 Retail KPIs

Retail – Sales Metrics

Sales are the quintessence of all retail businesses. The business cannot exist without selling its products and services. Therefore, this is a metric that must be measured and improved.

• Increase sales figures per square foot – Product display in a land-based store plays a significant role in influencing a customer’s purchasing decisions. Tracking the number of sales per square foot shows whether your product presentation is positively influencing customer purchasing decisions.
• Improve sales numbers per employee – The sales per employee metric will help you measure performance, investment, and revenue generated per employee. This measurement will assist with decision making with respect to compensation, promotions, hiring, and training needs.

Retail – Customer Metrics

Customer metrics are statistics that are used to measure the value between your business and your customers, and vice versa. They include metrics, such as customer satisfaction, retention, and loyalty, that are known to correspond with revenue growth and ROI.

• Improve foot traffic – The foot traffic measurement measures how many people walk into your store. This helps determine whether your store’s location, products, and ad campaigns are successful.
• Increase customer retention numbers – Returning customers are the foundation of any retailer, whether brick-and-mortar or online. The greatest cost to the business is converting visitors into returning customers. It is vital to track customer retention metrics; otherwise, you won’t know whether your customer retention strategies are working.

Retail – Inventory Metrics

Retail inventory metrics are designed to track inventory control data. These metrics’ main purpose is to manage stock levels, identify and forecast trends, and gain insights into what stock sells and how quickly it sells. These outcomes will help you make improved inventory control decisions.

• Improve inventory turnover metrics – This KPI measures the number of times inventory has been sold and replaced within a given timeframe. Low turnover indicates that stock levels are too high or sales figures are too low.
• Increase Gross Margin Return on Investment – The GMROI metric determines the stock or inventory sales profitability figures after deducting the cost of the inventory from the total sales derived over a fixed period of time. This number helps determine whether your business is profitable or not.

Retail – Growth Metrics

The retail growth rate is the percentage with which a company’s sales figures have grown over a specific time frame like a month, year, 3 months, or 6 months. This number is used to measure the company’s overall performance.

• Improve both online and brick-and-mortar sales figures – Most companies have both an online and brick-and-mortar presence. Therefore, it is vital to increase the sales figures for both the online and traditional stores.
• Increase online to real life traffic conversion metrics – The conversion of online visitors into repeat customers is one of the most challenging marketing aspects for any company. Ergo, this metric measures the number of visitors to your company website versus the number of people that convert into customers.

Retail – Transaction Metrics

Transaction metrics are some of the most important metrics that a commercial company can measure. They answer the question of how many products did the company sell versus the number of returns, how much revenue did the company generate, and what the profit margins were during a specific time frame.

• Increase Gross and Net Profit margins – Gross profit is the sales minus the cost of sales that your business brings in over a specified time. Net profit is the profit after deducting all of the company’s other expenses. These calculations provide insight into your company’s expenses and earnings.
• Increase average transaction value – This metric tells you how much consumers spend on average. A high value shows that customers are buying more products or higher-value products, and vice versa. This number provides insight into how your customers are interacting with your business.

Retail Management Role Objectives

Retail managers play a vital role in the day-to-day management of the company’s operations. Their primary aim is to ensure that the retail sales transaction process flows smoothly from start to finish.

• Increase gross margin levels – Gross Profit is the total sales value minus the cost of sales. This metric is vital to measure as the higher the gross profit numbers, the greater the company’s chance of increasing its bottom line.
• Improve retail sell-through rate – The retail sell-through rate is the difference between the total inventory held by the company at the beginning of a period like a month versus the number of products sold during the same period. The greater the sell-through rate metric, the higher the sales, and the greater the profitability ratios.