Data is a very important assert in the world of retail, store owners face a lot of challenges managing the huge amount of data everyday. Analysing the data properly, you would be able to get a competitive advantage that would boost the sales of your small business. It would help you to track and analyze your customer’s decisions and purchases according to which you can make changes to your products and services. Basically, it would give a direction to your business and be a very powerful tool which would help it to grow. It is equally effective in both small as well as big business houses.
Advantages of retail data analytics
Retail data analytics help the business in a lot of ways, some of that would include:
- Decision making- when you include this tool in your business, you would be able to take a lot of better decisions. The modern solutions enable retailers to dive into data deeply so that they can make much more informed decisions. They can make smarter price decision with the help of price monitoring which enables them to sell products at the right price.
- Workforce- While using data analytics, retail business can increase the level of their efficiency, which would in turn increase their sales and profits. You can determine the best and worst performers in the workforce and train them accordingly.
- Customers- With the help of data analytics, retailers can understand the shopping patterns of the customers in a better way. This would help them to produce the right products and sell them according to the demands of the consumers. One can easily detect trends and patterns of demand with the help of retail data analytics.
What data needs to be analyzed?
Numbers would give you the perfect results each time and would put light on the store performance perfectly. Here we will discuss about three essential analytics metrics that will help you to track the performance of your store in a better way.
- Sales Per Square Foot- This is the average amount of revenue that is earned by per square foot of selling space. This helps in measuring whether you are using your retail space effectively or not. After getting the reports, you can make necessary changes in your space so as to improve its layout. This would help in increasing the sales. You would also be able to stock up those products which are more in demand.
- Retail Conversion Rate- This would imply the number of customers who have purchased products from the store. It helps in understanding what percentage of visitors are actually the buyers. When you have this data in hand, you would be able to understand why all the visitors are not buying from your store. You would also be able to develop the working abilities of your sales employees and set goals for them. You can work on the struggles that sales representatives face and also make periodical goals. You would also need to encourage your salespeople to achieve that goal. You can do that by giving bonuses to those who hit the sales target.
- Net profit margin- This is the percentage of revenue made in per dollar of sales. You would need to consider marketing, payroll and other expenses in order to get the true picture. It would help you in determining the actual profit made at the end of a certain month. This is one of the strongest indicators of the success of your business. In case your net profit margin is low, you would need to make the necessary changes in your and ensure that your minimizing expenditure and increasing profitability.