“If you can’t measure it, you can’t manage it.”
This phrase pops up a lot in writing on KPIs. And is usually misattributed, but that’s another story. Despite its uncertain origins, those nine words perfectly capture the essence of KPIs.
It’s why they've have become transformative for data-driven growth strategies – in theory anyway. Because identifying the right ones, and then measuring them long term, is easier said than done.
At tamigo, KPIs have been a part of our solution since we started back in 2006. And we’ve helped a lot of businesses use theirs successfully. That includes enterprise retailers, looking to edge ahead in a competitive sector.
In this article, we’ll take a look at relevant KPIs for retail businesses. And how a solution like tamigo can help you measure them.
It’s worth defining KPIs because they’re so often confused with goals.
Goal: A high-level business objective, typically set by management. For example: ‘Grow overall revenue by 10% this year’.
KPI (Key Performance Indicator): A measurable value that tracks progress towards your goal. It needs to be quantifiable and objective. For example: ‘Sales per Employee’.
Every department or employee within a company can have their own set of KPIs. It’s then their responsibility to own them — monitoring and taking action to improve their quality if needed.
It’s worth noting that KPIs are useful for all kinds of businesses processes. Sales is far from the only one. Within our solution, we have numerous categories. These include efficiency and optimisation, cost control, and HR management.
Supermarkets, clothes shops, department stores. Retail is far from homogenous, and each business will have its own way of measuring success. But there are some core KPIs which always prove useful.
We’ve worked with enterprise-size retailers across Europe, helping them optimise their workforce management. Here are the KPIs for retail we recommend they focus on.
Sales generated per productive hour.
This KPI gives a clear view of staff performance during those times when they’re actively generating sales (e.g. giving great customer service as opposed to stocking shelves). Training, better communication and good employee engagement all help to make productive hours even more productive.
The number of unproductive hours compared to total hours.
Unproductive hours includes things like administrative time for managers. Or when staff are restocking shelves or cleaning. Having employees tied up in these tasks can lead to your retail stores feeling understaffed. To learn how data and communication can help, check out our How to deal with understaffing in retail article.
Sales generated per all hours (both productive & unproductive).
This grants you an overview of stores’ peak hours. It helps managers schedule staff more efficiently to cover your busiest (and slowest) periods.
Number of leavers compared to working employees.
If employee turnover is higher in one of your stores than another, then it could be the manager needs more support or training. Or it’s time to turn a critical eye to your onboarding and development programs.
Staff costs based on hours and wage rates.
This is always a significant chunk of retail operating budgets. Especially when overtime comes in to play. A smarter, automated way solution for shift planning could be an option. Learn how design brand Bolia tackled their labour costs using tamigo.
Amount of labour costs compared to revenue.
A wage percentage that’s trending upwards signals a decrease in staff productivity. Boosting employee engagement is one of the first actions to consider.
Number of absence hours compared to all hours.
Retail workforces recording a lot of no-shows are likely burnt-out or de-motivated. It might also be caused by inefficient timekeeping (e.g. staff forgetting to clock in).
Once you’ve settled on your KPIs of choice, there’s a few more hurdles to clear. Here's some frustrations you can face:
Overcoming the challenges of KPIs begins with the systems you use. A workforce management (WFM) software brings these important metrics into sharper focus.
In tamigo, KPIs are:
If you’re already a tamigo user, you can learn more about KPIs for retail in our Help Centre.
Not a tamigo user yet? A free demo is a great way to get started. One of our specialists will guide you through the platform and discuss which KPIs are most relevant for your retail business. Book your free demo here.