Friday, September 21, 2012

Re-alignment

We're coming off our best sales quarter ever, so in the middle of the day, when it's slow, I return to my numbers and analysis. There are exciting projects in the works, but for now I go back to my nuts and bolts. With the Summer ending, It's like a big party is almost over and I'm looking around the room at the excesses that went with my attempt to entertain the crowd.

In the case of the store, we're in a buy-buy-buy mode with Summer new releases and high sales. With the focus on satisfying demand, metrics are put aside for a while. During that short respite before the holiday season, I can step back and see if all those game categories earned their privilege or if some are just bloated, the party goers having changed their tastes from beer to wine mid-stream.

I do this with turn rate analysis, which measures two things: sales and inventory value with a number in mind. Some turns are blindingly good and I just leave those alone. One brand of card sleeves has turns that approached 80. My eyes! That inventory on the wall sold 80 times in the last year. Moving on. Magic currently has more inventory value in pre-orders for the next set than inventory on the shelf.  Umm, maybe we'll do that one later, although it's such a moving target, it's almost not worth bothering. There's probably a week during the mid-point of a release where you might get usable numbers.

There are games where interest has dropped off, or that the interest was perceived (wrongly) as a green light to expand. We're looking at numbers in the 1-3 range, often the old regulars like classic games and jigsaw puzzles, but also high item count games like anything with miniatures. I also look at trends, such as Games Workshop moving away from strong retailer support to more of a focus on direct orders. No free passes for that. Then there are things that are just a matter of time. Nobody will buy a CCG on clearance; it's just a matter of time or else it's toast. Nobody will start a new role-playing game because of the price factor. I once saw shoppers at Target pick a board game based on their coupon values. That's the purest definition of a commodity product. Oh the humanity.

So the herd is culled, and because inventory is a zero sum game, that money can be used for other shiny new things, or if you already bought the new shiny, used to get that inventory budget back in line. We very rarely have sales to drive people to the store, as it's a bad habit, but culling inventory, the take it now and we'll never carry this again sale, is something we still do, with as much efficiently and speed as possible. I don't like to be reminded of my mistakes. Some stores make a point of never having this stuff in store, shifting it to another of their stores, selling it online, or bringing it out for special events. I admire that, but perhaps I'm just lazy.

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