Retail Accounting

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Retail Accounting 101: General Retail Financial KPIs – Part 2

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retail key performance indicators

retail key performance indicators

Many retail outlets can be fooled by the number of people walking through the doors. Staff are looking busy but are they tracking what actually matters? In this article, we have listed some customer centric retail metrics. Average values per customer are easy to calculate and are a good guide to whether or not changes to the store layout are creating an overall increase or decrease in spend per customer. Basket analysis, the use of loyalty programmes, and other CRM techniques are required to further refine the information.

If you have any more suggestions, please include them in the comments below.

  • Customer 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. There are management tools such as the Net Promoter Score which provide context to the score.
  • 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.

Author: retailaccounting

CounterBooks is an online retail accounting management suite which is used by retailers across the world.

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