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4 KPIs Retailers Should Live By

4 KPIS Retailers Should Live By What's a KPI? A KPI (Key Performance Indicator) is a data point that's indicative of success or areas in need of improvment. Retailer technology helps retailers to capture and report on data that helps drive their business 28% Technology is paramount to driving growth and enhancing customer engagement activities. Percent of retailers still do not leverage technology in their retail business With all the technology available at our fingertips, this number should be 0% Mark Larson KPMG, LLP Data points to gather. Frequently! COST OF GOODS SOLD DURING SALES PERIOD Stock Turn Rate x 365 INVENTORY COST OVER SALES PERIOD The cost of owning excess inventory for the retailer is 30% or more per year. A retailer can reduce these expenses by monitoring and improving stock turn, thus reducing his inventory level and increasing profit. Sell Thru QUANTITY SOLD DURING SALES PERIOD QTY. SOLD DURING SALES PERIOD + ON-HAND QTY. ON INVENTORY DATE |D Sell Thru percentage is vitally important when looking to replenish seasonal merchandise to ensure your product will sell out at season's end and for future seasonal planning. Due to specific sales periods, sell thru should be benchmarked at the store level based on the selling time period. PROFIT DURING SALES PERIOD GMROI X 365 INVENTORY COST OVER SALES PERIOD ROI is the most important statistic to track because it's the best overall performance indicator to compare to SKUS, classes and suppliers in your store. PROFIT DURING SALES PERIOD AFTER COST Profit (Pre-tax) SALES DURING SALES PERIOD This ratio helps to determine inventory profitability and is especially important when setting product pricing. ail is big and 95% of retail companies have just 1 location. Small busines: competitive. How do you compare? KPI averages across common retail industries Specialty Running 3.4 44.3% 2.5% Women's Boutique STOCK TURN RATE GMROI PROFIT 3.6 48.1% 3.3% STOCK TURN RATE GMROI PROFIT Independent Footwear 1.9 42.2% 4.1% Apparel STOCK TURN RATE GMROI PROFIT 3.7 49.1% 2.8% STOCK TURN RATE GMROI PROFIT Sporting Goods 2.5 42.7% 2.5% STOCK TURN RATE GMROI PROFIT What can data do for you? Technology and data analytics are being embraced by retailers to realize operational improvements 2/3 of retailers have already or plan to adopt web-based retail management systems in 2013 85% of retail executives indicate a growth in their retail business due to the use of technology 4 KPIS Retailers Should Live By brought to you by Sources 8 RICS 800.654.3123 KPMG, Platt Retail Institute, SlideShare, NRF Foundation, The Retail Advisor, Retail Owner, One Step Retail @ricssoftware y software

4 KPIs Retailers Should Live By

shared by RICSSoftware on Jul 18
Retailers must be making data-driven decisions to manage their stores. With the abundance of software available to retailers, there's no excuse not to. In this Infographic, check out some of the most ...


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