Edge in Competition

The concept of productivity management is essential in the retail business. However, retail stores have unique characteristics. Thereby, it is impossible to just adopt retail indicators used by other stores. You have to know your own purpose why you would want to measure productivity. If you know your reasons, then you know how you would measure productivity. When you have measured what you intend to measure, then you will know the necessary actions that you have to undertake.

More common among these indicators would include those related with sales, such as turnovers and transactions; loss prevention, like stock loss and cash loss; matters related to operations, like availability of stocks, and the reliability of inventory, salaries, service, and several others. It may also be relevant to include as indicators those matters that pertain to human resources and the variable costs in order to determine which among the expenses may be avoided.

Owning, much less managing a retail business, is not an easy task, especially with the current economic situation and stiff competition. There are a number of aspects that should be dealt with day after day as long as the business exists, which all have considerable effects on the success of the business. KPIs can also help shed light on how sales revenues, especially if they are insufficient, can be improved.

Of course, you should also be prepared to implement measures that would guarantee improvement in the performance in the business as a result of the application of KPIs. Also, you should expect that this course of action will definitely affect the employees in several ways, particularly in how they perform, and hence, you need to be prepared, as well as the employees themselves would need to be prepared. After all, the purpose in doing this is to make the business more competitive.

These indicators provide the metrics you use as basis in the decisions you have to make regarding the entire operation of the business. Remember that in the business, as is elsewhere, whatever that can be measured can be improved. And if a business is constantly improving, one can just imagine how successful it could become.

Business conditions are constantly changing. Therefore, it is necessary that we are prepared and equipped when changes have to be made, as well as to adjust present plans and future ones in order to remain competitive in the market, if not gain an edge over the competition.

There is more to the retail business beyond the purchase of goods, adding your markup, and then selling them to consumers. The purpose of employing indicators is for you to be provided with the necessary information that would assist you in analyzing your entire operation, to be able to identify problem areas, and to take corrective measures to prevent the problem from getting out of hand. And if you decide to use retail indicators, which we highly recommend you must, you have to use them in order to benefit from them. Their purpose after all, is to help you do what you have to do when you have to do it. Make sure the indicators you use do not contradict each other. Rather, they have to be able to unify your operations towards the right direction, and that is gaining more profit instead of losing more.