Key Performance Indicator  for Retail

            A Key Performance Indicator is a measurable value that demonstrates how effectively a company is achieving key business objectives. Organizations use KPIs at multiple levels to evaluate their success at reaching targets. 

            A retail KPI is a performance measurement to track the important retail processes in an efficient way. These KPIs are used by retailers to increase profits by identifying consumer patterns as well as a bottleneck within the ordering or shipping process. Monitoring them will help entrepreneurs identify progress toward sales, marketing, and customer service goals.

Choosing the Right KPIs

            Retail stores need to choose the right KPIs when measuring their business processes or goals. Each KPI must have a specific purpose, must be measurable quantitatively or qualitatively, must have a realistic goal, must be relevant to the strategic direction of the store and should be measured within a specific timeframe. 

            Sales bring in revenue so they’re one of the most important and basic metrics to track. Modern sales are quite complex because they can be generated through different channels, and there are several factors involved. Here’s a look at some of the most important KPIs in this category:

• Sales Per Square Foot: Analyze the cost to maintain retail space
• Sales Per Employee: Keep track of employee performance, investment, and revenue generated by the staff.
• Foot Traffic: Tracks how many people walk into your store
• Average Transaction Size: Analyze the purchasing behavior of customers
• Average Units per Customer: Get insights on customer behavior trends
• Total Volume of Sales: Track your sales numbers over time
• Back Order Rate: Measure the ability to fulfill customer orders
• Rate of Return: Evaluate the number of orders returned to you
• Customer Retention: Learn how to keep customers in the long run
• Customer Satisfaction: Correlates with retention since the level of service/good sold has a direct effect on retention.
• Total Orders: See the evolution of orders placement
• Total Sales by Region: Evaluate how much you sell and where
• Order Status: Track and analyze your orders in real-time
• Perfect Order Rate: See how many orders are delivered without incidents
• Return Reason: Get insights on why customers return their orders

Know where your retail business is headed and how to get there

            Key performance indicators are the standard for measuring business achievement in any industry. But using just any KPIs in your retail business could mean missing out on essential, retail-specific information.

Don’t follow the crowd when it comes to retail KPIs

• Understand the importance of setting business goals based on actionable data.

• Learn about the KPIs that are needed to lead in modern retail, from tracking sales to customer-centric progress

• Find out the way to calculate KPIs and how they link to your core business areas.

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