I like this post. While I added some KPIs to their list, I think it is a good list to get retailers on the right path…
KPIs in Retail and Store Analytics (continuation of a post made by Abhinav on kpisrus.wordpress.com:
A) If it is a classic brick and mortar retailer:
Retail / Merchandising KPIs:
-Average Time on Shelf
-Shrinkage % (includes things like spoilage, shoplifting/theft and damaged merchandise)
-Coupon Breakage and Efficacy (which coupons drive desired purchase behavior vs. detract)
-Net Promoter Score (“How likely are you to recommend xx company to a friend or family member” – this is typically measured during customer satisfaction surveys and depending on your organization, it may fall under Customer Ops or Marketing departments in terms of responsibility).
-Number of trips (in person) vs. e-commerce site visits per month (tells you if your website is more effective than your physical store at generating shopping interest)
B) If it is an e-retailer :
-Shopping Cart Abandonment %
-Page with the Highest Abandonment
-Dwell time per page (indicates interest)
-Clickstream path for purchasers (like Jamie mentioned do they arrive via email, promotion, flash sales source like Groupon), and if so, what are the clickstream paths that they take. This should look like an upside down funnel, where you have the visitors / unique users at the top who enter your site, and then the various paths (pages) they view in route to a purchase).
-Clickstream path for visitors (take Expedia for example…Many people use them as a travel search engine but then jump off the site to buy directly from the travel vendor – understanding this behavior can help you monetize the value of the content you provide as an alternate source of revenue).
-Visit to Buy %
-If direct email marketing is part of your strategy, analyzing click rate is a close second to measuring conversion rate. 2 different KPIs, one the king , the other the queen and both necessary to understand how effective your email campaign was and whether it warranted the associated campaign cost.
Site Operations KPIs / Marketing KPIs:
-Error % Overall
-Error % by Page (this is highly correlated to the Pages that have the Highest Abandonment, which means you can fix something like the reason for the error, and have a direct path to measure the success of the change).
-Average order size per transaction
-Average sales per transaction
-Average number of items per transaction
-Average profit per transaction
-Return on capital invested
I hope this helps. Let me know if you have any questions.
You can reach me at mailto://firstname.lastname@example.org or you can visit my blog where I have many posts listing out various KPIs by industry and how to best aggregate them for reporting and executive presentation purposes ( http://www.lauraedell.com ).
It was very likely that I would write on KPIs in Retail or Store Analytics since my last post on Marketing and Customer Analytics. The main motive behind retailers looking into BI is ‘customer’ and how they can quickly react to changes in customer demand, rather predict customer demand, remove wasteful spending by target marketing, exceeding customer expectation and hence improve customer retention.
I did a quick research on what companies have been using as a measure of performance in retail industry and compiled a list of KPIs that I would recommend for consideration.
Customer being the key for this industry it is important to segment customers especially for strategic campaigns and to develop relationships for maximum customer retention. Understanding customer requirements and dealing with ever-changing market conditions is the key for a retail industry to survive the competition.
- Average order size per transaction
- Average sales per transaction
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