Use a 4-5-4 Calendar to Maximize Retail Sales Analysis
So you’re reading that headline thinking, “I don’t even know what that is, but I’m intrigued about what it might be.” The 4-5-4 calendar is called such because it separates every month into either four weeks or five weeks. And the cadence of the months literally are 4 weeks in one month, five in the next and four in the next, then it starts over again.
This 4-5-4 calendar is the calendar that most retailers use to run their businesses. It drives the day on which each month starts and stops, and that governs everything from the development of sales plans to when the financial month ends.
In retail, weeks start on a Sunday and end on a Saturday since Saturdays are the biggest day of the week. That allows each week to end on the busiest day and the month to end on the busiest day as well, hopefully propelling stores over their sales goals because more revenue is coming in the door.
(You can download and view 4-5-4 calendars on the National Retail Federation website.)
Now the big question: Why do I need this, and why is it relevant to my business?
The answer: It allows you to compare the same time frames from one year to the next, gaining more accurate insights into your business.
Many retailers simply log sales for the month of January and compare it to January of the prior year. The issue is that you’re not comparing the same days of the week. In just that one year, the actual date could shift by two days. For instance, take the holiday time period. December of 2019 had five Saturdays in the month, while December 2020 only had four. As a result, sales in 2019 were probably higher than in 2020 because there were more busy shopping days in 2019. Likewise, comparing even a daily sales number during a month is tough because during one year the date is on a Saturday, and the next year it’s on a Sunday or Monday. So you’re comparing apples to oranges.
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A 4-5-4 calendar allows you to compare the same week to the same week, and the same day of the week to the same day of the week, eliminating the issue of traffic counts simply because one day is busier than another.
Using a 4-5-4 calendar will truly give you a sense that you’re comparing like numbers so you know that when you beat the prior year’s sales, that you truly did it.
How are you going to use a 4-5-4 calendar to increase your ability to accurately analyze your sales?
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