sales desk.)
We all know the importance in measuring same-store sales figures to last year’s revenue. The measurement tracks whether you’re growing or just maintaining. Comparisons are great, but what other components should be tracked.
1. Sales per square foot
As most know, this data helps with planning inventory purchases. Dividing your total net sales by square feet of selling space—not including your warehouse or distribution center—gives you your store’s square foot of selling space. Sales per square foot is a great measure of return on investment. Are you buying the right product for your market? Lower than the industry average, your merchandise mix could be off and not keeping pace with your target consumer’s wants.
2. Sales by category
The furniture industry loves to talk about categories. Dining room, bedroom, upholstery, home theater, recliners, and the list goes on. Which categories are the workhorses on your sales floor? Do you know? Figure it out and it could be that the category you thought was the winner if floundering, at best. Maybe the upholstery selection needs to be winnowed and youth bedroom boosted.
Who knows? But, until you do the math, you could be missing out on a key merchandising element.
Divide your the category’s total net sales by your store’s total net sales. Analyze the numbers for each category and see if your floor is in line with the results.
3. Staff productivity
Folks get a bit antsy about this one, but let’s be honest. If your sales associates aren’t performing, you have a problem, and you need to fix it fast. Your business runs on sales—doh!—without them you are out of business. Most of your sales come from your floor associates. Be sure you have the most productive ones around.
Figure sales per employee by dividing net sales by the number of employees. Keep in mind that you’ll need to consider whether your sales asssociates are full-time or part-time employees.
4. Sales per transaction
Or sales per customer, this figure tells you your average ticket or transaction. Do the calculations and you may find that your sales team could do a bit better by selling consumers up. Decorative accessories and rugs, let’s say, add the spice needed to pull together the new sectional and swivel chairs Sally just ordered. AND, makes for a bigger ticket at the register.
Divide gross sales by the number of transactions. Figure out a way to encourage your sales team to upsell your customers and boost those tickets.
Those are a few of the very basic items you should track and measure. In today’s e-commerce and social media climate, you also need to take into account how your Web traffic and social media efforts are playing into your business.
Inside, we’ve shared expert opinions on math that matters for retailers. If you happen to be a math whiz, well, let’s hope the inside offers you a few tips and ideas that you can put to work in your business.
Think about it, after all; retail has amazingly long hours, little thanks, sometimes finicky consumers.
That’s a lot to take without a love for helping people create welcoming homes.
Several conversations with retail friends have all led back to the frustration that legal topics and issues bring into their businesses. Staying abreast of changes in regulations impacting business owners is more than a full-time affair—there are hour and wage regulations; safety regulations; truth in advertising regulations and the list goes on and on.
Hint at the possibilities of a lawsuit over copyright infringement from a competitor or supplier and some retailers may break out into a body-coating sweat. Heaven forbid a legal squabble with a consumer who happened to break her arm and injure her rotator cuff when she stumbled over a low-profile cocktail table while she was admiring great artwork on the wall. (True story, by the way, that cost a retailer a good chunk of change in lawyer and settlement fees.)
In today’s world of hurry-up electronics, smartphones, the Internet and social media, copyright regs get more and more murky and indepth. It’s hard to know what is a copyrighted content, images or designs when surfing through Pinterest, Facebook and Google+. When does someone cross the line from sharing and step into copying?
On another regulation front, the industry is having to reevaluate the use of flame-retardant chemicals in upholstery and bedding. I remember stepping into this industry nearly 20 years ago when the debate over flame retardants was raging as to should we or shouldn’t we use such chemicals in home furnishings to prevent fires.
Today’s research shows the chemicals could leach and result in ill effects to people. Back in 1994, there were folks in the industry who stood firmly against such treatments for the very reason of the unknown human impact of the chemicals. California—the state with some of the strictest regulations—is currently leaning toward changing its standards on chemical treatment for upholstery. Typically, as goes California, so does the rest of the Union.
It’s enough to make one’s head spin, and it’s not easy.
The legal aspects of running a retail business seem more complicated than our country’s tax code. Thankfully, there are lawyers in the world who understand the ins and outs of legal matters that mean the most to retailers.
Inside this month, we take a look at a few of the legal issues retailers face on a regular basis. By no means did we delve into every single law or nuance that you or your colleagues have to worry about. THAT would take some doing.
Read the issue, and take some notes. Voice your concerns with your legal counsel. Make him or her a true business partner that you consult on a regular basis instead of only in times of legal crisis. You’ll be glad you did.