The pressure is on. Only two minutes left in the last quarter of the championship basketball game, and your team is down by three points to take the win.
Decision time. Do you send in your weakest player, the one sitting mostly on the bench all season, or the player you can bet on, the one who always comes through, and makes that killer shot for the win?
No debate. You send in the one who performs, your best player.
Retailing is no different in a recession.
It’s your best-selling products–killer products–that will maximize your sales and drive stability and growth in your business.
This is especially important as retailers strategize to survive and thrive in a recession and beyond.
It’s time to “play” your best killer products, but do you really know what they are?
Why you need to uncover your killer products
You need to find your best-selling products because they perform well regardless of a crisis, such as an economic downturn. They act as a lifeline to profitability.
As consumers become more dollar-conscious and spend less, a gut reaction of retailers may be to cut inventory in broad strokes to save on spending too.
For example, you may notice 20% fewer sales in a quarter, and so cut 20% of inventory.
But it’s very possible you’ll cut your best-sellers too because within each product category, there is usually a high-performing product(s), and you need to keep those.
They will make your bottom line profitable and you’ll be ahead of the game because you will:
1. Have continual sales revenue
Increased sales are a best-case scenario in a recession, but continual sales are a must.
Generating income is critical for retailers to stay afloat and expand, therefore if you know what your best-selling products are, and always have them available you’ll have constant sales revenue.
For example, despite the 2008 recession, Keurig single-cup coffee was a killer product among coffee brands. While other brands like Starbucks had dropped in sales significantly. Keurig single-cup was growing in popularity in offices and homes. Green Mountain Coffee’s overall revenue increased 86 percent during that recession, according to Capital IQ.
This product was a gem among rocks. Any retailers selling coffee as one of their CPGs at the time would have benefitted from knowing this and increasing inventory to keep sales strong.
2. Protect profits
Retailing is all about making profits. When you make profits, you want to hang on to and maximize them.
Unsold or slow-selling products dig into those profits through
- lost sales
- warehouse storage, shelf space, and floor space
- forced markdowns
- transportation costs to move inventory to other stores to try and sell them
However, if you’re able to identify your best-selling products you can anticipate and guarantee profits by keeping your top sellers on hand and well-stocked.
3. Retain your customers
There is no room for customer disappointment in a recession. Customer satisfaction is critical.
Knowing what your customers want, and what your killer products are, are two sides of the same coin.
How many times have customers tried to buy their favourite products online or in-store and it’s almost always out of stock?
Customers think, “Doesn’t this retailer know I buy this regularly?” This statement times thousands of customers equal lost business, lost customers, and lost profits.
According to Retail Dive, 39% of consumers left a store without purchasing anything at all due to out-of-stock items.
It indicates that your customers won’t necessarily substitute their preferred product for another; especially if they can easily go to the competition who has what they want.
So, you need to keep your customers happy and coming back to you by showing them you know what their favourite products are and making those highly desired products readily available.
4. Stay relevant
Now, your top-selling products won’t always be the same throughout the year. Many killer products are not evergreen, they change with the seasons.
What is desirable in spring, like raincoats, will be far less appealing by summer.
And then there are products that spike in sales that are not obvious top-selling seasonal products.
For example, electrical may not initially appear as a Christmas-driven category, however, power bars certainly see a boost in demand during the holiday season.
If you are only able to look at categories, and not the individual SKUs, this would be a big miss.
Savvy retailers who can pick out the winners in advance of each season will stay relevant to consumers all year long.
5. Beat supply chain issues
Product delays, shortages of brands and models, along with rising costs are only a few of the challenges the supply chain is experiencing.
With a less-than-predictable supply chain, you want to make sure you bring the right inventory in. Inventory that is guaranteed to sell.
When you know in advance what your killer products are, you can be proactive; ordering in advance to have what sells. You’ll avoid out-of-stocks, scrambling to re-order, and leaving yourself to the mercy of supply chains.
So, now you know why finding your best-selling products is necessary, but how do you do that?
How to find your killer products to drive sales
If you are a small retailer with only a few locations and a limited number of SKUs, you can probably find your top sellers by scouring Excel.
However, if you are a big retailer and omnichannel retailer with many locations and thousands of SKUs, it becomes much more difficult, pretty much impossible to find killer products with demand forecasting models in spreadsheets.
This is because your best-selling products are different at every location, and will have different SKUs.
Every location has a different demographic and demand profile. That means that your killer product in Seattle might be a dud product in Texas.
How do you manage this level of complexity to get the intelligence you need?
Advanced technological tools are some of the best solutions to help you sort through all of your data to pinpoint with clarity and accuracy your best-sellers where and when you need them.
Let’s explore this a bit further.
Tools to find top performers
Finding out what your killer products are among a deep and elaborate inventory mix requires precision and the most effective tools available to parse through literally millions of data points for omnichannel and brick-and-mortar retailers.
No one has that kind of manpower, but with technology like AI-driven analytics, it’s possible.
Advanced analytics uses AI and machine learning to take you to new levels of data processing that provide deeper insights that go beyond just the category level. It processes with speed and accuracy–right down to the individual SKU level.
Because of AI-based analytics’ state-of-the-art ability, you’ll be able to:
- Identify your best-selling products
- Track their performance by season
- Order them in advance
- Keep your customers coming back to you
- Increase sales
You’ll be able to turn the intelligence you get from AI-based analytics to drive the sales you need and win with your top-selling products in a recession.
If you want to find your killer products to flourish during and beyond the recession, we can help you. Contact Our Team