4 Tips: Using Retail Metrics to Drive Store Performance

The old saying that “retail is theater” certainly rings true—whether you’re merchandising a window display to tell a brand story, or hosting a customer event, retail requires creativity, improvisation, and the ability to think quickly on your feet.

At the same time, over my 10+ years as a retail store manager, I came to appreciate that retail management is equal parts art and science. While we don’t usually think of store managers as data analysts, that’s often a core piece of the job. Store managers are called upon to decipher patterns in store data—from traffic to conversion to average order size to sales by category—to inform corporate decision making on product assortment, staffing, payroll, performance assessments, the list goes on.

I found that this aspect of the role could be a challenge for some store leaders, most of whom entered retail based on their love of people and product, more so than their affinity for Excel spreadsheets. I admit, particularly in my early days as a store manager, I struggled to sift through reporting databases. At times I felt as if I was drowning in data, attempting to make sense of a sea of numbers without a clear idea of the “so what” or the implications of the dizzying array of metrics.

A pivotal moment in my career was when I learned to harness the power of data to improve the performance of my team—and delight customers in the process.

With that in mind, I wanted to share some key pointers I learned about applying data to store management, with the hope that they’ll benefit other store leaders as much as they helped me.

1. Empower your store team by managing toward data-driven goals.

You can tell your team members to “get out there and crush it” or “to give every visitor a great experience” – but what exactly does that mean? I found that sharing data-driven goals with my staff was far more effective than offering them generalities or platitudes. Everyone wants to be part of a winning team, and the first step is knowing what your goal is and what success looks like.

That goal post might vary according to your business model and your brand. Perhaps it’s sales per hour, or conversion, or NPS. The specific metric isn’t as critical as simply having a goal and managing toward it.

Everyone can see the impact they have on the store’s performance—in tangible numbers rather than just anecdotes. And with individual or team metrics (depending on your sales attribution structure), you can foster some healthy competition among your team members, within your district, and across the entire chain.

 

2. Always keep customer experience metrics top of mind.

Hitting your sales goal is always going to be a priority; however, store performance ultimately hinges on customer experience. If store visitors are met with helpful, engaged associates who guide them to solutions that meet their needs, the sales will follow.

The key metric that helped me gauge the quality of customer experience in my stores was the yield on customer traffic (total sales/total visits).

Did my team notice every customer that entered the store and identify their needs? Did they build solutions and provide product expertise? I’d notice that in Yield.

Just as importantly, the Yield figure told me how well my team did with the factors under their control. Store traffic is often outside the control of the store team, subject to the whims of weather, street closures, power outages, promotions, and so on. Taking a look at Yield shows what your store accomplished with the traffic it got—and how your staff maximized that opportunity.

 

3. Identify risks ahead of time so you can course correct.

Recognizing patterns in past performance can help avert crises on the horizon.

Conversion has been below average on Tuesdays from 6-7PM over the last three weeks? With that risk in mind, I’d take a closer look how I’m using my team. Perhaps I needed more sellers on the floor during that peak traffic hour, or better support at the register to ensure lines weren’t driving shoppers away empty-handed.

The critical piece is to make sure you’re continually surfacing insights, so you can avoid issues before they arise.

  

4. Use data to ensure you have the right people in the right place—at the right time.

Hiring great store associates is only the first step in assembling a great store team. Assigning your people to their “highest and best use” is another crucial step, and one that’s more challenging that you might suspect.

It’s Thursday morning, and I know I’m receiving 50 boxes later today that will need to be unpacked, tagged, and entered into our system. Jeff is a rock star when it comes to inventory; he’s detail-oriented, quick, and a master with all things product related. At the same time, he might be precisely the wrong person to handle inventory on this particular day.

If we’re expecting high traffic from 2-4PM, we need our best sales associates on the floor during that critical window. Checking each team member’s selling stats over the last 3 weeks, I’d select those with the highest conversion and basket size performance, including Jeff, to be on the floor during that shift—and I’d place a lower-performing associate in the back to handle the shipment. They might be slower and less facile than Jeff with our inventory system, but my priority is making the most of the traffic coming in the door and I know I can support them in between high traffic periods.

Jeff, like most “rock star” store employees, would excel at any task I gave him. It was my job to look at the data before me to determine where he could make the greatest impact on the business.

Using objective metrics on individual strengths and areas of growth, coupled with hour-by-hour forecasts on the traffic and selling opportunity facing the store, I could position my team to make the most of every shift.

 

Becoming That Store Manager

Most people who enter store management love the “theater” of retail and embrace their various roles as director, stage manager, house manager, and actor. Their role as data analyst, however, can be more of a challenge. With the right tools at their disposal, using data the *right* way can elevate any store manager’s performance.

By |2018-07-31T14:03:02+00:00July 31, 2018|