Finance today operates in a highly technological environment, which helps us to make precise results and predictions while optimizing resources.
Technology is a key factor to measure a shop’s performance in real-time which also allows businesses to make strategic decisions on the go. More specifically, we are talking about key performance indicators.
What are KPIs?
The term KPI stands for “Key Performance Indicators”. The acronym speaks for itself, as it is an indicator that allows businesses to measure their performance on different aspects.
It is based on data or metrics used to synthesize all the information used to analyze the productivity and effectiveness of the actions being implemented in retail management.
Its purpose, specifically, is to determine whether a company is meeting its goals, is profitable, and is gaining the acceptance of customers.
Steps to measure retail performance
The commercial process of your company needs to be structured through well-defined processes and actions, which are oriented towards achieving goals, thus, making the most of every sales opportunity.
It is advisable to measure the KPIs of a retail store with specialized software for accurate and fast results that can allow you to make real-time decisions. For example, with the retail KPI dashboard offered by Orquest, it is possible to measure the most important KPIs of a store. With it, we can visualize all the information with intuitive graphics on a dashboard.
Once you start using the retail KPI dashboard you will easily visualize all the reports concerning traffic, sales, conversion rates, as well as other important elements that are part of your sales and marketing management.
This will allow you to make comparisons at different times of the year by controlling all the processes monthly, in order to determine their profitability and correct the course in case the goals are not being reached.
You will do all this based on data, numerical, concrete, and measurable indicators in order to have several alternatives that allow you to improve the retail performance.
Importance of the KPI in the performance of a shop
KPI indicators are essential in every retail business, as they are the basis to generate actions aimed at producing revenue.
Retail performance needs to be continuously evaluated in order to increase sales and maintain customer satisfaction; KPIs are data that depend on your business goals, the type of retail activity, and the hours within which it provides its services, all of which are individual indicators.
Every manager needs to know these key data and information, in addition to monitoring, analyzing, and comparing them to determine whether their retail management is being successful.
Nowadays, thanks to advances in new information technologies in automated systems, the creation of computerized databases, and other resources, using KPIs to control your business is much easier; especially when you select a specialized analytical tool such as the one mentioned above.
With KPIs, you can have an overview of the consequences regarding your strategic actions both concretely and globally; it is of relevant importance for the establishment of weak and strong points that are key to reaching goals.
On the other hand, by knowing the impact that your products or services are having in the market, you can maintain or reinforce your marketing campaigns to continue offering consumers what they are really interested in.
Finally, retail KPIs help you determine the inventory rotation and how many times your products are sold in a given time. This will be a reflection of how successful they are with consumers and with its analysis, you will be able to precisely know what users are looking for to guide your management in order to attract potential customers.
The most relevant KPI indicators in the retail sector correspond to the number of visits at points of sale, purchases made, profit margin, conversion ratios, the average ticket that represents an average of each customer’s spending, inventory turnover, and the degree of customer satisfaction; all of these are elements that you can monitor as part of a retail KPI dashboard.
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