Sometimes it may sound like KPIs are dashboard tools used by high-level financial institutions and management advice, not clothing retailers. Although these metrics help these industries, almost any workplace can see value in them if they know what they are using for themselves. From estimating stock revenue to targeting order sizes, here are some of the top reasons why clothing retailers can benefit from KPIs.
Establishing profit marks
Some of the best CFO KPIs available from clothing retailers and the textile industry are those that allow you to establish profit margins. Profit margins on each line of your product are important in determining the profit you want. Seeing this measurable data also allows you to calculate the appropriate marker for the product while also maintaining a profit and competitive rating.
Managing stock levels
Many clothing retailers are having to figure out how much they can afford to buy something. You don’t want to risk too much order, but you also don’t want to risk too much and commit to your operating costs. Finding balance is important, but not all traders know-how. This is where the KPIs come in. If you can measure how certain product lines sell, you can predict the selling power of other lines. Over time, you will gain confidence in measuring how well your seasonal lines work, which can allow you to predict your operating costs.
Managing the shopper at staff ratios
Building a staff roster is not a favorite job of a clothing retailer, even if it is necessary. To make matters worse is the risk that you may be under staff or overuse of each working shift. While you can never accurately predict how busy each day will be, KPIs can go a long way in establishing patterns.
These metrics allow you to work out your shopper-to-staff ratio to ensure that profits remain high. With this information, you can decide if you need a few sales staff, multiple vendors, or targeted and sales promotion incentives.
Evaluating your profits
One of the most common metrics for business owners is looking at annual growth. This KPI can determine if you are growing, and if so, which channels provide this growth. Revenue analysis can also help to determine which parts of your business need to be invested in and whether new production facilities are worth exploring.
Identify order sizes
Just by looking at the statistics at the end of the working day, it can sometimes be difficult to determine how large each customer’s order was. All you see is numbers, and it could mean buying a lot of small items, or one big thing.
However, it does not have to be a guess. KPIs allow you to measure the standard order size on your website to get a point of sale price. With this information, you can determine what people are willing to spend and how effective your product promotion is.
Many parts of your business may need to be guessed, but that doesn’t have to be everything. You may be surprised to find out how many features of your business are measurable using KPI dashboards and CFOs with readable metrics.