In retail pharmacy operations, we can all be short of both time and resources so it’s important to make sure that you are getting the best use out of your time and that the reports that you are using will be accurate and actionable. One of your main KPIs in retail is stock control. If you don’t have your stock under control, you risk having your cash tied up in the wrong stock and missing out on sales because you haven’t invested in your best sellers!
How can you control your stock? Simply by having the data on your stock readily available to you and by making sure that you understand what your data is telling you. Let’s take a more focused look at two of the main reports that can help you with this.
The Pareto Report – 80/20 Report
The Pareto principle states that roughly 80% of outcomes come from 20% of causes. This is also known as the 80/20 rule. What does this mean for you in retail, and what does it tell you? The Pareto Report can help to identify key opportunities and key issues. What are your bestselling lines, and how much are they contributing to the business? Is there an opportunity to expand on these? Conversely when you look at the flip side of the report, how many lines are sitting on the bottom 20 of the report, and how much of your vital resources are tied up in these lines? How much of your cash, shelf space and of course your time have these lines taken?
If you look at the two extremes of the analysis report below, it illustrates the point perfectly, the top 10 lines are taking 41% of your sales value! However, the bottom 20 are contributing less than 1% of your sales value. If you break this report down and look at it by department it will quickly allow you to focus on the best sellers and deal with the slowest sellers. This will all help with range rationalisation and stock control.
Product Opportunities Report
Having reviewed your top sellers and your slow sellers you will have a good idea of what is working for you. However, if you have bought products in smaller quantities or for just a select few stores it can be harder to judge whether these are working for you or not! This is where the Product Opportunities Report comes into play. This report looks at products that are only being sold in selected stores and uses the rate of sale to highlight fast selling products, so the report will look at how many units of a product sold over a set period of time. What this report is ultimately going to give you is a list of products that aren’t in all of your stores, but are selling well in the stores that they are in. Again, this putting the focus on products that are selling well and allowing you to expand the range out to other stores. An example of this might be say, a beauty product that the sales rep told you would be a winner because it was going to get television coverage. You tried it in a few shops, and it sold quickly, but you didn’t notice and therefore missed the opportunity to roll it out to more shops.
If you have any questions around the reports mentioned above or about our other services, please contact your customer success manager or email firstname.lastname@example.org to find out more.
Sinead Comerford is the Customer Success Executive at RWA Pharmacy, she has worked in retail for most of her career and has spent the last 16 years working in a department store Head Office. During this time, she worked as a Buyer, a merchandise planner, and various other roles in between. Sinead previously did another blog on the 4 useful reports for maintaining a successful retail business, click here to read more.