The world around us has changed dramatically in recent months, and the retail sector in particular has felt the full force of this impact. We’ve seen online adoption accelerate and, off the back of this, more brands begin to turn and face the incredible potential of their data when it comes to optimizing their process and powering smarter decisions.
As we look ahead to the Black Friday/Cyber Monday weekend, this year will be interesting for a number of reasons. We’re predicting higher costs, bigger budgets and more at stake than ever before as retailers look to end the year on a high. In terms of a merchandising strategy, it’s either going to be all about driving footfall and sales, or focusing on clearing some of that terminal stock gathering dust since lockdown.
Hopefully, you’re well on top of this year’s Black Friday plans, and you’re ready to hit the ground running on 27 November. If not, we’ve compiled a handy list of some of the key metrics that you need to be focusing on across your merchandising and planning not just over the weekend, but all year around.
Merchandisers, presenting the metrics that matter for your Black Friday markdown strategy…
Fundamentals: Day-to-day metrics
- Rate of sale
- Weeks of cover
- Gross profit variance
Key indicators: Mid-level metrics
- EBIT contribution by line
- GPV vs GP%
- Markdown cycle
- Net margin/profit
- Average Transaction Value (ATV)
- Range planning/space planning
- Pounds per square metre/foot
Strategic: High-level management metrics
- Time saving
- Working capital employed (ROCE/GMROI)
- Regional web sales vs store locations
- Promotions to ease working capital
Win in these areas, and you win the Black Friday battle
Hopefully you’re already tracking the majority of these metrics, and exploring different avenues and approaches to help you achieve success across the board. If not, you need to be looking at how you can win in these areas to make your Black Friday markdown strategy as effective as possible.
At Peak, we’re working with a wide range of retailers to help them shape their strategies for the coming months. Since the pandemic, we’ve seen an increasing number of businesses begin to better understand the importance of their data in driving a competitive advantage. When this data is leveraged by artificial intelligence (AI), it drives smarter decision-making and optimized processes across the business, helping you to positively impact all of the above metrics in your merchandising efforts as part of your Black Friday markdown strategy.