Knowwhathappensinyourstores:Top11KPIsforsuccessinretail

The retail industry is one of the most competitive there is, with a sharp focus on
constantly increase sales and retain the maximum number of customers. In order for a
the organization manages to stay at the top and position itself over its competitors, it is
It is essential that they know and understand everything about their stores and what happens in them.

Although there are hundreds of key indicators that allow measuring performance (better
known as KPIs), the following stand out in terms of competitive advantage.
When correctly interpreted, these KPIs help to execute processes more
efficient and consequently, increase sales and reduce costs.

It is important to understand that a single KPI is not representative when making a

analysis within retail, each of them goes hand in hand with another indicator that allows
interpret the information and give it meaning for the sustained improvement of the business.

FootfallorNumberofVisits

Tracking the number of visitors to a store is a basic metric that every retailer
should do. Either due to the start of a peak season, a new location or store,
a new display in the showcase or a recently launched loyalty program, the
the number of visits will provide you with knowledge about what is working and what
it needs to be optimized. Once this number is known, it is important to know if these
Visitors are generating revenue or not, for which we will use other KPIs.

2.SalesandNetMargin

The main performance indicator for a retail store is the sales generated.
over a specific period of time. Sales can be compared between locations,
stores, products, categories, etc. to identify performance trends and formulate
marketing strategies, promotions and offers, among others.

The indicator associated with the net margin is what allows us to really measure how much
Cash is the business generating profits on every peso ($) that comes in from sales.
Why is it important to take it into account and not just look at the total sales of each store?
We know that behind every sale there are associated costs, so we need to pay attention to.
Only the sales of each store could lead us to overestimate its profitability.
This KPI is fundamental when making financial decisions in the short and long term.
especially in pricing strategy.
3. Conversion Rate

Studies show that only 30% of visitors who enter retail stores
They make a purchase, leaving 70% of potential customers that can be
influenced to buy.

This indicator allows establishing how many sales are completed in relation to the visits.
what a store receives.

The calculation of this relationship is very simple:

Conversion rate = Number of purchases / Number of visitors

This simple operation is the starting point to evaluate how to improve aspects of your
stores, such as distribution within them, range of products, promotions and
payment processes, that when aligned with consumer expectations, can
increase the conversion rate without needing to invest more money in marketing or
promotions. This translates into higher sales, committing the same amount (or
even fewer) resources, a highly beneficial aspect in times of scarcity
growth in the country's economy.

4.SalesbyCategory

Not all products contribute equally to sales. The goal for a

the most effective operation is to reduce inventory in categories that do not generate sales, and
enhance the best categories. This KPI gives us vital information for better
inventory planning, avoid stockouts or unnecessary accumulation of
idle products, etc.

If, in addition to this, sales per square meter are considered, the retailer will also be able to
study which store sectors have better distribution, what merchandising or
POP attracts more customers and it is justified to add or eliminate spaces within the establishment.

5.ConversionRatebycategory

Just like in the previous case, the conversion rate by category allows us to know
the percentage of transaction completion, but taking into account a category of
interest. This facilitates the comparison of that category between similar stores in order to
define the purchasing behaviors of a particular segment and thus establish better
marketing strategies related to pricing and promotions that lead to an increase in
the sales.
AverageTicketandAverageBasket

This data helps retailers understand how much money customers spend on average.
how many units are being purchased in each transaction. It can be measured daily, weekly
and monthly or for longer periods.
The numbers in this case can be very variable depending on the business and industry.
For example, in the case of jewelry businesses, the average tickets will have a very high value.
high, but the average basket will be minimal, while in the case of businesses of
massive consumption the average tickets may not be so high and the average basket
will have many more elements. Each company chooses which indicator to give more weight to,
according to their area of action.

7.InventoryRotationandManagement

The inventory turnover indicates the number of times the average inventory of a
the product is sold in a year. It is an indicator of how quickly you can sell your
inventory. If the inventory turnover ratio drops from 10 to 6, it means that the
inventory is not moving at the same speed as it did in the past, which
it translates into an excess of inventory.

If this happens, the retailer must consider occupying spaces designated for products with
lower turnover with higher turnover products, or reconsider their strategy to be able to
sell this idle merchandise..

8.SellThroughRatio

The sales rate expresses the percentage of inventory units sold during a
period.

It is calculated as follows:

Units sold / Initial Inventory Available (in the same period)

This rate indicates how much inventory can be sold in a given period and it
becomes indispensable when working with seasonal products, as it helps to the
sales planning for them, in which ideally, they should all be sold
products before their season ends.
9. Visit Frequency

This indicator locates recurring customers in stores or points of sale.

using technologies like WIFI, to know how many times an individual returns
to a place.
Various customer loyalty studies, such as those conducted by the renowned
Nielsen company has shown that the most loyal customers, that is, those
Repeat buyers of the brand have a greater impact on profits.

Companies with successful loyalty programs, such as Starbucks, have

seen significantly increased their profits. A large percentage of the growth of
its sales have been attributed to this loyalty plan, which increased its active users in
a 28% compared to the previous year, reaching a number of 10.4 million members.

By identifying frequent customers, the retailer can evaluate their purchases and work on
the most efficient loyalty strategies that allow converting repeat visits into
transactions.

10.SalesperVisit

Indicate what the return per visit is, encompassing the factors that influence it: conversion and the
average ticket.

It is defined as:

Sales per visit = Average ticket x Conversion

If a store has higher sales per visit, it means that its salespeople are more
skilled at making the people who enter that store spend more.

Facilitates the identification of purchasing habits of customers from different stores to

make the most of promotions.

11.ServiceIntensity

The service intensity indicates the relationship between the number of visits in an hour by
the number of available sellers in the store at that moment. Helps to identify
spaces to maximize sales opportunities.

The idea in interpreting this indicator is to be able to determine the schedules and distribution of
personal, in such a way as to have enough sellers per customer during peak hours
to ensure a minimum of conversion, and less idle service during low hours for
reduce costs.
 Advantages of Point of Sale (POS) Solutions:

The use of mobile visualization tools allows for the appreciation of the different KPIs in
a common platform, from where reports can be shared with colleagues and
relevant stakeholders in retail organization.

These platforms work from Android and iOS devices, with just a few.
clicks on your cell phone screen, allowing you to send notifications and access the data of
immediate manner, simplifying the preparation of spreadsheets, and understanding of
the indicators, and democratizing access to information for more members
involved in store processes.

To succeed in today's retail world, it is not enough to develop

monthly or weekly reports, easy and quick access is essential, everywhere
moment, to the information of each of the stores associated with your business for
being able to maintain its operation at optimal levels, reducing costs and
boosting sales.

To summarize, the advantages that these tools provide us are:

Instant access to relevant information from all your locations/stores, helping to

detect contingencies, resolve them and foresee them for the future.
Create visual reports with reliable data and share them anytime and anywhere.
They eliminate the burden and complication of analyzing extensive Excel files to obtain
basic conclusions.
Quickly compare information related to KPIs to make better decisions
and faster.
Send and receive data in real time to maintain constant control over metrics
associated with sales, sales per hour, visits, etc. Everything at your fingertips.
As tools that integrate several solutions, they reduce costs compared to subscriptions to
software or multiple suppliers.