How to measure your retail store’s success
If you run a retail store, then you most likely need to know exactly how successful the store is. However, trying to understand your store’s success level can be difficult. Luckily, there are a number of retail metrics that can help you to understand the retail success level of your store. Here is a closer look at some of these metrics.
1. Number of customers
The higher this number is, the more successful your retail store is likely to be. This is because the more customers that you have, the more money is likely to be spent at your store. If your store is an e-commerce store, then you can easily monitor the number of customers that you are getting through analytics. If your store is a brick and mortar store, then you can track the amount of transactions made in your store.
2. Average sale value
This metric lets you know what the average sale value is for purchases made in your store. This metric lets you know roughly how many customers you need to be profitable. You can calculate the average sale value by taking the total sales value of all of your sales and dividing it by the number of transactions. This can help you gain very important insight into your customers’ purchasing habits at your store.
3. Gross profits
Gross profits tell you how much money your business is actually making. Gross profits are not the same as revenue. Gross profits are calculated as total sales minus the cost of generating the sales. The cost of generating the sales is subtracted because you need to make more than these costs in order to make money. Whatever you have left after you subtract the sales costs from the total sales value is the money that you get to pocket. The higher this number is, the more retail success that you are having. Gross profit is a highly important retail KPI or key performance indicator.
4. Loyalty factor
Loyalty factor is another retail KPI that is extremely important. This retail metric measures how loyal your customers are to your business in the long term. Loyalty factor is calculated by multiplying the number of purchases over the past 12 months by total sales/months since last purchase. The result will let you know how loyal your customers are. This can help you figure out what your sales may be in the future.
Certain retail metrics can give you key insight into how well your business is performing. The metrics listed in this blog are all very helpful for this purpose. Once you analyze the results of these metrics, you should have a good indication as to whether or not your business is on the right track.