As retail industry technology continues to evolve, retailers have access to more metrics and data than ever before. These metrics, otherwise colloquially known as “key performance indicators” can help retailers understand their business performance, identify areas for improvement, and make data-driven decisions. In this guide, we’ll explore some of the most important retail key performance indicators or “KPI’s” for tracking your store’s growth and performance.

Here are some of the most useful retail KPIs:

  1. Sales per square foot: This metric measures how effectively you’re using your physical retail space. Sales per square foot can provide insights into store and merchandise layouts, and help you identify opportunities for improvement. By analyzing sales data and customer behavior, you can optimize your store layout and improve sales results.

  2. Gross margins return on investment (GMROI): This metric measures the profit you make from the amount you invest in your product stock. By tracking GMROI, you can identify which products are worth carrying in your stock and which ones are not. This can help you make data-driven decisions about your inventory and maximize your profits.

  3. Average transaction value: This metric measures how much customers spend in your store each time they make a purchase. By encouraging customers to increase their average purchase through merchandising strategies or shopping promotion programs, you can boost your profits and grow your business.

  4. Customer retention rate: This metric measures the percentage of customers who return to your store after their initial purchase. Repeat customers are a steady source of profit for long-term growth, so it’s important to focus on customer retention. By analyzing your customer data, you can identify opportunities to improve customer retention and build strong relationships with your customers.

  5. Conversion rates: This metric measures the percentage of website visitors who take a desired action, such as making a purchase or filling out a contact form. By improving your website’s conversion rate, you can turn more website visitors into customers and grow your business.

In conclusion, key performance indicators are essential for retail businesses that want to succeed in today’s competitive market. By tracking the right KPIs and analyzing your data, you can make informed decisions that drive growth and improve your bottom line. However, many retailers simply don’t have the ability to get the right KPIs because they don’t have enough time or resources to digitize the large amounts of necessary raw data. One simple solution is to outsource all data entry to a firm such as Pro Retail Management, and have them eliminate all data entry and also provide all financial and operational reporting, including the KPIs you need to make informed decisions.

Whether you’re an online retailer or a brick-and-mortar store, understanding your business performance through data is critical to your success.