Kelpie 2nd Gear July 28, 2011 Share July 28, 2011 Hi all, Assuming you are running a retail chain, your sales curve actually behaved similarly with the customer spending trend. However, despite the increase in sales and customer spending, your customer count actually declining or stay very flat. Also assume that cost of living and inflation rate remain unchanged. Political situation and state of economy also remain stable. One uncertainty is population count and rate of residential build-up at your operating areas. Do you think this is good or bad for the business? Thank you very much for your comment. Regards, ↡ Advertisement Link to post Share on other sites More sharing options...
Sabbie Clutched July 28, 2011 Share July 28, 2011 Bad Link to post Share on other sites More sharing options...
Jman888 Moderator July 28, 2011 Share July 28, 2011 Assuming you are running a retail chain, your sales curve actually behaved similarly with the customer spending trend. However, despite the increase in sales and customer spending, your customer count actually declining or stay very flat. Also assume that cost of living and inflation rate remain unchanged. Political situation and state of economy also remain stable. One uncertainty is population count and rate of residential build-up at your operating areas. Tarffic count is quite important, either the population drop (to the mall) or you are not doing enough to draw traffic. Base on your scenario, you are milking the customer (up sell) which may not sustain in long run. Link to post Share on other sites More sharing options...
Kelpie 2nd Gear July 28, 2011 Author Share July 28, 2011 Tarffic count is quite important, either the population drop (to the mall) or you are not doing enough to draw traffic. Base on your scenario, you are milking the customer (up sell) which may not sustain in long run. There is no up-selling nor sell in advance option in this retail chain. straight forward transaction, Customers just come in, select the goods, pay for purchases and leave. Based on the assumption that population is declining, are we saying that the business environment is saturated here? Thank you. Regards, Link to post Share on other sites More sharing options...
Kelpie 2nd Gear July 28, 2011 Author Share July 28, 2011 Bad Do you favour a situation of increasing customer count but declining customers' spendings & Sales? Regards, Link to post Share on other sites More sharing options...
Maroon5 5th Gear July 28, 2011 Share July 28, 2011 generally bad but of cos, u could also save some variable costs like 1 lesser waitress etc . anyw i wil jus suggest a simple formula: No of transactions/customers (T) X Ticket Avg (TA) = Sales. your other factors affect more the P&L aspects, so if they all stay constant, you can safely expect similar margin. Link to post Share on other sites More sharing options...
Kelpie 2nd Gear July 28, 2011 Author Share July 28, 2011 generally bad but of cos, u could also save some variable costs like 1 lesser waitress etc . anyw i wil jus suggest a simple formula: No of transactions/customers (T) X Ticket Avg (TA) = Sales. your other factors affect more the P&L aspects, so if they all stay constant, you can safely expect similar margin. I got a different view else where. They said, it could mean the business is driving away price-sensitive customers and retaining customers who are willing to pay more for quality product. Hence, despite a flat customer count, the spending power increases and so is the sales. Regards, Link to post Share on other sites More sharing options...
Jman888 Moderator July 28, 2011 Share July 28, 2011 (edited) There is no up-selling nor sell in advance option in this retail chain. straight forward transaction, Customers just come in, select the goods, pay for purchases and leave. Based on the assumption that population is declining, are we saying that the business environment is saturated here? No up sell how come customer spending increase? Price increase or they buy more item? Yes, traffic is important. Unless you are selling a niche product (high margin) that regular always come back to you. Edited July 28, 2011 by Jman888 Link to post Share on other sites More sharing options...
Maroon5 5th Gear July 28, 2011 Share July 28, 2011 I got a different view else where. They said, it could mean the business is driving away price-sensitive customers and retaining customers who are willing to pay more for quality product. Hence, despite a flat customer count, the spending power increases and so is the sales. Regards, its possible but the info is too limited to make a good conclusion. some eg. promotion driven? any brand equity? seasonal factors? etc etc Link to post Share on other sites More sharing options...
Kelpie 2nd Gear July 28, 2011 Author Share July 28, 2011 its possible but the info is too limited to make a good conclusion. some eg. promotion driven? any brand equity? seasonal factors? etc etc There are increases in sales during festive seasons as in most trades. periodical promotion are conducted. The products are priced above competition for perceived value and quality products. So even with promotion, the price will more or less equal to the normal prices of the competitors. Survey shown customers wanted quality but don't mind to pay extra for quality product. Regards, Link to post Share on other sites More sharing options...
Majordan 2nd Gear July 28, 2011 Share July 28, 2011 "customer count actually declining or stay very flat" how can this ever be a good thing unless you increase your margin? Link to post Share on other sites More sharing options...
Kelpie 2nd Gear July 28, 2011 Author Share July 28, 2011 No up sell how come customer spending increase? Price increase or they buy more item? Yes, traffic is important. Unless you are selling a niche product (high margin) that regular always come back to you. Yes, customer spending more per bill hence driving up sales figure. Interesting observation is end customer count either stay flat or dip slightly. Not really high margin (around 22%) but the business is a vertically integrated setup, from the source, wholesales, manufacturing and down to selling to end consumers. Regards, Link to post Share on other sites More sharing options...
Kelpie 2nd Gear July 28, 2011 Author Share July 28, 2011 "customer count actually declining or stay very flat" how can this ever be a good thing unless you increase your margin? No increase in margin either. Sales increases at a faster rate than customer count. Regards, Link to post Share on other sites More sharing options...
Kelpie 2nd Gear July 28, 2011 Author Share July 28, 2011 Hi all, To add, the mentioned trend has been observed since later part of 2009 till current. Regards, Link to post Share on other sites More sharing options...
Maroon5 5th Gear July 28, 2011 Share July 28, 2011 There are increases in sales during festive seasons as in most trades. periodical promotion are conducted. The products are priced above competition for perceived value and quality products. So even with promotion, the price will more or less equal to the normal prices of the competitors. Survey shown customers wanted quality but don't mind to pay extra for quality product. Regards, act wat i was trying to get at is the quality of your "hardcore" demand, so u can work your base feasibility on those figures. like i say the info is too general. hard to discuss further. Link to post Share on other sites More sharing options...
Porker Turbocharged July 28, 2011 Share July 28, 2011 Is your retail business targeted at high end consumers or the mass market? High end retail businesses are not too concerned with big crowd (the sort you find in Jurong Point for example). Mass market retail businesses need a big population. Link to post Share on other sites More sharing options...
Atonchia Supersonic July 28, 2011 Share July 28, 2011 (edited) No increase in margin either. Sales increases at a faster rate than customer count. Regards, That means rate of consumption increase. So what cause the rate of increase? Recovery of economy or something else? ie 1: You sell condom, margin same, price same, consumption increase because vice activity increase? service provider buy 3 boxes instead of 1. more 'students' come to study, adolescent & adults with a more open culture? Education on protection so more people who engage in unprotected sex decided to buy, Cost of living more expensive so young couples decided to defer pregnancy etc. ie 2: you sell ipad instead of ipod, the margin can remain, increase in value per item would increase your total sales value. Edited July 28, 2011 by Atonchia Link to post Share on other sites More sharing options...
Kax2 Neutral Newbie July 28, 2011 Share July 28, 2011 (edited) You are in luxury product retailer ? Luxury product consumers are less price sensitive and largely unaffected by inflation or economic downturns so they may spend more (increased sales) but other price-sensitive customers may opted not to buy or for another cheaper substitue (lower customer count) See the number of Merc and BMW registered with insane COE prices Edited July 28, 2011 by Kax2 ↡ Advertisement Link to post Share on other sites More sharing options...
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