/ 10 retail KPIs to track using your BI reporting tool

10 retail KPIs to track using your BI reporting tool

As a retailer, it’s important to track key performance indicators (KPIs) in order to gauge the health of your business. By using a BI reporting tool, you can easily see how different areas of your business are performing and identify opportunities for improvement.

There are a number of different KPIs that you can track, but here are 10 of the most important ones for retailers:

1. Sales revenue
2. Average order value
3. Conversion rate
4. Customer acquisition costs
5. Customer lifetime value
6. Churn rate
7. Gross margin
8. Operating expenses
9. Inventory turnover ratio
10. Store traffic counts

In this article, we are going to take a deep dive into each of these 10 retail KPIs. We’ll explain what they are, how to track them with your BI reporting tool, and what kinds of insights you can glean from them.

By the end, you’ll have a better understanding of which KPIs are most important for your business and how to use your BI reporting tool to track them.

 

What is a BI reporting tool?

A business intelligence reporting tool is a software application that enables users to access and analyze data to make better-informed business decisions.

The data can come from a variety of sources, including internal databases, data warehouses, and unstructured data sources such as social media.

A BI reporting tool typically includes a set of predefined reports and visualizations that users can customize to their needs. It may also include features such as self-service data discovery, ad-hoc reporting, and predictive analytics. However, not all BI reporting tools are created equal. Some are more robust than others, and some are more user-friendly.

The best way to determine which BI reporting tool is right for your organization is to evaluate your specific needs and compare the features of different tools.

 

What features of BI reporting tools matter to sales and retail?

The features of BI reporting tools that matter most to sales and retail can be divided into two categories: those that help you understand your customers—and those that help you manage your inventory and operations.

In terms of understanding your customers, the ability to segment your data and create targeted reports is essential. After all, what good is understanding your customer base if you can’t use that information to improve your sales?

As for inventory management, the ability to track sales data in real-time is crucial. As you can imagine, there’s no point in knowing what’s selling well if you can’t adjust your stock levels accordingly.

In short, the features of BI reporting tools that matter most to sales and retail are those that help you understand your customers and manage your inventory. With the right toolset, you’ll be able to make informed decisions that improve both your top and bottom line.

But what specific KPIs should you track? Let’s take a look at 10 of the most important ones:

1. Sales revenue

One of the first KPIs that any retailer should track is sales revenue. This metric tells you how much money your business is bringing in and can be a good indicator of growth.

There are a few different ways to track sales revenue, but the most common is by using a BI reporting tool that connects to your point of sale (POS) system.

This works by automatically pulling data from your POS system every time a sale is made. The data is then stored in a central database where it can be accessed and analyzed.

Another way to track sales revenue is by manually entering data into a spreadsheet or BI reporting tool. This method is less accurate and more time-consuming, but it may be the only option if you don’t have a POS system.

 
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2. Average order value

In addition to sales revenue, another important KPI for retailers is order value. This metric tells you how much money the average customer spends per order.

There are a few different ways to calculate order value, but the most common is by taking the total sales revenue for a period of time and dividing it by the number of orders placed during that same period.

Order value is important because it can be used to track customer loyalty and spending patterns. For example, if you notice that your order values are increasing, it could be a sign that your customers are becoming more loyal.

3. Conversion rate

Conversion rate is the percentage of visitors to your website who take a desired action, such as making a purchase or signing up for a newsletter.

There are a few different ways to calculate theconversion rate, but the most common is by taking the number of people who take the desired action and dividing it by the total number of visitors.

This KPI is critical for ecommerce sellers because it tells you how well your website is converting visitors into customers. If your conversion rate is low, it could be a sign that your website needs to be improved.

4. Customer acquisition costs

Customer acquisition cost (CAC) measures how much a company spends to obtain new customers. Ideally, this metric should be low while the number of new customers is high. This can help you know if your marketing efforts are effective in bringing in new customers, or if the campaigns are not worth the expense.

5. Customer lifetime value

Customer lifetime value (CLV) is a metric that tells you how much money the average customer spends at your store over the course of their lifetime.

There are a few different ways to calculate CLV, but the most common is by taking the total sales revenue for a period of time and dividing it by the number of customers during that same period.

CLV is important because it can help you understand which customers are most valuable to your business. When you can tell that a customer is likely to spend a lot of money over the course of their lifetime, you can make sure to give them the best possible experience.

6. Customer churn rate

Customer churn rate is the percentage of customers who stop doing business with your company over a period of time.

There are a few different ways to calculate customer churn rate, but the most common is by taking the number of customers who cancel their subscription or stop using your service during a given period and dividing it by the total number of customers at the beginning of that period.

To track this in a BI reporting tool, you’ll need to have a way to track customer cancellations or churn. This can be done manually by entering data into a spreadsheet, but it’s more accurate if you use a tool that can automatically track customer cancellations.

 
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7. Gross margin

Gross margin is the difference between the selling price of a product and the cost of goods sold.

To calculate gross margin, you’ll first need to determine your cost of goods sold.

Once you have your cost of goods sold, you can calculate your gross margin by subtracting it from the selling price of your products.

Gross margin is important because it tells you how much profit you’re making on each sale. If your gross margin is too low, it could be a sign that you’re not pricing your products correctly.

8. Operating expenses

Operating expenses are expenses that occur throughout the normal course of business operations. These are different from capital expenditures and should be treated differently.

Operational activities are those that generate revenue in a business. Thus, you’ll want these expenses to be low while keeping revenue generation high.

9. Inventory turnover ratio

Inventory turnover ratio is a measure of how frequently inventory is sold and restocked in a given period. It’s important to understand this metric so that you can ensure you have enough inventory to meet the demands of customers.

10. Store traffic counts

This metric keeps track of the number of visitors who enter and leave a store. This number can be analyzed along with the number of customers who make a purchase versus those who don’t.

By understanding the traffic of your store, you’ll be better able to know where to direct your efforts for improvement. If your store’s traffic count is low, you’ll want to bring in more customers. If traffic is high, you’ll want to focus on getting existing customers to make purchases.

 

The bottom line

These are just a few of the most important KPIs for retail businesses. If you’re not tracking these KPIs, you’re not getting the full picture of your business’s performance.

The key to mastering all of these KPIs is to have the right BI reporting tool. With a BI reporting tool, you can easily track all of your KPIs in one place and see how your business is performing.

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