Retail has always been a cutthroat industry, but today it’s more so than ever. With competition from all angles, not least from the likes of online giants such as Amazon, retailers need to work harder and smarter to stay afloat, let alone prosper.
If you work in retail, particularly in a small business, one of the ways you should drive your business is through the use of daily and weekly sales reports. Accurate and timely sales data is essential for smart decision making. It can be the difference between treading water and cutting waves.
But what sales data should you be tracking, and how can it be used within your retail environment to make a real impact on your business?
Here’s a look at nine key retail sales metrics you need to keep your business moving forward and make data-driven decisions.
Sales By Date
How are you performing in terms of revenue generation on any given date? How does that data compare with the equivalent time periods for previous days, weeks, months, and years?
Having a comparison by day is important as it allows you to track your performance against previous dates and times.
When recording sales data by day, try to log any information that might be relevant for that day. What was the weather like? Were there any events happening locally that might either detract from your footfall or attract people into your store? Were you running any promotions or did you have any new products that had just launched?
For comparing your sales in the future, having a record of the factors that affected your trade on that day will give you the information that you need to make decisions or understand why you may be trading up or down.
Sales By Location
If you have multiple sites in your retail operation, you’ll need the ability to accurately compare their performance.
While different stores will trade at different levels, it’s possible and may be helpful to group stores based on their their average turnover.
Comparing your stores against each other will allow you chance to identify any patterns you should pay closer attention to or investigate.
Footfall is a measure of the number of people who enter your store—whether they buy anything or not. Tracking this data is valuable to your business as you can look for patterns, spot anomalies, and monitor your performance.
(The online equivalent for ecommerce merchants would be total website visitors.)
There are a range of factors that affect footfall. The weather may contribute to poor or good performance. For instance, a shop in an indoor shopping center may fare well on days when it is raining, whereas a street-facing store will struggle during the rain.
Nearby events may also bring people into your store, or they may take people away from it.
You can track your footfall through the use of a footfall counter which will count the number of people who enter your store.
Of course, counting the number of people who enter your store only indicates the potential you may have to make sales. You’ll also want to see how well you’re doing at converting these visitors into customers.
Sales conversion is the percentage of customers who have made a purchase compared to the number of visitors entering the store.
Factors that can affect sales conversion include the customer service you offer, the availability and the range of products you have on offer, and the way that the store is set up and merchandised.
This information is valuable as it shows how well you are doing at turning visitors into customers. You may be able to see patterns from this such as better performance on certain days of the week, worse performances when certain staff are in, or an uptake when you have just had a delivery.
Average Transaction Value
Tracking the average value of your transactions will give you an idea of whether your team members are working hard to make the sales. Many companies will set targets based on average transaction value (ATV).
Factors which could affect your ATV include the customer service your team provides and the availability and range of products on offer. Think about how you merchandise your products, too.
This information can useful in training and motivating your team.
To calculate the ATV for your store, simply divide the total sales revenue for the day by the number of transactions.
Items Per Transaction
For many companies, increasing the number of items in the basket is important. This means link selling and promoting add-on sales at checkout. You can enhance link sales and add-ons through customer service and thinking about where you position products in relation to other items often purchased together.
Sales By Employee
Monitoring the sales of individual employees is important. If you run a store where a sales assistant is part of the customer journey from initial approach through to putting the sale though checking out, then you can monitor how individual employees have performed.
Make sure that all of your employees are set up on their own POS IDs and that no one is sharing login details.
Tracking sales by employee is useful when it comes to monitoring the performance of individuals in your team. This can help to motivate team members. It can also be used for performance evaluations, coaching, and if the need develops for disciplinary proceedings.
Individual Product Sales
Your store may sell thousands of different SKUs, and monitoring the performance of each product is crucial to making informed decisions about buying and merchandising.
When looking for software that can track product sales data, look for a tool that will let you sort data by profit margin, as well as gross sales by volume, and quantity.
Sales By Department
Sales by department is a useful to help make decisions about your in-store merchandising. If your store has several different product groupings or departments, you’ll want to see which are the best performing areas of your store, and which require development.