Product report and its role in business

The role of product report and analytics in business

Behind every successful business there is quality analytics.
Sales analytics is the collection and processing of management data on sales to improve trade performance. Entrepreneurs summarize total sales, compare data from different periods, analyze it and draw conclusions:

• which goods sell faster,
• which items are most frequently returned,
• what kind of products bring more income to the business,
• how effective and profitable a promotion, loyalty program or advertising is,
• whether the price of the product is relevant.

This information is used by businessmen for forming orders, choosing suppliers for cooperation, for correct goods placement on the shelves, implementation of promo actions, advertising etc.

How to collect and analyze data?

Data for sales analysis is collected by Torgsoft software.
Torgsoft records all information about sales and generates different types of reports. The basic report for sales analysis is the Product report. It shows the company's progress, helps to predict the profit, identify low-quality goods, and to implement changes for increasing sales. It is very easy to create a product report in Torgsoft. The user just selects the desired type of report and the program creates a report by itself.

What is a Product report?

A product report is a summary of sales, returns, and write-offs for any period. It shows what product was sold for what price, when it was sold, in what quantity, and for what amount. This is how the Product report looks like without additional groupings:

In Torgsoft, goods in the report can be grouped by various criteria. So, you can determine the seasonality of goods, quality, and track what affects the increase or decline in store profits.

How to generate a Product sales report in Torgsoft?

To view a Product sales report for a period, go to menu Report → Product sales report for a period → specify the reporting period and time of sales. Select the type of trade: retail, wholesale or combined, and the format of the report.

A general report will be generated for the selected type of trade for the current accounting center.

If you want to generate a report for all accounting centers, not only for the current one, deselect the «Only by [accounting center name]» option.

In Torgsoft in the Role setup, you can set restrictions and hide the «Only by [name of accounting center]» field from the seller.
If you keep accounting for several enterprises at the same time in Torgsoft, you can make a separate report for each of those. To do this, select the required enterprise in the «Enterprise» field.

How to use the Product sales report for increasing sales?

The Product sales report shows the overall picture of sales.
If not grouped, the goods in the Commodity Report are sorted by name.

To analyze the data more conveniently, group them and the program will combine the goods by the same name and the «Quantity» column will display the sold quantity of the same goods:

Analyzing the Product sales report you can see:

• Which products are more popular and provide more revenue. In this way, it is possible to determine the locomotive products and to ensure their constant availability in the store.
• At what time periods there are the biggest number of sales. At these hours, it's better to add more salespeople in the hall or open more cash desks.
• When and what goods are selling best. For example, if from 12:00 to 15:00 most people buy Bakery products and yogurts, it is reasonable to place them in maximum availability and proximity to cash registers, so that customers do not have to wander around the store during their lunch break in search of these products.
• Relevance of the product price. In the Commodity sales report, the «Price» and «Sale» columns show whether the product was sold at the same price as in the price list and which product was most often discounted. From this data you can conclude whether the price is relevant and whether the product is in demand.

Why is it useful to add a photo of the product to your report?

First, the photo allows you to find the required item in the report quickly without reading the name. Secondly, it allows you to compare whether the product in the box really matches the photo and vice versa.
Also, the photo shows how the design of the product affects its demand and which models are better sold.
For example, if the report shows that dark-colored shoes sell better, then we add more dark-colored models to the next purchase.

In Torgsoft, a photo of a product can be added to the Product report with the «Product list» mark. To add a photo to the report, check the «Include product photos in report generation» field.
Please note. To display photos in the report, you must first configure the report printing template.

Product report with a breakdown by type

Usually, the store assortment is not limited just to one product, but consists of different types: belts, pants, sandals, etc. In the report, you can sort the goods by type using the corresponding action «Split by product type».

The product report by type of product makes it easy to analyze:

• How successful the store's assortment is: based on the number of units sold, you can assess which types of goods are in demand and adjust the store's assortment accordingly.
• Product seasonality: by reviewing reports for different months of the previous year, you can track when the demand for winter products fell and add spring and summer assortments in time.
• How the promotion or advertisement affected revenue: compare the product report before and during the promotion or advertisement. If more goods were sold during the promotion and the sale was profitable, then you can repeat this promotion in the future or extend it to another product.

If there are a lot of products, it is more convenient to group them, and the program will combine the sold identical products into a single column. The report will become more compact.

Report on departments and product niches for the store

Choosing a niche for your store is an important thing. What will sell better depends on many factors such as the location of the store, proximity to other businesses and institutions, as well as the specific interests of the residents of the region. It can be difficult for entrepreneurs to find a best-selling product right away. A product report by department will help you determine which niche is more profitable for this store.
Check the «Split by department» field and the Torgsoft program will group the goods in the report by departments: shoes, accessories, toys, dishes, medicines, etc. By comparing which department has the best sales, you can see which products are more popular at a given point of sale. As a result, you can choose the right niche, forming an assortment in the store that will ensure good income and business development.

Also, the report by departments is convenient for keeping inventory records when a store combines very different departments, like from toys to pharmaceuticals. For example, instead of making a separate product report in a pharmacy, you can generate a product report by department.

Split by receipts in the report: which products customers most often buy together

This report is used to generate a list of related products and the logic of the location of goods in the store.
A customer's sales receipt is a source of information about their purchasing behavior. The receipts help to track what people most often buy together and to arrange products so that customers intuitively move around the store from one product to another. It also helps to place related products nearby.
So, by analyzing customer receipts, you can successfully

• make promotional offers such as «Cheaper together», «When you buy one product, you get another as a gift», etc,
• offer related products to extend the check in an offline store and to suggest products to the shopping cart of the online store with the selected products,
• place related products next to each other on store shelves and in ad units of marketing emails.

To generate a Product report with a split by receipts, check the «Split by receipts» field.

Report on product returns

According to statistics, each store records from 5% of customer returns, sometimes this number reaches 30%.
The most common reason given by customers for returning an item is the quality of the product. But is it always so?
The returned products report allows you to:

• track mistakes made by sellers, merchandisers, and other employees and correct them,
• identify low-quality goods, return them to the supplier, and exclude them from the list of the next delivery,
• notice an overpriced product and change its price.

It's important to check carefully the goods that customers return, especially if there are a lot of returns. If there is nothing wrong with the goods, and they are returned, the reasons may vary from price dumping by competitors to seller errors.

For example, in a home appliance store, customers began returning washing machine hoses one after another, citing the reason as poor quality. At the same time, this product had been selling well before. The manager reviewed the Returns Report and noticed that these hoses were labeled as Low Pressure, meaning that they were ordinary rubber hoses for cold water, but on the shelf they were labeled as High Pressure hoses. So the product was good quality if used as it was intended. The entire batch of hoses has already been returned to the manufacturer. They had to be reordered at a higher price. So, due to the merchandiser's mistake, the store lost money on the difference in price, shipping costs, lost money on the returned goods, and worst of all, suffered reputational losses.

Sometimes there are even funny cases. For example, an electronics store was selling wireless computer mice. The store owner was surprised to see that the Returns Report often listed computer mice from different brands. Upon inspection, he found out that the product was sold without individual packaging and sellers pasted a barcode on the bottom of the product, covering the mouse's laser. Some buyers came home and connected the mouse without removing the barcode. Of course, it didn't work, and they returned it to the store. This situation was quickly fixed by changing the location of the barcodes.

So, the product returns report helps not only to identify low-quality goods, but also to notice and fix mistakes, and increase sales efficiency.

Errors in analyzing the Product sales report

Incorrect choice of report periodicity

For example, you have purchased shoes of all sizes of the same type. The report for the month shows that all the shoes were sold out. It looks like the purchase was successful, and you just need to repeat it. However, if you look at the weekly report, you will notice that all the 37-38 size shoes were sold in the first week, and the rest of the sizes were sold until the last day of the month. So, for three weeks, sellers were selling shoes without sizes 37-38, because the demand for them is about 4 times higher. Revenue will be higher if, based on the report's results, you order 4 times more shoes of sizes 37-38 in your next purchase.
Tip: generate Product sales reports for different periods of time, from daily to annual, to see a detailed picture of the business situation and make the right management decisions to increase store profits.

Is the promotion profitable

Sometimes there is such a situation. The store held a promotion and all the promotional products sold well, so the store extended the discount period. At the end of the promotion, the sales of this product dropped sharply. The reason is that customers get used to discounts and start taking them for granted. Instead, when the promotional offer is over, they perceive the regular price as overpriced.
Tips:

1. Change different types of promotions between different products and choose the discount percentage carefully to make the promotion profitable.
2. Analyze the promotion by comparing the earnings on a given product in the Product sales reports for at least 3 equal time periods: pre-promotion and the average of the promotional and post-promotion periods.

Summarizing

A product report helps a business owner to make reasonable forecasts about future sales patterns, to plan budgets and resource allocation, adjust prices in real time, and generally make management decisions for business prosperity.