More than ever, businesses need to leverage data to stay competitive in an ever-changing corporate world. The proliferation of analytics software has made it easier for companies to get the most out of their collected data.
There are many factors that contribute to the success of a retailer today. And the turbulent waters of this industry make data-driven insights necessary.
Here are seven key performance indicators in retail business intelligence.
Sales Per Square Foot
There has been much debate as of late regarding the future of physical retail. While for the time being it certainly seems that there’s a place for it, online shopping is posing a huge problem of brick-and-mortar stores. Therefore, it’s essential for retailers to keep track of sales per square foot. Stores can be consolidated or sold off if they are underperforming in this area.
Customer Acquisition Cost
Brands should strive to build and retain customer loyalty. Part of the reason why this is so important is because it can be expensive to gain new customers .
Retailers should certainly track the cost of acquiring customers through various means. Fortunately, other innovations in retail analytics are making it easier for businesses to target potential consumers with greater accuracy.
It’s the most basic piece of data for retailers, but also the most important. How many sales were done over a given time? The bottom line has always been critical for retailers. Now, with the advent of analytics software and retail business intelligence , it’s possible to go much deeper into this major key-performance indicator (KPI).
For example, companies can use analytics software to parse sales numbers by region, store, manager, or time of day. Breaking down sales in this way can lead to greater insights that can in turn increase profits.
Spend Per Customer
Not all customers are created equal. Some will spend a lot of money buying many items, and some will only spend a few dollars. Both audiences can be important to your business. However, you want to keep track of the amount spent by customers.
It’s possible that certain variables will tend to increase spending. Identifying these stimuli will allow businesses to get a better return on every checkout.
It’s important to keep tabs on what shoppers think of your company. It can be difficult to get accurate readings of this, as many people don’t want to fill out surveys—or won’t be completely honest with them.
Then again, gauging the happiness of your customers is something that retailers need to attempt to continually improve services. Here are a few metrics that are great for evaluating customer satisfaction : net promoter score, complaint escalation rate and view of brand.
Place Of Purchase
In the past, place of purchase just came down to whether someone bought a good at Store A or Store B. Now, with the proliferation of online and call-in ordering, retailers need to maintain an accurate record of their omnichannel sales.
Now, you will want to do this to identify the most profitable areas of your company. At the same time, you might find interesting patterns that affect sales volume at different places of purchase. Manipulating strategies to take advantage of these can greatly increase the viability of otherwise average sales channels.
Profit Per Unit
It’s also important for retailers to keep track of how much money they’re making from each unit. In a basic sense, this can just be calculated by subtracting costs from the sales price. Still, there can be more in-depth aspects of this KPI if you really want to delve into it.
For example, your costs for an item technically increase if it’s not selling well, and taking up inventory space by sitting in your warehouse. It’s smart to get a highly capable retail analytics software platform to tackle some of these more difficult calculations.
Any business that wants to be successful in today’s economy needs to know its relevant KPIs. This is especially true for retailers, who often need to fight for every percentage of profit. Don’t neglect the importance of data analysis when running your retail organization.
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