I have a middle-school child; if you have one, you may know where this is going.
When she first started making slime, I thought, “Cool, this is a bit like an at-home science experiment that didn’t originate with me.” Then she made another, and another. Soon, my counters were covered with the home ingredients for making slime: food coloring, Borax, glitter, shaving cream, hand lotion, and, of course, empty bottles of Elmer’s Glue. I gave her a shoe box to hold her supplies, but she quickly outgrew that.
My daughter’s collection grew; she began selling it in school, selling it in her sister’s school. She watches videos. She makes videos. She has slime parties. She cried when the store ran out of glue. It is now banned from both the schools my daughters attend.
As you may have guessed, slime is big with the kids these days. Elmer’s Glue sales grew 9 percent in 13 weeks from December through February. Clearly the company was unprepared, and in many places, they were stocked out. True, viral fads pop up and go away quickly (ice bucket challenge, anyone?).
FP&A and slime: the connection
How does the great slime fad of 2016-2017 relate to FP&A? Here’s how: FP&A professionals are not the ones with our ears closest to customers, but we can ask our sales and marketing teams how FP&A should listen to customers. FP&A should ask what investments the organization has made to gather and analyze trend data.
Risk and scenario testing our forecasts help stretch our thinking: What happens if our next customer does not look at all like our historical customer? How would we react to a surge in demand due to an Instagram fad? Or a disruption in our supply chain due to a flood or dam breaking?
Companies need to have an effective radar to discover these fads, and they need nimble reactions to capitalize on them. It looks like Elmer’s Glue has, adding gallon-containers of clear glue to their lineup this fall. My daughter hopes the fad lasts a while—she sells clear slime at a 50 percent markup!
Bryan Lapidus, FP&A, is a contributing consultant and author to the Association for Financial Professionals. Reach him at [email protected].
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