You’re a retail store manager. What are the most important performance metrics you need to track?

1 Sales revenue

Sales revenue is the amount of money your store generates from selling goods or services to customers. It is the most basic and essential metric of your store's performance. You can track sales revenue by day, week, month, quarter, or year, and compare it to your sales goals, previous periods, or industry benchmarks. You can also break down sales revenue by product category, location, channel, or customer segment to identify which products, areas, or customers are driving your sales.

2 Gross margin

Gross margin is the percentage of sales revenue that remains after deducting the cost of goods sold (COGS). COGS is the amount of money you spend on buying or producing the goods or services you sell. Gross margin measures how efficiently you manage your inventory and pricing. A high gross margin means you have a high profit margin and a low cost structure. You can calculate gross margin by dividing your sales revenue minus COGS by your sales revenue and multiplying by 100. You can also compare your gross margin to your industry average or your competitors to see how you stack up.

3 Conversion rate

Conversion rate is the percentage of visitors or potential customers who complete a desired action, such as making a purchase, signing up for a newsletter, or joining a loyalty program. Conversion rate measures how effectively you attract and persuade customers to buy from you or engage with you. A high conversion rate means you have a strong value proposition, a clear marketing strategy, and a smooth customer journey. You can calculate conversion rate by dividing the number of conversions by the number of visitors or potential customers and multiplying by 100. You can also segment your conversion rate by source, channel, device, or demographic to see which factors influence your conversions.

4 Customer retention rate

Customer retention rate is the percentage of customers who continue to buy from you or interact with you over a given period of time. Customer retention rate measures how loyal and satisfied your customers are with your store, your products, and your service. A high customer retention rate means you have a loyal customer base, a strong brand reputation, and a competitive advantage. You can calculate customer retention rate by dividing the number of customers who stayed with you by the number of customers you had at the beginning of the period and multiplying by 100. You can also track customer retention rate by product category, channel, or customer segment to see which ones retain customers better.

5 Customer feedback

Customer feedback is the information and opinions you collect from your customers about their experience with your store, your products, and your service. Customer feedback measures how happy and satisfied your customers are with your store, your products, and your service. Customer feedback can help you identify what you are doing well, what you need to improve, and what you can do to exceed customer expectations. You can collect customer feedback through various methods, such as surveys, reviews, ratings, testimonials, comments, or social media. You can also analyze customer feedback using metrics such as net promoter score (NPS), customer satisfaction score (CSAT), or customer effort score (CES).