![]() ![]() Inventory tracking can also help give insight into what is selling well and what isn’t. This is a great metric to keep an eye on over time to help understand which inventory items are affected most by seasonality. If you’re going through stock too quickly, then you may not be capitalizing on market demand as efficiently as possible. If you’re sitting on stock for too long, you’re likely losing money. Retailers uncover these insights by sales by digging in and getting curious about square foot metrics.įormula: Total cost of inventory sold / Average inventory cost Tracking inventory turnover will help you figure out how fast inventory moves. And retailers often place smaller consumable items by the register to encourage last-minute purchases. In practice, research in this area has found that products at eye level are more popular than products higher or lower on shelves. When you see how the store layout is performing, then you can improve it and improve sales results. If one section is performing better than another, it may be due to the types of products or their arrangement. You can visualize these insights with heat maps of your locations and dig into the data to determine why some merchandise performs better than others. Sales per square foot measures how effectively you’re using the area you have, and sales per square inch is a good indicator of your store’s productivity while offering insights into store and merchandise layouts. Below are some of the most common retail KPIs to measure success.įormula: Total net sales / Total square foot Sales per square foot is a compelling metric if you have a physical retail space. In the end, those will translate to more sales and better business growth. Improved processes can mean becoming efficient in reaching more customers, improving employee morale, and cost-effectively expanding or shrinking your inventory. However, growth encompasses more than just the number of sales, it also involves improving your processes. If you’re selling more, then you’re growing. ![]() The most common indicator of growth in retail is the sales volume. Your business may use all or just a combination of the following metrics: KPIs should always ladder up to strategies that meet a business objective. The next step is to create strategies to reach those objectives, and track the results of those strategies (metrics). The first step in creating retail KPIs is to define your business objectives, which can include the growth of your teams, locations, online revenue, and more. ![]() Retail KPIs, goals, and measures of success In this guide, we have compiled several of the most useful KPIs for tracking growth and performance in a retail business. As always, with metrics and business, if we can measure it, we can improve it - and retailers can improve their performance in a variety of ways. Retailers today have more access to metrics than those in the past. Reference Materials Toggle sub-navigation.Teams and Organizations Toggle sub-navigation.Plans and Pricing Toggle sub-navigation. ![]()
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