How do you use KPIs to evaluate merchandising performance?

1 What are KPIs?

KPIs are measurable values that indicate how well you are achieving your business objectives. They help you track and evaluate your progress, identify strengths and weaknesses, and make data-driven decisions. KPIs can be used for different aspects of your business, such as marketing, operations, finance, and customer service. For merchandising, KPIs can help you measure how effectively you are displaying and selling your products.

3 What are some examples of KPIs for merchandising?

When it comes to merchandising, there are many KPIs to consider, such as revenue, gross margin, sell-through rate, stock turnover rate, conversion rate, average order value, basket size, customer lifetime value, customer retention rate, and net promoter score. Revenue is the total amount of money generated by sales, while gross margin is the difference between revenue and cost of goods sold, expressed as a percentage of revenue. Sell-through rate is the percentage of inventory sold within a given period of time, and stock turnover rate is the number of times inventory is sold and replaced within a given period. Conversion rate is the percentage of visitors who make a purchase, and average order value is the average amount of money spent by customers per transaction. Basket size is the average number of items purchased by customers per transaction, and customer lifetime value is the estimated total amount of money a customer will spend with a business over their lifetime. Finally, customer retention rate is the percentage of customers who make a repeat purchase within a given period of time, and net promoter score is the percentage of customers who are promoters minus the percentage of customers who are detractors.

4 How to measure and analyze your KPIs?

Once you have chosen your KPIs, you need to collect and analyze the data that will help you calculate them. Point-of-sale systems, customer relationship management systems, web analytics tools, and surveys and feedback are all useful tools and methods for gathering data. You should measure and analyze your KPIs regularly, such as weekly, monthly, or quarterly, and compare them with your targets, benchmarks, and competitors to assess your performance and identify areas for improvement.