Mastering Seasonal vs. Continuity Products

When selling retail there are two types of product, either ‘Seasonal’, they have a limited shelf life, think Fashion, Christmas or Halloween specials or ‘Continuity’ product. Let’s discuss how you plan them, buy them and retail them. Thankfully, most of the product sold in the Haircare, Spa or Beauty sector can be classified as continuity, which usually will mean less markdown.

Seasonal Product

They are products or configurations that would be on sale for a limited number of weeks, for example Christmas gift sets, or became secondary outside peak season, think factor 50 sun blockers in the UK

In seasonal products timing is key, if you are too late launching part of clientele may have purchased elsewhere, and you will probably be left with too much stock. However, too early and you are just sitting in stock that will not move, may look out of place at first and tired later.

It is all about getting your planning right, work through your history to understand when to bring your product in, when to launch. Even if you have to place a single order, try to stagger deliveries, so you stagger your payments

Continuity products

They sell throughout the year, but at different speeds throughout the year. In this case, it is all about working out your base line, and the peaks and troughs on sales. Use last years sales as your base line to plot the sales per week of the different categories. Make sure you are 100% clear on the reasons behind each trough, and let’s think about them as growth opportunities.

Your objective is to have enough stock to cover all the sales in between orders, plus a bit of buffer in case the sales pick up, plus your display stock. How many days or weeks of stock you should carry hinges on how quick you and suppliers react to sales.

To decide how many days or weeks of sales you should carry as stock you could look at the following:

- How quickly will your suppliers deliver to you? Are they reliable? Will you be in their top priority list. How long will take for you to receive at no extra cost a regular delivery?

- Are products delivered in packs, so if you need Item A that is delivered in packs of 6, you will get 6,12, 18?

- Is there a minimum order value that you need to hit to avoid incurring in higher delivery cost ?

- How often will you be ordering, once a month? This does not mean that you have to take the stock all at once.

Once you establish how quickly you can turn things around, on average then you just need to plot your sales to get your target stock. For the example below we are looking at needing 3 weeks of stock, for a product that comes packs of 5, and display quantity of 4

Scenario - American Crew

Let's work through an example, American Crew Tea Tree Shampoo, using a line card. This is a very easy to set up tool, basic, but ideal to manage your big cash cows, those lines that will make or break your retail. You don't want to be planning every line with this level of detail, as it would became a thankless endless chore, but for some lines is worth it.

Instead of having a fix stock target, you flex your stock based on what you are going to need to meet your clients demand. As you probably know by now, the trick is on analysing your sales, but look at how much money could you save by having the right amount of product at the right time. Your target in this product doubles from Mid February to May, as sales double. Is this a made-up scenario? Yes. Is it feasible? More than that.