Business Dashboard Topic: Tracking KPIs and Metrics for Retail Stores
Walking along Fifth Avenue in Manhattan, I noticed through one of the store windows this dashboard. Titled Retail Scorecard, it’s a pen and paper (ok, erasable marker and plastic poster) dashboard used by the retailer to track store performance metrics.
I won’t name the retailer as I’m sure their management would not appreciate the fact that it’s viewable by anyone looking into their window (talk about management transparency!), but it’s a brand name that everyone would recognize.
The metrics contained on this scorecard are difficult to make out from this quick snapshot, but they focus on relative sales performance by sales person. Each line indicates a sales representative and the board tracks the number of units of certain items sold.
I couldn’t make out if the Retail Scorecard also contained sales goals.
Seeing this sales dashboard for a retail store reminded me of an article I recently read titled Retailers Counting on Conversion Analysis to Drive Store Metrics.
Did you know that there is HUGE opportunity for retail stores to improve performance simply by measuring and optimizing conversion rates?
Retailers are combating the recession by focusing on conversion rates:
“Knowing your conversion rate lets retailers see how well they are doing, how much the shopper felt the promise of your brand at the door, delivered on the rack, and how much money you might be leaving on the table.”
Some big brands are spending money on this area:
Virgin has credited the analysis with uncovering variations of up to 20% in average transaction values between stores, as well as a 15 point difference in conversion rates between its highest and lowest performing stores. Jason Toy, a division manager for Virgin Retail, said the analysis has been beneficial in highlighting store level performance, as well as regional customer profiles. “From the outset we linked the FootFall information to our store customer service program which has been extremely effective in creating a clear understanding of how service drives conversion,” he said.
Once retailers start collecting the performance analysis from individual stores, they are often surprised by the results. “If you were to ask a retailer how many shoppers they convert, the assumption is typically north of 50%,” said David Smyth, Vice President of sales operations for Experian FootFall. “In reality, the average conversion rate ranges between 20% and 40% for most retailers. Using that average, that means about 70% of shoppers are leaving the store without buying anything. That means retailers are leaving an awful lot of money on the table.”
With major retailers realizing that even a 1% improvement in conversion rates can equate to millions of dollars dropping to the bottom line, more and more are utilizing traffic counting analysis– not only at the headquarters level, but also providing the analysis directly to store managers and other personnel. For example, Marks & Spencer has used its visitor count system to build staffing plans that better match the customer to each department within a store. “By making small, simple, sustainable changes in staffing, product availability and service based on our findings, Marks & Spencer has been able to drive measurable improvements in conversion, units per transaction and basket size,” said Bill Donald, a manager with Marks & Spencer.
Very interesting! Check out the article.
The Dashboard Spy