10 Indicators to Test the Popularity of Retail Store

As a retail store operator, you must understand the importance of collecting and analyzing data. If the KPI (Key Performance Indicator) is neglected, there is no way to optimize sales.

Let’s take a look at the 10 KPIs discussed below. Their performance can directly reflect the performance of a retail store.

1. Monthly sales target

As the name suggests, the monthly sales target is how much money you want your shop to make every month. This indicator does not have to be limited to monthly, you can also choose to monitor daily, weekly, quarterly and yearly sales targets. However, the monthly sales target is a good intermediate value, because the daily and weekly targets are too frequent to truly understand how your sales activities work.

2. Inventory turnover rate

Inventory turnover rate mainly focuses on the daily, weekly, monthly, quarterly or yearly inventory of retail business. This is another key performance indicator for retails, because if some months are obviously off-season, the number of purchased goods can be reduced to reduce costs.

3. Average customer unit price

First of all, it can reflect customer satisfaction with the product. A higher average customer price indicates that the store is good at selling products at high prices, or small profits but quick turnover. This data has a great guiding effect on management. If the average customer unit price is high, the bosses can prepare more inventory. Otherwise, they need to reduce the inventory or make changes in sales to increase the customer unit price.

4. Cross-selling rate

Cross-selling rate is a KPI that all retail businesses should value. It shows that customers can not only find what they want, but also consume other products that are useful to them.

5. Total order

Total order is a very common sales KPI. It can also be compared in a specific time period: daily, weekly, monthly, etc. By tracking the total orders, you can clearly understand the performance of the company from multiple perspectives.

6. Customer order quantity

Increasing customer loyalty is what all companies are striving for, whether it is retail, B2B, online shopping or any other industry. The number of transactions for each customer reflects their loyalty. If a large number of customers keep repeating their purchases, it means that your store has a strong connection with customers.

7. Inventory to sales ratio

The inventory-to-sales ratio shows how many items need to be purchased. A high ratio means that the store has bought too many unpopular products, while a low ratio means that most of the products in the store have been sold.

8. Average residence time

Consumers’ average residence time is to focus on the length of time the customer stays in the store. Normally, the longer the customer is in the store, the greater the chance of buying something.

9. Return rate

If the return rate is very low, indicating that customers are satisfied with their purchase, it will likely bring a higher repurchase rate. If the product’s return rate is high, it means that customers are not satisfied with the goods they have purchased, and the store must leave room for other products with better quality and more popular products.

10. Backorder rate

For retail stores, a higher rate of backorders can be both good and bad. On the one hand, it shows that certain products are in great demand, and the supply exceeds demand, and it is necessary to increase purchases in the future. On the other hand, the longer customers wait for the product they want, the less likely they are to repeat consumption.