“There are three kinds of lies: lies, damned lies and statistics.”
This famous quote is attributed to Benjamin Disraeli by Mark Twain, although it is doubtful if Disraeli ever said or wrote this. But how should we view numbers and statistics in today’s fast changing retail world?
The cartoon above is a quirky take on how people (your customers!) view percentages. And it’s true! Percentages can be tricky things. After all, 25% off €1 is 25cent – not a great offer. But 25% off €200 is €50, sounds better?
How often have you used a percentage to justify a decision?
Sales grow by 200%! Sounds amazing! But if the base level is only €100 then sales growth is €100 to €300. Doesn’t sound so great now.
Which brings me back to statistics and how we view them. The latest CSO Retail Sales Index for February shows that total volume sales rose year on year by 11% for all goods and 7% excluding car sales. Good news you may think. Not so according to a press release from a well-known retail organisation issued on the same day which said that, “retail sales have been very soft in recent weeks.” So what should we believe?
The problem with statistics is that they take figures (very often) from many and various sources, put them into one big pot, mix them up, re-sort them and come out with an average. The results don’t always tell us very much and are open to lots of different interpretations, as demonstrated above.
So why does it matter and what should you, as a small business, think? Well, it does matter because it affects that wonderful thing called consumer sentiment. Yes, there are even statistics that measure that now! Consumer sentiment is the confidence that your customers have in going out to spend their hard earned money on your goods and services. When there are good news stories about sales and sentiment rises then it changes the way people perceive the world. If you like, it gives them the “feel good” factor to go out and spend.
And what should you think? The savvy retailer knows her own business inside out, has her own statistics at her fingertips, knows what the competition is doing, where the market is going and what her customers think. And those are all the statistics you need.