It also helps identify troubling trends and issues with overall performance. For example, your profits and conversion rates might be sound, but your growth KPIs might still show a downward trend. It all boils down to money and business owners want to keep track of it. You want to know your profit margins, ROIs, investments, etc. Here are some KPIs that provide insight into how much money your business is earning or spending:.
Net profit is the profit earned after all business expenses are accounted for. Both of them provide insight into your expenses and earnings. The data from these metrics can help you channel your resources, plan cost cuts, and introduce business strategies accordingly.
This metric tells you how much people spend on your products on average. A high transaction value indicates that people are buying more products or higher value products from your store. A low value indicates that people are buying fewer items or lower-priced products from your store. This provides insight into the nature of how your customers interact with your business, and can inform pricing and product strategies. It is also a good idea to track the cost of and profit from every sales lead.
It can give you an idea of how different types of lead pass through your sales cycle, and how they translate into revenue. This metric will also help you understand where you need to optimize your marketing campaigns to attract more leads at a lower cost.
These examples of retail KPIs should help give guidance of some common KPIs you might use to track the key business objectives of your retail organization. The data collected can help you make smart decisions, avoid common pitfalls and contribute to growth. Most businesses track their KPIs on a monthly basis to keep an eye on their progress.
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Courses Learn from the best and brightest at Cascade and become a strategy expert. Product Hub. Take the Cascade personality test. Share this post:. Type : Org Chart Template. How many metric, or KPI definitions, are included in this download? For which areas? Simple as that. But I need something custom. Can you help? Have a question? Call: Email: info opsdog. To find it, use the formula:. This metric gives you a general idea of how much people are spending. You could derive some insights and action steps from this KPI.
For instance, having a low average dollar per transaction could indicate that you need to rethink your pricing. Or, it could mean that you have to implement new sales tactics such as upsells, bundles, or other offers to get shoppers to spend more. Look into upselling or cross-selling. Done right, both tactics enable you to increase sales while helping customers at the same time. The key to upselling or cross-selling success is doing it correctly and at the right time and place.
The 1 rule here is to always provide value. Yes, getting someone to upgrade their purchase or to buy an additional item will benefit you, but the deal must also be advantageous to the customer. Basket size measures the number of units sold per transaction. It is calculated using the following equation. That said, this metric varies widely depending on your vertical. Our data shows that , beverage manufacturers had the highest basket size, with 3.
This is also a relevant KPI to track when running specific initiatives. Increasing your basket size is all about encouraging shoppers to consider or purchase more items from your store.
You can do this by:. This is new metric that benefits omnichannel retailers — i. To measure it, you need to look at your ecommerce analytics and see how much traffic or revenues are generated from locations where you have a brick-and-mortar presence.
You can measure the impact of your store on ecommerce by looking at web traffic and sales from users in relevant zip codes i. Consumers today are increasingly using multiple channels to shop, so you need to get a handle on how your physical presence influences your ecommerce sales.
If your business growing? How better off are you compared to your previous years in business? To figure this out, calculate your year over year revenue growth with the following equation:. Continuous improvement is a goal you want to strive for, and the best way to track your progress is to measure your current results against the previous period.
This will help you track how your business doing so you can react accordingly. If your growth has stalled, then drill down on the reason behind it. Is it the market? Are you failing to keep up with the latest trends? Is a competitor eating up market share?
Whatever the case, figure out the reason and then take the necessary steps to improve. Also known as inventory turnover, this metric pertains to the number of times stock is sold through or used in a given time period. Stock turn is a critical metric for determining your optimal inventory levels.
However, if your stock turn is too fast i. It all depends. If your inventory turnover is too low, you need to be leaner with your merchandise and avoid over-ordering products. You should also make it a goal to move your slow-moving or dead merchandise ASAP. Here are some posts to help you do just that:. Dealing with high stock turn?
GMROI tells you how much money your inventory has made. You use this metric to figure out if your stock is turning a profit. Accomplishing that can mean:.
Sell through is the percentage of units sold versus the number of units that were available to be sold. Sell through is a great way to evaluate merchandise performance.
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