In a time when retail stores are struggling to achieve the sales targets or budgets assigned to them, it can be easy for the team to become disheartened and loose motivation when they see these targets being missed week after week.
Although hitting a sales target is the ultimate goal in terms of sales performance, when this becomes a difficult task, leaders must look for strong performance or results worthy of praise in other areas. This can be found in the Key Performance Indicators (KPI’s) measured in retail.
One such KPI is Average Sale, also referred to as Average Transaction Value, which refers to the average dollar value or spend of customers per transaction. Even though the number of transactions or sales in a store may be low, stores with a higher average sale show the store team are utilising the extra time they have with customers, to build a quality sale. This is through establishing value in higher priced items, with customers benefiting from additional features or a higher quality product.
Items Per Transaction
Average Sale will also increase, if the team are taking the time to understand customers’ wants and needs and recommending additional items to suit. By showing customers products that enhance or compliment their main purchase and ensuring they have the complete solution or package when they leave the store, will reflect in the average number of items sold per transaction.
It’s not only additional products that may be introduced to customers but also the additional services offered by the business. These services may include extended warranties or service plans, which not only benefit the customer in terms of peace of mind but such services commonly have a higher gross profit (GP) for the business. It increases the average spend of customers as well as the bottom line.
While customer traffic may be low, stores can still have a strong conversion rate, or a high closure rate of the customers that do visit the store. By focusing on engaging customers, showing genuine interest in understanding them, building relationships and offering the best solution tailored to their wants and needs, customers are more likely to purchase thereby, increasing conversion. They are also more likely to become a repeat customer when the team provide them with the best experience possible, which important in tough times.
When a team are being recognised for their achievements in a midst of significant challenges and uncertainty, morale is more likely to remain positive. These and other KPI’s can show the leaders of the retail business, that the team are maximising opportunities both for the customer and for the business even during slower periods.