Data is the key for any retailer today and thanks to the rapid technological advancements, we can measure every aspect of our merchandising strategy, understand our customers thoroughly and offer the best service to them.
In todays post, let us try and understand some of the key metrics that are required for evaluating the performance of our merchandising strategy.
KPIs to measure the performance of your Merchandising strategy
Here are fourimportant key performance indicators that merchandisers can use to evaluate the performance of their merchandising strategies:
Rate of Conversion
The rate of conversion is a factor that tells us the number of visitors who ended up becoming customers. Good photography, strategic product arrangements, cross selling and upselling all these help to improve the rate of conversion.
At times when the store is recording low conversion rates, visual merchandisers can look for at the Cart Abandonment rate. This measure tells us the number of users who add products to their shopping cart and leave the site without making a purchase. This is an indicator for improving the overall user experience.
Customer Lifetime Value (CLV)
The customer lifetime value or CLV refers to the monetary value of the relationship of the customer with the store. This value is computed based on the present value of the projected cash flows from the customer. This is an important measure as it encourages companies to focus more building a brand and devising strategies that encouragecustomer loyalty for a longer period of time.
Cost of acquiring a new customer (CAC)
As the name suggests, this measure tells us about the amount spent on various marketing channels for acquiring one new customers. This metric helps us to take a call on retaining existing customers vs acquiring new customers.