What Should You Measure?
Analytics is one of the most important aspects of retail operations management. Without it, you have no idea how your business is doing or what you can change to improve your operations. One of the biggest challenges for any retail store chain is to figure out what should be measured. And if you don’t measure anything at all, then you can’t make the changes you need to make to make your retail business profitable.
Here are a few of the performance metrics you should concern yourself with no matter what kind of retail store operations you are running.
- Dollars Per Transaction – How many dollars is each customer spending on purchases? This can tell you a number of things about your retail stores. If you know how much money you are spending per customer on marketing, then you can determine if you are getting a positive ROI per customer.
- Units Per Transaction – How many items are you selling per customer? If you know this, you can implement an upselling or cross-selling initiative to increase the number of items being sold and the dollars per transaction.
- Sales Per Hour – Are you making enough sales to justify your payroll? When are your peak hours? You can plan your staffing around critical sales and traffic volume times.
- Wage Per Sales – Weigh your employee compensation against your sales to determine if you are earning enough back on the payroll investment.
These are just a few of the metric you should pay attention to. The bottom line is this: You’ve got to be profitable to stay in business. You should be measuring expenses and revenues in some fashion so that you can determine profitability.