Beauty Store (Actual Vs Target)

At the start of 2024, The beauty store, set ambitious targets to expand its reach, boost sales, and increase customer loyalty. As the year progressed, they carefully tracked their performance, comparing actual results against their goals.

Why's Actual VS Target Analysis Important?

Actual vs Target Analysis is essential for measuring performance, identifying gaps, and driving strategic decisions. It helps organizations:

1. Measure Performance: Compare actual results to goals.
2. Identify Gaps: Spot underperformance or overachievement.
3. Drive Decisions: Enable data-driven adjustments to strategies.
4. Boost Accountability: Motivate teams with clear benchmarks.
5. Improve Forecasting: Refine future targets based on trends.
6. Encourage Improvement: Optimize processes and address inefficiencies.
7. Ensure Transparency: Communicate progress to stakeholders effectively.

By the end of the 2024, they conducted a detailed Actual vs Target Analysis, revealing the following:

• Sales Achievement: 34.8%
• Profit Achievement: -5.5%
• Customer Growth: 33.7%
• Quantity Sold: 34.5%

The Story Behind the Numbers

Sales Achievement (34.8%)

The Beauty store saw a remarkable 34.8% increase in sales, driven by strategic initiatives such as:

• Launching premium skincare products.
• Running festive campaigns with influencer collaborations.
• Offering exclusive holiday bundles.

While the increase was impressive, the growth came at the expense of profitability due to high promotional spending

Profit Decline (-5.5%)

Aggressive discounting during Black Friday and holiday sales, coupled with increased marketing expenses, took a toll on profitability. The Beauty store realized they had over-discounted products, prioritizing short-term sales over long-term margins. This highlighted the need for a more balanced pricing strategy.

Customer Growth (33.7%)

The store's loyalty program and social media outreach proved effective, bringing in a significant number of new customers. However, while foot traffic and online visits increased, many customers purchased lower priced products, contributing to the gap in sales and profits.

Quantity Sold (34.5%)

The quantity of products sold was consistent with customer growth, indicating a solid conversion rate. However, the focus on smaller, discounted items diluted the overall revenue and profit potential.

This analysis fosters continuous improvement, accountability, and better resource allocation, making it a cornerstone of performance management.