Get Started with KPI
What is Retail KPI?
KPI stands for Key Performance Indicators, and are the aspects of a business that reflect how well the business is doing. Every retail business has a unique process of selling and dealing with inventory and employees, so there isn’t a catch-all set of KPI that would fit every store. However, by knowing what KPIs are used for, you can figure out what indicators you should keep an eye out for and track.
Some Common KPIs
Most point of sale systems have at least bare-bones analytics and if nothing else, a history of sales. More complex point of sales have incredibly in-depth analytics available, far more than any one person could ever hope to understand and use to help their business. What you need are the most important indicators to watch and perhaps a few extra to fit your exact business. Each business is different, but here is a list of commonly used indicators:
- Sales and Gross Margin
- Sell Through Rate
- Items per Sale
- Customer Loyalty
- Sales Goals
These indicators taken by themselves, as well as compared against each other, are often enough to find any weaknesses to fix or strengths to improve.
How Do KPIs Help Me Make Money?
Knowing your KPIs gives you a distinct advantage as a retailer, as they will tell you how your store is doing and what, if anything, needs to change. KPIs aren’t only good for reactive adjustments, they can be used predictively, as well.
Suppose you have a KPI showing stock levels and sell-through rates for various categories in your inventory. By reviewing this KPI back to last year, you might discover that you did a booming business in running shoes at the start of March, but ran out of stock and weren’t able to get new supply in until June, too late to catch the bulk of the new running season. (In this example, it takes two months to get a shipment from your supplier.) Knowing that there will be a huge demand for running shoes at the start of March, you can prepare for it by ordering extra stock at the beginning of February and having your supply perfectly aligned with demand, thus increasing sales.
How Can One Step Retail Solutions Help You with KPIs?
One Step Retail Solutions provides point of sale to retailers and is an expert in installation and setup. Part of that is teaching the retailer to use their point of sale analytics and work out the best KPIs for that retailer’s individual needs. Having an expensive point of sale but not knowing how to use the analytics is an enormous waste of potential.
If you’re still on a point of sale with limited analytic capability, or you’re looking at expanding, we strongly suggest upgrading your point of sale to one that has the KPI capability to give you the ROI you need.
Want to know more about Retail KPIs?
Check out our KPI articles! There’s a lot to know about KPIs and how to implement them in your store, but we’ve put together a solid introduction to the subject.