Updated: Nov 22, 2020
The best way to establish important business KPIs is with your POS’s reporting and analytics tools. You need to collect this data manually if you don’t have a POS system. Main data points to track:
● Best selling items
● Worst selling items
● Total sales
● Sales by store (if you run a multi-store business)
● Average sales per employee
● COGS (cost of goods sold)
● Conversion rate
● Inventory turnover rate
Without further ado, here are 6 ways to improve your retails ops.
1. Focus on the Shopping Experience
If you’re a small retailer, it’s quite hard to be competitive where price is concerned. Can you do anything to compete with Amazon? Yes: offer a pleasant in-store shopping experience. Great customer experience can improve brand loyalty and customer acquisition. It’s less costly to keep an existing customer than to acquire a new one. A study by Harvard Business Review shows it can be up to 25 times more expensive to gain a new customer than to keep an existing one. You make it more likely that a customer will keep coming back to your store by prioritizing a welcoming and memorable customer experience.
Customer Acquisition Cost (CAC)
You can use more sophisticated methods to calculate your CAC as you gain experience, such as employee wages, promotion expenses, and the cost of any marketing technology you use. This is a more thorough approach to grasp your CAC. You can reduce your overall CAC through a strong shopping experience. You can start leveraging word of mouth marketing so that acquiring one client leads to acquiring more than one.
If paid marketing is the only way you bring customers to your store, some channels you might use include search engine ads, Facebook Ads, and ads in the local paper. You could be spending around 200 dollars to earn a new customer. This is fine if you are sure each customer will spend at least that amount in your store. Word of mouth marketing can reduce this cost if you offer outstanding service. Imagine that every customer you acquire tells four additional people about your store, one of whom becomes a customer. This means that for every $200, you’re now getting two customers instead of one, thereby reducing your CAC to $100.
2. Improve Customer Experience
Naturally, focusing on shopping experience will lead to improved customer experience. Now, the issue is how to sustain this experience.