Lost sales: counting the units you never had

RESEARCH
Lost sales: counting the units you never had
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A style that has sold out reports nothing. There are no sales in the weeks it was empty, so the weekly report reads those weeks as quiet. The demand did not go quiet. It went somewhere else.

Why the report cannot see it

Sales are what the till recorded. When a size is out, the till records nothing for it, and the report averages that nothing into the style's rate of sale. A style that stocked out in week six looks slower than it was, and the next buy is sized against the slower number.

How we estimate it

We start from the weeks the style was properly in stock and take its rate of sale there. For the weeks it was not, we carry that rate forward, adjusted for how much of the range was available. The result is an estimate of what the style would have sold, shown beside what it did sell.

What it is for

The estimate is not a promise and it is labelled as one. Its job is to change the question a buyer asks of a sold-out style. Not did it sell, but how much more would it have sold, and what did the empty weeks cost.

Turn merchandising decisions into workflows.

See what is happening in the season, decide what to do next, and make the decision repeatable.