Best-practice Key Figures For Retail Core Processe...

The important role of key figures for companies

Key figures are far more than just simple numbers that quantify the success or failure of a company. In the complex and dynamic world of modern business, they are essential for understanding business performance and ensuring financial stability. Especially for retail companies operating in a highly competitive market, KPIs are invaluable. Not only do they provide insight into a company's financial position, but they also serve as indispensable tools for strategic planning, risk management and decision-making at all levels of management.

In detail, these metrics enable companies to gain deeper insights into their business processes. They help to maximize profitability by uncovering weak points and identifying potential cost savings. At the same time, they enable you in better understanding of customer behavior, which can be a decisive competitive advantage, especially in the retail sector. The ability to interpret this data correctly and translate it into concrete measures can make the difference between success and failure in a highly competitive market.

The selection and application of the right key figures is of crucial importance. It is not just about collecting data, but also analyzing and using it in the right context. This is the only way to make well-founded decisions that stabilize the company in the short term and keep it on course for success in the long term. In the following, we will present a detailed overview of the most important key figures along the various process steps that are essential for sustainable and profitable corporate management.

Key figures in retail: analysis of stationary vs. online retail

In today's digital era, we are witnessing a profound transformation of the retail landscape that goes far beyond the way products are sold. Both department stores and online retail have their own unique challenges and opportunities that are reflected in specific metrics. These metrics are not only indicators of success in each of these two sectors, but also indispensable tools for developing and adapting business strategies that are tailored to the respective market requirements.

In stationary retail, where the focus is on the physical shopping experience, key figures such as space productivity, customer frequency and the conversion rate are of central importance. Floor space productivity indicates how much revenue is generated per square meter of retail space and is a key factor in the profitability of a store. Customer frequency, i.e. the number of visitors who enter the store, provides important insights into how well a location is performing and how effectively marketing campaigns are reaching the target group. Finally, the conversion rate shows what percentage of these visitors make a purchase, which allows conclusions to be drawn about the product range and sales strategy.

On the other side of the spectrum is the online retail, which is characterized by completely different dynamics. Here, key figures such as the bounce rate, the average shopping basket value and the repurchase rate play a prominent role. The bounce rate shows how many visitors leave a website after viewing a single page, which can indicate problems with the user-friendliness or relevance of the offer. The average basket value provides information on how much a customer spends on average when making a purchase, which is an important indicator of the effectiveness of cross-selling and upselling strategies. The rate of repurchase, on the other hand, measures customer loyalty and is crucial for the long-term success of an online retailer.

Another key difference is the way customer loyalty and experience are measured. In department stores, factors such as personal advice and the design of the sales area play an important role in customer satisfaction and loyalty, while in online retail, aspects such as website usability, loading times and the checkout process are crucial. These different focal points are also reflected in the respective key figures and require an adapted approach for each case.

To develop a successful omnichannel strategy that seamlessly links both sales channels, it is essential to understand and harmonize the specific key figures of both worlds. Only through a holistic analysis and a deep understanding of the differences and similarities can companies operate successfully in today's highly fragmented retail landscape and remain competitive in the long term. In the following, we will take a detailed look at the most important key figures of both forms of retail and examine their implications for management.

Insert AI Technology: Machine Learning with ABAP Managed Database Procedure for merchandise management

Optimizing the allocation of goods at the point of sale (POS) has the potential to significantly increase the sales rate. The aim of this measure is to avoid empty stock by distributing goods in line with demand. Not only current stock and sales data, but also planning data is considered in order to ensure precise allocation.

In A/B tests, a potential increase in sales of 11 million euros per year was achieved through a 2% higher sales rate. These impressive results illustrate the significant impact that improved merchandise distribution can have on commercial success.

The technical implementation of this optimization takes place in an SAP BW/HANA system, whereby existing data is used for analysis and training. In particular, the integration of the SAP HANA Predictive Analytics Library and the Automated Predictive Library plays a central role here. These libraries enable a well-founded prediction of requirements and precise planning.

It only takes 12 minutes to calculate the optimum merchandise allocation for around 7,000 points of sale. The results are then transferred to the ERP system, where they are made available for merchandise and assortment planning. The shortened calculation time also enables simulations to be carried out, giving companies the flexibility to run through various scenarios and thus determine the best possible allocation.

This holistic and data-driven approach enables companies not only to optimize their product availability, but also to significantly increase their sales and improve the efficiency of their processes at the same time.