The 2016 holiday season generated more than $80 billion in total online retail sales this year. This is almost a third of all retailers’ annual sales during the holiday season, making this the most important time of year for retailers.
If the holidays are so important, why shouldn’t the data be as well? Large volumes of sales during this period generates both lots of data and revenue. Before you close your books for 2017 and the ball drops for the new year, it is crucial to take a look at your annual data. Analyzing the data can help you understand what worked and what didn’t, as well as your future threats and opportunities. All of those insights are based on a relatively large volume of data that you’ve been gathering over the past year, making statistics more significant and the results more important than ever. Don’t dive into 2018 before looking into this first!
While data analysis is incredibly important, making sure the data is accurate and valid is crucial. You should make sure to have the proper systems and tools in place so you can collect data in a manageable and accurate way. Many software solutions, for example, can create data reports and analyses for you. With Logiwa, you can look at your comprehensive inventory and order fulfillment reports in order to understand what happened during a given time period so you can forecast your inventory more effectively and plan your workforce to accomplish order fulfillment.
Once you know your data is “clean,” you can use your data reports to discover trends within your past sales cycles. Some metrics that will give you a good understanding of what happened during holiday season is as below:
- Total Sales/Revenue
- Cost of Goods Sold
- Opex – Operational Expenses
- True Profitability
- Sales by location/channel/store
- Inventory turnover
- Sales velocity per product
- Forecasting performance
- Average order quantity/value
- Inaccurate shipments
- On-time shipments
- Warehouse utilization
- Staff performance
You should always do a year-over-year comparative analysis with your data before the year is over, because this will tell you the most about where your business is now compared to where it was last year. Even more importantly, your data can determine where your business is heading in the future, and help you know what to adjust for in 2018. The numbers tell you where to be cautious with your inventory, where you might have slowed down in the sales cycle, and what new problem areas may arise in your selling process. Understanding the numbers will help you achieve the best short-term and long-term results.
Analyzing your data is even more insightful when you take external factors into consideration.
Keeping track of what is happening in online retail industry at large will tell you how much your success or failure is due to industry trends or your performance itself.
The best analysis you can get to measure this difference is from your customers reviews and customer interactions with your company. Do you get dissatisfied reviews, or happy customers? Are you getting more returns than usual? Using your customer reviews as a metric is a great way to see how their experience with you measures up to other retailers.
Best Approach to Data
Overall, it is best to keep in mind that most successful entrepreneurs manage their businesses based on numbers. Instead of looking at metrics individually, having a holistic approach and considering all factors together can help you understand your business, the industry and your customers.