INDUSTRY KPI’s & THE KEY METRICS’

In the retail industry, the KPIs or the Key Performance Indicators are the most vital metrics for the sake of determining the performance of retailers & making useful comparisons with competitors. These KPIs help the retailers achieve their monthly, quarterly, half-yearly or annual targets. These are the most vital targets that are retail industry goals to bring improvements. The retail KPIs define the business objectives, which dynamically revolve around the growth of your teams, locations, online revenue, and more.

The next & most vital step is to create growth strategies to reach those objectives. Furthermore, track the results of those strategies (metrics). If you are a retailer, your business might use all or just a combination of the following metrics. These include sales per sq. foot, Gross margin ROI or Return on Investment, Avg. transaction value, Customer retention, Conversion rate, Foot traffic & digital traffic and finally, inventory turnover.

GOALS THAT MATTER FOR SUCCESS IN THE RETAIL INDUSTRY:

Like any other industry, there are goals & objectives that matter for success in the retail sector. A sector that is highly dependent on the key factors that are associated with the KPIs. The customer-centric ones, i.e. customer retention & customer foot traffic, are for the sake of determining the goals associated with the customers. How do customers need to be retained in a retail environment & what are the measures necessary for the customers? Other metrics or KPIs are the ones that are linked with the profitability of the retail industry & determining factors for the revenue. The most common indicator for growth in the retail sector is the sales volume.

Improved processes linked with improved sales can mean becoming efficient in reaching more customers. Also, improving employee morale and cost-effectively expanding or shrinking your inventory. The FIFO, or First-In-First-Out or LIFO Last-In-First-Out, doesn’t apply here.

However, what applies are the stats or numbers far more practical.

Below are some of the most common KPIs to measure success in the Retail Industry;

SALES PER SQUARE FOOT:

The formula for Sales per Sq. foot is Total Net Sales / Total Square Foot Sales per square foot. It is indeed a compelling metric if you have a physical retail space. It determines the effectiveness of how well the area has been used and the store productivity via sales per sq. inch. Hence, while offering insights into the store & merchandise layouts.

As a retailer, as soon as it gets evident to you how well the store layout is performing. Instantly, you can improve it as well as improve the sales results. Merchandising has a lot to do with this, as this research has found that products at the eye level are more popular than products higher or lower on the shelves.

CUSTOMER RETENTION RATE:

One of the most important KPIs for the customers is the customer retention rate. It is another key KPI for the sake of measuring growth. With digital sales, some tools can track the number of new customers versus repeat customers.

The CRR or Customer retention rate helps determine the progress w.r.t. the customers & how well the retention process of the customers is taking control. It is indeed another vital metric for determining growth in the retail industry.

CUSTOMER FOOT TRAFFIC OR DIGITAL TRAFFIC:

CFT, or Customer Foot Traffic & Digital Traffic, is yet another KPI or Key Performance Indicator used to determine future prospects in the retail environment. CFT, or Customer Foot Traffic, is vital as it determines the number of people coming into a retail environment or store at a specific time.

With this most valuable KPI, you can improve or generate key strategies to generate more visits to your physical locations. Furthermore, to your digital presence, that is a website.

Stats related to Customer Foot Traffic, also known as CFT, always helps as strategists use these figures to ascertain key values & numbers in a digital environment. In simple words, it’s a digital environment’s key KPI. However, in the modern retail environment, digital traffic is a very interesting metric due to the power & influence of social media towards marketing, sales & other promotional strategies. Also includes online buying & selling, which are modern-day influence makers & have key dependencies that relate to digital traffic.

CONVERSION RATES:

This is yet another KPI that gives useful information regarding what turns browsers into customers. Known as the conversion rates & helps retailers know more insights regarding their online digital presence. The only way towards growth is to ensure that your visitors turn into paying customers. Obviously, regarding your reach, your promotions and marketing campaigns make you more known amongst the customers.

It’s more of a digital KPI but a significantly very useful one as