In order to remain competitive in business, you’ve got to be able to understand your customer needs and wants – often months in advance of those needs or wants. Sounds complicated, but when you get right down to it, you already have the tools at your disposal to give you a good idea of what people are going to be looking for.
There are a number of ways to decide what products to stock in the future. However, the best way to do this is to look at what they are buying from you today, as well as what they’ve bought from you in the past. You’ll want to consider these five key dimensions when predicting your customers future needs and wants:
1. Average Price Per Sold Item
See what price levels are for your top selling products. This will give you an idea if limited, higher priced items, or mass quantity lower priced items would work better. Let’s face it – if your customers are used to buying the budget computer accessories for less than $40, bringing in $1200 laptops probably won’t make much sense.
2. Average Order Size
Keep in mind that the average amount spent per order doesn’t always equate to the average price per item. Your customers may come to your site for inexpensive items, but they may purchase several of each item, resulting in a big order.
If you increase the average order amount, you’re increasing their value to your business. Think about new products that meet or exceed your current average order size. Make sure this number is going up and not down.
3. Luxury or Necessity
Are your customers buying nice to have items such as electronics, or are they buying everyday items they need on a continual basis? Look past the current fad or trend and think about what part of their budgets they are spending with you. You’ll want to continue to stock products that are “cool”, cheap and are so easy to use that your customers simply have to have them. Provide products that are automatic buys and they will continue to buy from you rather than going elsewhere.
4. Technology Products
If you sell items that have a lot of technology built in, you’ll need to continually be on the look out for new models, or updated versions of what you currently carry. People always are looking for the latest and greatest. Be sure to keep enough of these type of products on hand and order the new models so that you stay ahead of the curve.
5. 80-20 Rule
Do you find that 80% of your orders are coming from 20% of your customers? If so, it’s likely that 80% of the products you sell are coming from 20% of the category areas. To make a bigger impact on your business, increase the 80% of sales and be ready to continue serving the customers of that 80% group.
