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Key Drivers of Retail Sales Performance

Editorial Team
15/08/2016 9:29 PM

The Challenge

We approached a major fast moving consumer goods company (FMCG) operating in Zimbabwe with the intention to help them understand why some of their retail outlets performed above expectation while others performed below expectations. The aim was to identify controllable factors and non-controllable factors that influence the performance of each outlet. The identification of controllable factors would then lead to strategies around manipulating those factors such that each retail outlet’s performance is optimised. More specifically, we sought to answer the following questions:
1. Does the diversity of product lines in each outlet influence sales performance? Some outlets had one product line while others had over a thousand product lines.
2. Does location have an impact on the sales of each retail outlet?
3. Does the presence of certain employees (sales representatives, merchandisers, merchandising supervisors) have an impact on the sales of each retail outlet?
4. Does the psychometric profile of employees influence the performance of their respective retail outlets?
5. Does the brand name of each retail outlet attract more (or less) customers leading to differences in sales?
Answers to the questions above would lead to informed decisions when deploying merchandise, taking into consideration the effects of location, product diversity, presence of and profile of human capital as well as whether or not some brands of outlets should have more attention than others.

How we intervened

We worked together with the retailer’s Human Resources Department and gathered data to incorporate in our analysis. The initial stage of our analysis involved building a descriptive analytics model using regression techniques to identify the major drivers of the differences in sales performance of each outlet. The second stage involved interrogating further the factors identified by the descriptive analytics model as contributing more to the differences in sales performance. The third stage involved matching insights with appropriate recommendations aimed at improving the retailers’ overall performance.
Download the full case study below:

Editorial Team

This article was written by one of the consultants at IPC

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