GITNUX MARKETDATA REPORT 2023

Must-Know Merchandising Kpis [Latest Report]

Last Updated: October 31, 2023

Written & Summarized by: Jannik Lindner

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Highlights: The Most Important Merchandising Kpis

1. Gross Margin
2. Sell-through Rate
3. Inventory Turnover
4. Stock Cover
5. Out-of-Stock Rate
6. Days of Inventory
7. Markdown Percentage
8. Average Transaction Value (ATV)
9. Sales per Square Foot
10. Category Sales Performance
11. Sales per SKU
12. Return Rate
13. Conversion Rate

Merchandising Kpis: Our Guide

Dive into the world of retail analytics with our latest blog post focused on the must-know Merchandising KPIs. Equip your business for success by understanding and monitoring these crucial metrics, driving profitability and performance. Stay ahead of the curve, harnessing the power of today’s data-driven retail landscape with insights from our comprehensive report.

Gross Margin

This KPI measures the profitability of your merchandising activities.

Sell-Through Rate

Sell-through rate measures the percentage of units sold in relation to the initial stock inventory within a specific period.

Inventory Turnover

This ratio measures how many times a retailer sells and replaces its entire inventory during a specific period.

Stock Cover

Stock cover measures how long the current inventory will last based on the average sales rate.

Out-Of-Stock Rate

This KPI measures the percentage of occasions when a customer request for an item cannot be fulfilled due to its unavailability.

Days Of Inventory

This indicator measures the average number of days that inventory is held before being sold.

Markdown Percentage

This KPI measures the percentage of the initial retail price reduced to sell the items in clearance or on discounts.

Average Transaction Value

ATV measures the average spending of a customer during a single transaction.

Sales Per Square Foot

This KPI measures the revenue generated for every square foot of retail space.

Category Sales Performance

This indicator measures the sales performance of individual categories (e.g., apparel, electronics, etc.) within the store.

Sales Per SKU

The KPI measures the average revenue generated by each product within the inventory range.

Return Rate

Return rate measures the percentage of products returned by customers compared to the total products sold.

Conversion Rate

This KPI measures the ratio between the total number of store visitors and actual purchasers.

Frequently Asked Questions

What are Merchandising Key Performance Indicators (KPIs)?

Merchandising KPIs are specific, measurable values that help businesses analyze their product display, promotion, and sales efforts, to make informed decisions, optimize performance, and achieve their merchandising goals.

Which Merchandising KPIs are essential for a retail business to track?

Important Merchandising KPIs include sell-through rate, stock turnover, gross margin, sales per square foot, and average transaction value. Monitoring these KPIs helps businesses improve product assortment, allocate retail space efficiently, and enhance profitability.

How can sell-through rate help in evaluating merchandising efforts?

Sell-through rate is a critical KPI that represents the percentage of inventory sold within a specific period. It helps businesses evaluate the effectiveness of their product assortments, display strategies, and pricing methods. A high sell-through rate indicates strong demand and effective merchandising, while a low rate may suggest the need for adjustments in pricing, assortment, or display tactics.

What is sales per square foot and why is it essential to track?

Sales per square foot is a KPI that measures the average revenue generated for every square foot of retail space occupied by a business. This metric is crucial for understanding and optimizing store layouts, product placements, and overall store performance. A higher sales per square foot value implies efficient use of retail space and effective merchandising efforts.

How does tracking gross margin contribute to an effective merchandising strategy?

Gross margin is a KPI that represents the difference between sales revenue and the cost of goods sold, expressed as a percentage of sales revenue. Monitoring gross margin helps businesses evaluate their pricing strategies, promotional effectiveness, and assortment planning. A higher gross margin indicates that a company is effectively managing its costs and pricing, resulting in profitability and improved merchandising performance.

How we write these articles

We have not conducted any studies ourselves. Our article provides a summary of all the statistics and studies available at the time of writing. We are solely presenting a summary, not expressing our own opinion. We have collected all statistics within our internal database. In some cases, we use Artificial Intelligence for formulating the statistics. The articles are updated regularly. See our Editorial Guidelines.

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