Every retailer must be tracking some measurable metrics to understand the performance of their business. In this highly competitive business environment, until a measurable KPI is set and strived to achieve. Facial recognition in retail helps in measuring these metrics more smoothly with accurate data.
The Retail Sector is primarily tracking three parameters to evaluate their business
- Sales
- Inventory
- Customer
These metrics help in understanding the customer journey behavior, overall store experience, star products any sort of gap analysis and create strategies to accelerate sales, and a lot more.
Let’s jump in to see why they are important to track.
KPIs
The key performance indicators, or KPIs, are the most crucial measures for any business. The KPIs help you to understand the health of the business as well as adjudge whether the business is growing towards the right direction. Identification of the right KPI is crucial for all stores, but the method of one-size-fits-all cannot be Implemented as every store needs a separate base of KPIs.
Modern-day retailers with the help of technology, and artificial intelligence have better-analysed insights about metrics. Moreover, implementing applications like TORK-facial recognition in retail can also garner major insights regarding customer satisfaction, specific demographics of stores to plan merchandise and many more.
Measuring Retail Metrics
Close monitoring of metrics helps retail stores on multiple levels. A pre-defined metric can monitor, staff performance, Inventory Management, or customer buying pattern.
A well-designed metric analysis helps you find the gaps in metric numbers and helps you make strategies for covering up the gaps for better business performance.
Track performance
Tracking performance is the most important part of any business unit, be it retail or any other. How exactly the pre-set parameters are helping in achieving the goals of retail stores should be thoroughly monitored and checked. In case there is any gap between the planned results and actual, immediate remedial steps should be implemented to bring the business back on track. Efficient and regular tracking of business helps in consistent business growth.
Improve Forecasting
Business forecasting and predictive analysis are vital components of the business. But business forecast does not rely on mere guesswork. Rather, a detailed study of historical sales and trends along with present supply chain management can help stores plan sales and inventory accordingly. Overstocking with contemplation of sales will end up eroding margins and block investments whereas low inventory will lead to loss of sales and customer dissatisfaction. Well-calculated forecasting always results in higher returns.
TORK- the facial recognition-based solution for retail, keeps you well prepared for this analysis. TORK dashboards equipped with historical data help you envisage data-backed future scenarios and take buying or merchandising decisions accurately
Retail Metrics and KPIs
More sales mean more growth with the expansion of business. But apart from sales metrics, it is also important to measure the processes involved in achieving so. Streamlining the store operations along with KPIs creates a healthy business environment in the long run.
The ‘MUST’ KPIs every retail store and professional must have a detailed idea about.
Conversion rate
The primary bottom line of business, is how many converted? That is, of all the visitors or footfall you received throughout the day, how many of them purchased from the store? The higher the rate of conversion, the better your business performance.
The conversion rate is the ratio of customers who visited the store to those who made a purchase.
For example, if 100 people walked inside a retail store, and 40 people purchased items then conversion rate for the store is 40%
The Formula tracking Conversion is :
(Total Number of Invoices) / (Total Number of Footfalls) * 100
Customer Metrics
Footfall Traffic
It’s essential for every retailer to diligently monitor a fundamental metric known as “visitor count.” This data provides insights into what’s effective and what needs improvement, whether it’s during the holiday shopping season, after opening a new store location, implementing a new display window design, or launching a loyalty program. Understanding foot traffic is crucial, as it helps retailers determine if these efforts are translating into revenue generation for the company.
With the help of TORK- facial recognition in retail technology, you can track footfall data quite easily without any manual intervention.
Loyal Customer Visits
It is an old proven fact that 80% of the business comes from 20% of the customers. Customer retention shows how much of repeat customers or rather loyal customers you have been receiving within the store for a regular purchase. This in other way implies customers are indeed loving your collections and store and making an effort to come back to you for purchase. In general practice, track of loyal customers is kept through their phone numbers, taken during billing.
TORK-Retail, as it employs a secured facial recognition technology for retail, help you get alerts the moment any regular or loyal customer visits your store.
Inventory Metrics
Gross margins return on investment (GMROI)
GMROI calculates your return on investment (ROI) based on the amount invested in merchandise. This KPI helps retailers understand, the amount received or recovered against the amount of money invested. GMROI helps to understand the profitability of the retail store.
GMROI helps to understand the in-depth viability of the business health. This, above general profit and loss, creates a picture elaborating business profitability in the long run.
Learn how TORK can help you in better merchandising decisions.
Shrinkage
When the inventory of a store reduces without any sale, it is termed Shrinkage. There could be several reasons for a store’s stock shrinkage- shoplifting, employee theft, or wrong posting of data while receiving or dispatching stocks. Controlling shrinkage is a primary responsibility of store personnel, as the high rate of shrinkage percentage ends up eating the profit margin of a store. Management of the shrinkage percentage of the store shows how effectively the control mechanism is in place to stop shrinkage.
TORK can help you create alerts for any suspicious activity inside the store. These alerts will create a safe environment against any shrinkage or shoplifting activity
Conclusion
These KPIs should be able to get your retail business off to a good start and help you monitor its expansion. Find out more about KPIs for successful marketing campaigns and sales teams if you need assistance attracting customers or converting them into sales. Are you ready to start analyzing your store’s data to set the right goals for your business? Learn how data and analytics are transforming the retail sector.
