Key Performance Indicators in Retail

S h i S h 16 Jun 2008 7:10 PM 

0 Store Managers, District Managers and HQ can benefit greatly from reacting to business

conditions on the fly. They need to be aware of changing business conditions and be able to

see how the business is reacting, understand what changes need to be made, and adjust

plans and forecasts to meet new challenges and opportunities. 

Microsoft Office PerformancePoint Server 2007, is a single application built to enable the

complete performance management cycle by bringing together three core performance

management capabilities: monitoring, analytics, and planning. 

Monitoring : Easily see what is happening now in your organization, measure against your

objectives, and understand how your actions impact corporate goals. 

Analytics : Quickly discover what is driving performance and look at what adjustments you

might make to take advantage of new opportunities. 

Planning: Efficiently build budgets, forecasts, and plans in the interface everyone knows—

Microsoft Office Excel. PerformancePoint Server 2007 offers auditing capability, centralized

control, enhanced security, and the proven data platform of Microsoft SQL Server 2005.

Monitoring and measuring performance results are key functions of any successful Retailer.

Office PerformancePoint Server 2007 enables business users to define and use scorecards

and key performance indicators (KPIs) to drive accountability and alignment across the

organization.

Rich visualization and up-to-date performance dashboards and scorecards help business

users align their actions with strategic goals.

Some retail KPIs are listed below. Look for a complete list of Retail KPIs at http://www.nrf-

arts.org 

Retail Customer KPIsCustomer Gross Profit Customer GROSS Profit = Customer Sales - Customer Cost

of Goods Sold for a period

Customer Lifetime Purchase Value Monetary value of each customer's life time purchases from the retailer

Customer profitability Customer Profitability = Customer Sales - (Customer Returns - Customer Cost of Goods Sold + Customer Promotion Expenses + Activity Based Cost of Servicing Customer) for a period

Customer Purchase Freq Count Count of customer purchases transactions over a period of time

Customer Purchase Value Monetary value of each customer purchase during a period with an average value for all purchases for the period

Customer Reference question A rating from 0 to 10 that indicates if the customer would recommend the store.

Customer Sales by Segment This formula is dependent upon defining customer segments (based on age, education, lifestyle, income and other factors) and associating individual customers to specific segments.

Customer Service Staffing Face to face customer service staff count / total staff count

Visit to Buy Ratio Sales Transaction Count per period / Visit Count Per Period

   

Retail Financial KPIs  

   Accounts Payable Turnover Avg Accts Payable / (Cost of Sales / 365)

Accounts Receivable Turnover Days

Avg Accts Rec / (Credit Sales/365)

Acid Test Ratio (Current Assets - Inventory)/Current Liabilities

Admin Cost % (Administration Costs / Sales )*100

Average Inventory (Beginning of Period Inventory + End of Period Inventory)/2

Break-even ($) Fixed Costs / Gross Margin Percentage

Cash Conversion Cycle Days Inventory Outstanding + Days Sales Outstanding + Days Payable Outstanding

Contribution Margin Total Sales - Variable Costs

Cost of Goods Retail Price - Markup

Cost of Goods Sold Beginning Inventory + Purchases - Ending Inventory

Current Ratio Current Assets / Current Liabilities

Ending Inventory At Retail Beginning Inventory - (Sales + Transfers out + Return to Vendor + Markdowns + Employee Discounts + Shrinkage) + (Purchases + returns from Customers + Transfers In + Markups)

Gross Margin Total Sales - Cost of Goods

Gross Margin Return On Investment Gross Margin $ / Average Inventory Cost

Initial Markup (Expenses + Reductions+Profit)/(Net Sales +Reductions)

Interest Cost% (Interest Costs / Sales)*100

Inventory Turnover Net Sales / Average Inventory

Maintained Markup $ (Original Retail - Reductions) - Cost of Goods Sold

Margin % (Retail Price - Cost) / Retail Price

Markup % Markup Amount / Retail Price

Net Receipts (Purchases + Transfers in + Returns from Customers + Overages) - (Transfers Out + Return to Vendors)

Net Sales Gross Sales - Returns and allowances

Retail Price Cost of Goods + Markup

Return on Capital Invested (Profit for the Year / Capital Employed)*100

Sales per Square Foot Sales per square foot = Total Net Sales / Squarefoot of selling Space

Stock Turnover Days Average Inventory / (Cost of Sales /365) number of days

Total Asset Sales Ratio Sales / Total Assets

Turnover Total $ Sales for season / Average $ Inventory for season