It’s quickly becoming a new year and the retail space is changing faster than ever. This article will explore what three KPIs retailers need to keep in mind as we enter 2022.
1. Total Transactions (AT)
A retail store’s success is largely determined by how many transactions they’re doing per day. Retailers need to know how they rank compared to the industry and what they can do to bring their numbers up if necessary. For example, if a store’s total transactions are below the average, it may mean that the displays are not attractive enough, that there’s too much clutter on the floor, or that there isn’t an ample supply of fitting rooms available for customers.
The first step would be to try removing some of the clutter from your store. Implementing an in-store heatmap solution like Alertiee Sense allows retailers to gain access to a wealth of data about customer movement throughout their locations. Based on this data they can make judgments about which products draw the most attention and which draw the least. Removing or relocating uninteresting products will open the space up and help customers find the products they want.
2. Average Transaction Value (ATV)
As previously mentioned, the number of transactions a store does is vital to its success. However, it’s just as important that every one of these transactions’ counts.
Average transaction value (ATV) is exactly what it sounds like – how much money an average transaction brings in. It’s calculated by dividing the total sales by the number of transactions or visits. If your ATV is below an industry standard, you need to figure out why because it could be a sign that something needs to change.
While many factors can impact ATV, there are several ways retailers can try to improve it:
- Understand who your customers are and what they want from your store. Using a customer attribute detection system like Alertiee Mind allows retailers to gain detailed insights into their customers and their needs. This allows them to tailor their in-store experience towards encouraging customers to spend.
- Encourage sales staff to upsell and cross-sell. Customers that enter a store for one product are more likely to purchase an additional item if they are suggested. Retraining your sales staff to upsell is a highly effective way of increasing ATV.
- Adopt a store layout that leads to impulse buys. Creating store heatmaps allows retailers to get a sense of which products and sections of their store are being underutilized. Designing a store layout that makes it easy for customers to explore will increase the likelihood of impulse buys.
3. Conversion Rate (CR)
The conversion rate is another particularly important KPI that determines how many people are actually making purchases in your store. It’s not just about getting more customers through the door; retailers need to have a high conversion rate as well. The average conversion rate for brick-and-mortar retailers is between 20% and 40%, which means that for every 100 people that enter a location, 20 to 40 make a purchase. If your location is falling below this benchmark, changes need to be made.
These might include:
- Staff the location according to traffic not sales. Using a computer vision system like Alertiee Sense, retailers can benefit from 24/7 in-store traffic data. This allows them to schedule more staff for times when there are peaks in traffic, thus increasing the likelihood of fast service and more conversions.
- Hide the queue. When the first thing customers see as they walk into a location is a queue, there’s a possibility that they turn around and leave. Hiding your queue allows people to develop attachments to products without worrying about waiting times.
- Use scarcity to your advantage. Scarcity is a powerful tool. By not displaying all your most popular items or by announcing a limited-time offer, many customers will decide to buy out of fear of missing out.
The three KPI’s above are what businesses around the country are focusing on as we move towards 2022. These KPIs are great predictors of overall success in retail and keeping track of them is a must. The best way to do that is by adopting smart technologies that track, record, and organise the necessary for you.
If you enjoyed this post: 3 Key KPIs For Retail Stores In 2022, be sure to check out our recent IoT and AI pilot with Adnams here: AI and IoT for retailers how physical stores can enhance customer experience
Proven benefits of Alertiee technology
Alertiee will help you realise missing sales opportunities, stores’ performance based on conversion rate, and stores’ sales hotspots areas.
We support and guide you through how you best convert both inside and outside traffic opportunities by supplying you with options around service risks and how to serve your existing and potential new customers best.
Alertiee will help you to provide a harmonious customer experience across your omnichannel business. Our technology enables customer experience, marketing and retail teams to close the gap between customers’ digital experience and their physical experience.