We all sit here day after day and strategize about how we want our retail business to grow. But, how do we measure that growth? With data and analytics, right? Well, yes, but it’s easy for analytics to become cumbersome and overwhelming. Too many metrics make it difficult to read the data and even more difficult to take action on the findings, so retailers must pare down the metrics to the essentials.The kicker is, these essentials differ from business to business. Each is unique! Although there will always be core metrics every retail business should run, many reports will be determined by what you want to achieve and your strategic goals. To measure performance, you must choose KPIs based on your own objectives; do you want:
- Increased sales and margins
- Cleaner inventory
- Higher customer retention
- Increased foot traffic
- More efficient staffing
- Better vendor terms
- Increased sell-through
- More effective marketing plans
- ...what else?!
When thinking about KPIs for your retail business, a helpful framework is to organize the reports by business unit. The ultimate goal is that each team (or associate) runs the key reports that serve to help them make the best possible decisions for the health of the business. They should be regular, consistent, and easy enough for the whole team to use.
Collecting data and harnessing it with the right metrics or KPI’s helps you dial in what, when, where, and how you can stand out in a crowded and unpredictable marketplace.
Remember though, your POS software must be robust enough to take all the data collected on each item, from purchasing through sales, and report on it dimensionally. For instance, Springboard Retail’s Point of Sale reporting allows users to filter, group, sort and compare as well as providing a set of built-in metrics or KPIs for efficiency. In addition, a POS should offer customer fields and be able to save reports, allowing anyone on the team to access them easily.
In the following series, we’ll look at 6 key business units that every retail business from single to multi-store must consider: Sales, Marketing, Merchandising, Inventory, Purchasing and Staffing, identifying the key metrics and essential reports for each one. Stay tuned!
Topics: Retail Analytics