One of the best tools for analyzing a department’s success is the use of available data. Produce executives might be hesitant to dive into data and perform proper analysis if it is new to them. But in order to lead the best possible operation, they must overcome these reservations and get access to all possible data.
A request for data to upper management might be met with this response: “What does produce need data for? It’s a simple buy-and-sell operation.”
Because many upper managers have a background in grocery and other nonperishable departments, this type of answer is typical. It shows the limitations of management’s experience with perishable (especially produce) operations … and proves the adage, “They just don’t get it.”
A savvy produce executive uses data to examine every aspect of the operation and measure the effectiveness of the enterprise’s various strategies and promotions. With a wide variety of data available through in-store systems information, it is easy to get a focused look at any part of the operation. The insights gained can help guide the creation and implementation of those strategies, promotions and schematics within the department.
The fact is, there is far more data than there is time to analyze it, so a targeted approach that focuses on the two biggest areas in any produce operation — sales and labor — will yield the biggest benefit.
All of us of have used sales data to determine whether we are hitting our targets and generating the type of revenue needed to meet our goals. This data also can indicate other specifics that are vital to a well-run department:
- Analyzing sales by day, by hour and by time of day will yield excellent information on how to have the department looking its best at all times, and how your promotional activity is performing;
- Analyzing the sales by item informs which items perform best when promoted and what places within the promotion or advertising yield the best results. By looking at these numbers closely, you can tell which items go together best in a promotion or advertisement, which ones complement each other and which ones perform best on their own;
- A sales analysis also can determine the best possible locations for each item or family of items. How well these items perform on end caps or in a family set can then lead to the most powerful schematic;
- And pivotal data also can be gleaned from which families generate the most sales, while on promotion and for regular business.
Data also can provide excellent insight into various aspects of labor:
- It can break down how effective each labor hour is (hourly sales per hour data) and be a guide for allocating labor to best generate sales and best utilize additional labor;
- It also can indicate what times of day, which items and what locations should be utilized and assigned additional labor to generate optimum sales;
- It can tell you which stores are doing the best job of allocating labor and are the most efficient in managing their labor costs while driving sales;
- It can offer insights into what labor practices are most effective in generating sales and where labor is being wasted on tasks that are not essential to the maintenance of the department and its sales;
- And it can determine which types of promotional activity or advertising requires the most labor and which are the most efficient uses of labor.
All this analysis can help formulate an effective and dynamic strategy for sales using data as your roadmap.These areas are just some that use data to provide an accurate picture of what is happening within your retail operation and each store. Data also can be used to evaluate your buying and distribution operation to ensure staff is performing at peak levels.
In other words, data can provide you with vital information about every aspect of your operation and assist in placing the proper focus on the strategic elements that will yield the most benefit.
Such analysis will keep your operation on track and take it to the next level of operational success and sales generation.
Don Harris is a 41-year veteran of the produce industry, with most of that time spent in retail. He worked in every aspect of the industry, from “field-to-fork” in both the conventional and organic arenas. Harris is presently consulting. Comments can be directed to [email protected]producebusiness.com.