Six KPIs to Track & Harness Your Retail Store Performance?
By Multidev Technologies · PUBLISHED August 18, 2020
A KPI, or Key Performance Indicators, are sets of relevant metrics used to measure performance. Retail stores use various KPIs to measure their floor sales and omnichannel activities. There are no fixed rules with respect to the volume or the type of KPIs every retail store must use. Retail stores need to pick the most relevant KPIs based on meaningful data which C-Suite level executives or decision-makers assess on a regular basis to track the company’s performance. Therefore, Retail KPI could vary from one season to another, from one point of sale to another in the value chain among many other strategic variables.
While some store owners and managers could value revenues based on Sales Per Square Foot namely for those who still depend on physical traffic, digital first retailers with more proclivity towards online shopping and eCommerce gateways might value different sets of metrics that are more in synch with digital business operations and standards including the size of followers, engagement, conversion rate, brand loyalty, time-spent on the landing pages or the number of items purchased at each visit.
The list of meaningful Retail KPI might include an extensive list of metrics or just few parameters like:
- Sales Per Employee. …
- Conversion Rate. …
- Foot Traffic. …
- Customer Retention. …
- Customer Satisfaction. …
- Inventory Turnover. …
- Gross Margin Return on Investment.
In fact, Retail KPIs and Metrics can be divided into two broad categories. The first includes store performance metrics whereas, the second category is geared towards employee performance. These two key performance indicators are made up of more specific measurable KPIs. Knowing how these two broad metric combinations work to determine the profits of your entire chain are key to maximizing profits and efficiency within your retail organization.
So, how do we measure KPI metrics in retail stores nowadays?
Measuring store performance is more than calculating dollars and sense. There are a variety of ways to crunch the numbers and evaluate store profitability. Here are a few ways to measure store performance in your retail chain:
1.Sales data – It’s important to understand how your retail stores are performing regarding sales data. That not only includes how many sales your making, but other metrics like average dollar amount per customer, average items sold per customer, sales per employee, and sales per square foot. Sales are directly related to profits.
2.Conversion rate – The conversion rate measures how good your stores are at converting browsers into buyer. Foot traffic is good, but if the number of people walking through your stores are high compared to the number buying, you’ll have a low conversion rate. You need to figure out how to turn that around.
3.Average transaction value – Are your customers buying a lot with each visit or mostly buying low-priced items?
4.Online versus brick-and-mortar – This is important. If you sell more online than in your stores, it could mean that’s where you should focus your efforts–especially if brick-and-mortar is not profitable for your operation.
5.Growth – You should measure growth year-over-year and month-over-month.
6.Stock turnover rate – How often do you turn your inventory over?
There are plenty of other store metrics you should look at, as well, but let’s talk about employee performance
Just like your point of sale location, your employees must perform as well. Here are three important metrics you should keep in mind when it comes to employee performance:
- Sales per employee – How many sales does each employee make per shift?
- Average dollars per hour – How much in dollar amount does each employee sell per hour?
- Average dollars per sale – How much in dollar amount does each employee sell per sale?
Considering that retail performance metrics may entail several sets and subsets of variables to reckon with, it’s important to keep an eye on multiple factors as often as possible to monitor your overall performance from different angles.
ChainDrive’s Store Budgeting Dashboard is well suited for this task as it allows you to view and monitor various retail metrics in user-friendly dashboards so you can make informed decisions that are in line with your growth strategy.
ChainDrive’s built-in Business Intelligence modules are smart enough to provide you with integrated reports and tools, offering immediate access to vital information and insights on the targeted areas of interest. As result, you can use leverage the smart tools and dashboards to make data-driven decisions which could lead to better impact on your operating costs and revenue streams.
Thanks to its extensive arsenal of pre-configured reports, predictive dashboards, pivot table queries and graphs, ChainDrive lets leverage your knowledge, BI reports and Data into powerful and actionable decision-making tools.
Last but not least, ChainDrive Store Budgeting software is customizable and flexible enough to let set the parameters as you please.
If you still have more questions or want to know more about how ChainDrive can help you harness your retail operations, please contact our retail management software experts or log on https://chaindrive.com/free-live-demo/ to book a live demo.