Treat success in RETAIL like you are running a marathon. It is challenging but doable.
Look at this blog like a race. Throughout the race, there are different checkpoints. Each checkpoint is an important metric that adds to the success of your store. The finish line is the indicator that shows how well you have been doing overall. These key performance indicators (KPIs) help your retail business grow.
KPIs are critical to the success of any retail business. They will determine whether certain employees are performing effectively and can identify areas for improvement. This process is in place to ensure your store can operate smoothly.
At StoreForce, we like to prioritize the following indicators the most!
STARTING LINE: TRAFFIC
Without foot traffic, you won’t be able to sell any product to interested customers. Keeping count of your store traffic enables you to know whether your store is in a good location, and highlights levels of opportunity. Traffic also serves as the baseline metric for many other KPIs.
THE ROUNDABOUT: CONVERSION RATE
Noticing how well you are doing on the shop floor proves the effectiveness of your staff in getting the first item in the basket. Knowing this data will allow you to see if you are optimizing your time and staff effectively. If traffic measures your opportunity, conversion measures how much of that opportunity you are realizing.
THE STRAIGHT AWAY: UNITS PER TRANSACTION (UPT)
Focus and see what your customers are buying. How likely are they to wardrobe? How attractive is your current BOGO promotion or attachment items?
This information benefits your promotional and selling tactics. If UPT is low, ask yourself: are staff spending enough time with each customer? Are they explaining our promotions and trying to sell add-ons?
FINAL STRETCH: AVERAGE TRANSACTION VALUE (ATV)
The trend in the average value of transactions provides insight into the actions of your Associates. The behaviors that drive ATV are the opposite of those that drive Conversion. If your ATV is suffering, your Associates may not be presenting options to customers or wardrobing to build the basket size.
FINISH LINE: SALES
At the end of the day, sales are what matters. However, sales are the ‘end product’ of the other KPIs. Traffic X Conversion X ATV = Sales. The levers that the stores have to pull during the race are ATV and Conversion, with UPT being a key aspect of ATV. How well each metric does will determine the total amount of sales done in a day. Prioritize the behaviors that drive each KPI accordingly to maximize your sale potential.
Now imagine, while running a race, there is hardly any time to look at the checkpoints and metrics. As we said earlier, run retail like a marathon. Instead of analyzing ‘What happened’ post-marathon, let us analyze ‘What is happening’ in real-time. With all the information about retail checkpoints available at your fingertips, you can instantly hop onto a better path for overall success.
StoreForce KPI Performance Management can help ensure your business always performs to its peak potential. Optimize opportunities with features such as a real-time KPI dashboard, detailed performance statistics, and a robust target management system. Grow your retail business with actionable insights that are powered by machine learning with the StoreForce KPI Performance Management solution. Click here for more information.
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