Are you tracking the right KPIs for your store?
There are endless metrics available to track your retail business. Use too many and you risk getting distracted. Use too few and see valuable insights slip through the net. The trick is to find the right balance for your business.
1. Wages to revenue: What level of sales do you generate against wage spend? And do you track individual salesperson’s transactions to identify who is doing well and who less so? These can help you decide if and when it’s time to look at improvements.
2. Number of transactions/customers: If you don’t know how many customers enter the premises against how many sales are made, how do you know if your team are successful at closing deals?
3. Average profit per site: Do you have multiple stores or franchises? Understanding what works and what doesn’t at your strongest sites is vital if you’re expanding.
4. Revenue per customer: You want to upsell and cross-sell, right? If this KPI is low, you might need to find ways to entice customers to buy extras. Easily accessible products and smaller ‘afterthought’ items near the till might tempt them.
5. Inventory to sales: Can you afford not to optimise your stock orders? A high ratio might mean a lot of unpopular items. A one-off sale could shift more while you use the data to reorder items that sell best.
Our KPI Library contains much more information on metrics.
Learn to calculate wages to revenue here.
Learn average profit per site here.
Learn average revenue per customer here.
Inventory to sales here.