The New Retail Metrics: 6 Ways to Measure Success in an Omnichannel World

Most retailers would agree that data and analytics are critical to running a successful business. If you have enough data, you’ll be able to make smarter business decisions, right?

Not quite.

Data and insights are great, but you’ll only get real value out of them if you’re tracking the right things. This is particularly true in the age of omnichannel retail. Traditional metrics such as sales per square foot and individual store performance are still important, but they’re no longer enough to give you a full picture of how your customers are engaging with your brand.

With consumers shopping across physical and digital channels, retailers need to find ways to measure performance in a holistic and omnichannel way.


DOWNLOAD THE INFOGRAPHIC: 6 WAYS TO MEASURE SUCCESS IN AN OMNICHANNEL WORLD

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A continuación te indicamos 6 formas de hacerlo:

1. Measure online sales lift in areas where you have a physical presence

Succeeding in today’s retail environment requires you to stop thinking of your physical stores and ecommerce stores as competing entities. Both channels play a significant role in the consumers’ path to purchase, and they work best when your physical stores are integrated with your digital properties.

A Forbes contributor Steve Dennis points out:

For retailers that put a premium on creating a harmonized experience across channels, e-commerce is a sales channel, but it is also a major complement to the stores, and vice versa. It is therefore not surprising to discover that many brands that have shuttered stores have seen their e-commerce get worse in the trade areas once served by a closed location.

When you’re looking at the performance of your physical stores, be sure to consider their impact on your overall sales. A good way to do this is to measure online sales lift in areas where you have a physical presence.

Let’s say you opened a store or ran an event in London. One thing you could do to measure results is to look at any online sales from consumers in the area. Chances are, you’ll see a strong correlation between ecommerce sales and locations in which you have brick-and-mortar stores.

2. Consider online search lift in trade areas

Physical retail stores, as well as offline initiatives like events, traditional advertising, and pop-ups, can drive brand awareness. A good way to measure the results of your offline efforts is to keep an eye on brand searches from a particular location or trade area.

Use tools such as Google Trends and Google Analytics to measure searches for your brand in places where you have a physical presence.

Consider the example of Brandless, a direct-to-consumer online retailer that sells food, household, and personal care products. In May 2018, Brandless opened a pop-up store in Los Angeles to promote its products, stories, and values.

Using Google Trends, we can see that searches for “Brandless” in Los Angeles spiked in the month of May. That rise in searches is hardly a coincidence. Clearly, Brandless’ pop-up initiative helped drive awareness and search volume in the LA market.

Firstly, omnichannel requires full inventory visibility across multiple channels. If you’re selling on physical and digital channels, see to it that your systems are tightly integrated and can provide real-time updates of stocks.

Doing so will enable you to provide a seamless customer experience as shoppers move from one channel to the next.

Be sure to measure the adoption and results of initiatives that will be useful to consider during the Stock management strategy. These may include:

Customers who buy online pick up in store – If you offer click-and-collect services, closely track the number of shoppers who are taking advantage of the service. Is the number increasing or decreasing over time? What percentage of shoppers prefer click-and-collect versus shipping the product to their homes? Which locations are seeing the most in-store pickups? The answers to these questions will help you refine your strategy of stock replenishment in each channel.

Make sure that you have the right stock if your customers decide to buy on line a product that he has already seen in the store.

There are many times when customers go through the store, but decide not to buy the product to avoid having to go with the package home.
In these cases, the retailer must be able to have product in all its channels, for this:

  • Identify all situations where there is stock in the store that will not be used imminently by the sales forecast (overstock)
  • Identify all products with size breaks in store and web sales forecast
  • Relate “possible service circuits”, that is, stores that can offer their surplus stock to web orders in the country or any other geographical area
  • Establish prioritization rules
  • Generate proposals for stock quantities that can be used to guarantee web orders

Use of mobile app or website in (and out of) the store – Pay attention to the adoption and usage of your mobile app or website. In addition to measuring the number of users, take note of the specific features that people are using, and the role of each feature in the shopping experience.

For instance, when Walmart discovered that 80% of its customers make lists before coming to the store, they made changes to the list-building feature of their app to make the process more convenient. When the company released a handful of mobile app updates in February, Walmart streamlined list-building by adding the functionality to check items at the user’s local store. Walmart also gave users the ability to calculate the cost of their cart even before they step foot inside the shop.

Offer redemption rates per channel – If you promote your offers on different channels (i.e., email, social media, website, etc.) be sure to track redemptions per channel to determine where shoppers are coming from and be sure you have the right product your demand forecast tells you should have.

Let’s say you discover that the majority of shoppers find your offers via email. This insight might prompt you to invest more in email marketing, so you can grow your list and drive sales. And to take case of your aligned stocks reserves of products.

4. Measure the efficiency and ROI of your omnichannel efforts

Aside from customer adoption, it’s important to measure to efficiency and ROI of your initiatives.

For example, if you rolled out a “ship-from-store” service that lets online shoppers order from a nearby store location, then you’ll need to determine the results and ROI you gained out of the service. Depending on your systems and processes, this particular service could yield results in the form of:

  • Lower shipping costs
  • Faster order fulfillment
  • More sales
  • Better inventory accuracy
  • Higher customer satisfaction

By measuring the amount of time saved along with the added revenues that resulted from the initiative, you can you can have a clear idea of what your ROI is.

Perform this exercise for each of your omnichannel programs. Measure your results against the costs of your initiatives to better understand your ROI.

5. Take a closer look at Customer Lifetime Value (LTV)

Measuring LTV allows you to get a better handle on the cost of your sales, marketing, and stock management.

There are many ways to measure customer lifetime value, and the right method or formula will depend on your specific business. Typically though, when measuring LTV, you need to factor in metrics like customer acquisition costs, marketing costs, average order value, purchase frequency, and more.

Figure out the best formula for your business — or better yet, find a solution or platform that can do it for you — then go from there.

6. Measure your Net Promoter Score (NPS)

Figuring out your Net Promoter Score  involves asking your current customers the following question: “On a scale of 0 to 10, how likely is it that you would recommend our organization to a friend or colleague?”

Based on their answers, your customers can be segmented into three groups: Promoters, Passives, and Detractors. To calculate NPS, subtract the percentage of detractors from the percentage of customers who are promoters.

NPS is a great measure of customer satisfaction and loyalty, regardless of the retail channel, so make it a point to track this metric over time and continuously improve.


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