Essential to your business’ success
By Clinton Fraser
The Surf Boardsports Industry Association regularly hosts round table events. Such roundtables are valuable for the industry as it creates an opportunity for Brands, Agents and Retailers to join forces and share knowledge to improve the industry for all.
Egos and loyalties are parked at the door and key issues are deconstructed, discussed and new processes and opportunities are explored
In May the industry met with the objective to develop a shared understanding of a core set of Retail Key Performance Indicators (KPIs) that could be understood and driven for the improvement for all industry stakeholders – Brands, Agents and Retailers.
Using such KPIs as a focus area by everyone would be expected to continue the change in ethos of “selling through” Retailers and not “selling too”.
Strong retail performance is a critical cog for our industry
For a Retailer it is important to have a strong, performing and growing business that provides:
- Return on investment
- Income stream (feeds the family and pays for a surf trip)
- An asset for sale in the future
From a Brand perspective:
- A strong Retailer allows for strong brand representation and growth for all
- Provides a sell through door way to deliver the brands products to the consumer
- It is in the Brands best interests to have successful, high performing Retail partners
“A Brand or Agent focus upon increasing last year’s order is limiting to the Industry. “
What if the Brand or Agents focus was improving the Retailer performance? Being able to work with a Retail partner to use its products to improve the profitability of the Retailer? Being able to measure the success of this strategy through a common set of core KPIs is hoped to change the conversations between Brands, Agents and Retailers
In break out sessions the Industry teams workshopped a range of KPIs and ranked them to define a core set
- Sales $ Year on Year and versus Budget (but drilled down into categories and brands)
- Gross Margin % (also drilled down into categories and brands)
- Sales per Square Metre (by category and brand)
- Stock Turnover (average # days inventory)
- Average Customer Spend
- Average Items per Sale
- Foot Traffic & Conversion Rate
- Wage to Sales Ratio ($ of sales generated for every 1$ of wage)
- Sell through Rate
Brands and Agents working with Retailers with a clear understanding how product selections can drive the successful performance improvement of Retailers is considered the way of the future. How can merchandising and product training be refined to improve those associated metrics?
A change in philosophy and a change in conversation around these core KPI metrics could have an amazing impact.
In moving towards this improved world it was recognised that all parties required some behavioural changes to find this common ground
Brands and Agents are required to
- Develop pre and post season accountability
- Upskilling and educating Agents re understanding core metrics and how to influence them
- Understanding best practice KPIs
- Using available data to generate KPIs for the Retailer
- Planning, communication and starting the conversation
Retailers would be expected to
- Invest in the Brand and Agent relationship and have trust
- Upskilling and educating to understanding core metrics and how to influence them
- Accurate systems to generate accurate KPI measurements
- Information sharing
- Understand brand directions and the link to customers
It is hoped that this is the beginning of a new phase of Brand and Retailer alignment and using a core set of metrics to drive conversations that ensure great products are efficiently “sold through” Retail partners.
The SBIA will continue to advocate and drive industry change but ultimately it is the responsibility of all of us.
Further technical information regarding our SBIA core metrics how to calculate them, how to interpret them and most importantly how to influence them will be documented in a toolkit and be made available on the SBIA website shortly.
Clint Fraser is a Director at Davidsons Accountants and Business Advisors and is based in Torquay with a client base including Brands, Agents and Retailers. Clint is a regular facilitator at SBIA roundtable events. (e. firstname.lastname@example.org)