Sunday, 20 December 2015

The eighty twenty rule

The eighty twenty rule

A point of consideration that should never be ignored is the eighty twenty rule, also known as the Pareto principle where it is acknowledged that eighty percent of the result is delivered by twenty percent of the effort or participants.
In the context of stores it is probable that twenty percent of the stores deliver eighty percent of the sales and deserve the proportionate dedication of energy and focus, as does the thick middle sizes such as medium and large and therefore should always be in stock. Core base colours such as white, black, naturals and greys also contribute largely to the sales and should always be evident in volume. It is clear that certain styling features will likewise guarantee the bulk of sales and should be finalised first and certain peak trading periods such as holidays or special events will contribute largely to the total seasonal sales and must be managed very carefully in terms of production planning and delivery scheduling.

It should be qualified that it is not necessarily exactly a ratio of eighty versus twenty as in certain cases it could be a ninety to ten or seventy to thirty relationship but nevertheless the principle still holds true.

1 comment: