Know how to interpret your Retail KPI’s?
When thinking about retail management training, one subject comes to mind as being the one so many retail management people steer clear of. That’s retail math.
Retail math is really not anywhere near as complicated as many would think. It is a component of retail management training programs because it needs to be, to some degree at least.
Key Performance Indicators, or KPI’s as they are most often referred to, are absolutely crucial for any business. Retail is no different.
The level of retail math knowledge required differs for all levels of the organization. Although Store Managers generally are not required to get involved in buying or inventory allocation or budgeting, etc. it is still a good idea for them to have a basis for understanding.
Store Managers would be most interested in the retail math that is applied at store level. Just to determine how they are doing against prior years and against targets, they need to know how to do the simplest of calculations. Add to that the need to determine how each of their employees is doing compared to targets the company has set in different areas, and the Store Manager needs to understand a bit more retail math.
Remember, if you can’t measure it you can’t manage it. And, going one step further, if you don’t know exactly how you are measuring it and how to interpret the results…you still can’t manage it.
Even the Store Manager who only needs to understand sales, wage cost, average sale and conversion to list a few of the more common ones, a level of understanding is required.
Retail math, as part of the retail management training process, is an exciting part of the whole picture. Gaining an understanding of retail math lets the Store Manager put everything in perspective. Once competent in making all of the calculations for KPI’s pertinent to his/her store, the Store Manager gains new insight into exactly what is going on in their store. It’s like having the blindfold removed. Suddenly, everything makes sense.
And that is the starting point for watching those KPI’s improve. Just knowing all of the components makes it easy to see what needs to be improved upon. The Store Manager who knows some retail math will be able to focus on certain measureables and interpret results much more easily.
If you haven’t done so already, make a point of learning some retail math. DMSRetail has just the right success guide for you: Retail Math Made Simple
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