Catalog Merchandising: Five Steps for Easy Square Inch Analysis, part 1 of 2
The goal is to compare the sales per inch for each product both to the book average and to breakeven. Items that are above average should be allocated more space in the next catalog. Items that perform below average should get less space or be deleted entirely. A good rule of thumb is to expand the space and improve the presentation of the top one third of the products; eliminate the bottom third; and individually examine each of the products in the middle third – some will get more space and others less.
Ultimately, squinch analysis allows you to do three things:
1. Reduce all products in your catalog to a single common denominator, square inches of space occupied.
2. Equitably and precisely compare sales per product and the cost associated with the space each product occupies.
3. Rank your products by sales dollar per inch.
Comparing sales per square inch with the cost per square inch for every product gives you a measure of which products are yielding the best results for the money spent, and which aren’t pulling their weight. It tells you how strong or weak each product is relative to the other products in your catalog.
Squinch analysis can reveal surprising potential for improvement in products that have been selling adequately, but not impressively, in a small amount of space or in a mediocre location in the catalog. If sales per square inch for a poorly located product compares favorably with the figures for other best-selling products, featuring the newly discovered winner can increase its sales dramatically –- without spending more money.
Part 2 of this discussion will appear in the Dec. 19 edition of Catalog Success Idea Factory.
Bill Licata is president of LCH Direct Inc, a direct marketing agency specializing in catalogs and e-commerce. He can be reached at (505) 989-9451 or via email at firstname.lastname@example.org.