Analytics: Your Most Important Retail Tool
There are some things that every retail operation has in common. One of those is the need for analytics. After all, you can’t change what you don’t measure, as the saying goes.
4 Things Every Retail Business Should Track
Tracking key performance indicators, at the store level and chain-wide, is very important for every kind of retail business. If you want to be profitable and efficient, then you’ve got to measure yourself against your history. Here are 4 specific things every retail business should track all the time:
- Sales – What are you selling, how much are you selling, and when are you selling it? Do you have specific merchandise, brands, or classes of product more popular than others? Do certain products or classes sell more during one time of year than another? These are the types of things you should be tracking, then you make product purchasing decisions based on these numbers.
- Revenues – How do you know if your business is profitable if you don’t measure revenues? Sales do not necessarily lead to profit. You could be selling at a loss if you are discounting too much product too often. It could be an indication of ordering too much of the wrong kind of product. You can fix that, but you have to measure your revenues over time.
- Marketing Campaigns – Is what you are doing working? If not, wouldn’t you like to know it? Every time you implement a new marketing campaign you’ll need to measure its effectiveness. That means tracking where you advertise, when you post to social media, and whether or not you are engaging your audience.
- Employee Incentives – Commissions and bonuses are also important to track. Are you giving too much away to poor performers? Are your incentives actually encouraging sales people to push the right products, or are they disincentivizing? You need to know this so you can make the proper adjustments to your incentivization program and sell more product (and more of the right kind of product).
Analytics is nothing to sneeze at. Successful retail stores and chains are ones that measure performance and measure the right statistics. Your key performance indicators will tell your story for you. Are you doing too much or too little in all the wrong places? If so, then you can make the necessary tweaks to get your retail chain on the right path.