As a retail store owner in the fashion industry in the UAE, understanding your brand’s performance is really important for the growth and success – and even more so considering the competitive landscape of Dubai and UAE in general. Keeping track of the right metrics can provide you with the much needed insights that can help take your brand to the next level. It will also help you identify your areas for improvement.

In this blog, I am going to discuss a few metrics that every retail store in Dubai / UAE must monitor and look to explore different ways of improving.
Let’s dive right into it.

Top 5 Metrics Your POS Software Must Provide You

1. Sales Performance

Sales performance is one of the most important metrics that you need to track and monitor but I’m sure you’re already aware of this. What I would like to emphasize is the system that you have in place and its capabilities. A lot of the time, due to system limitations a retailer cannot get enough number of details regarding their brand.

Here are some absolute must haves, daily/weekly/monthly sales reports, specific product sales reports, category sales report, sales by employees/location/branch, discount & promotion reports, Sales forecast report, refund/return reports, Sales comparison report – This list could go on very long. If your system does not provide you with any and every report that you’re looking for, you’re already a step behind your competitors. Hulexo POS has a comprehensive list of reports that can be not only generated at will, but also scheduled to be in your inbox every morning giving you that edge you need to make the right decision. You can read more about Hulexo POS software reporting capabilities here.

By having these reports, you can identify what is working and what needs to be changed. A quick example would be that if an item does not sell well, you can promote it or change instore location to make it more visible to customers, ultimately driving more foot traffic. But you can’t do that if you don’t have data that tells you this specific item has had a shelf life of 1 year. This takes me to my second point.

2. Inventory Turnover Ratio

This measures the pace and efficiency of your inventory flow. In more simpler terms, “How long it takes you to sell off your inventory”. A high inventory turnover ratio indicates that your merchandise is in high demand and is selling out quickly. Whereas a low turnover ratio refers to slow moving items. This not only impacts your profits but also takes up valuable space in your store. You got to keep the inventory moving. You get a 100% transparent view on your inventory in the Hulexo POS system inventory management module – feel free to read a bit more on that here.

A good ratio generically in the retail business is 2-4x, this means that your inventory has turned over 2 to 4 times in said duration.

However, keep in mind that an inventory turnover ratio does not show you the complete picture. A high inventory turnover ratio that is driven by low margins is not necessarily the most profitable. When seeking profitability, it is a well known fact that it cost about 5x more to acquire a new customer than to retain an already existing one. Moving me to the next metric.

3. Customer Retention Rate

A Customer Retention Rate (CRR) simply measures how many customers return to your store over a specific period, this period varies from business to business. Some measure over 3 months, whereas some could measure over a year.

A high retention rate does not only mean that customers are loving your products but there is a very high likelihood that they will unknowingly become your brand advocates – driving more foot traffic – more sales – more profits and finally more credibility.

Some brands use certain tactics to increase their customer retention. One of the most promising options is loyalty points. As a retailer if you’re seeking to add a loyalty point system to your solution, the cost of customizations could increase significantly and set you back. However, Hulexo Retail POS software has this as a built in function ready to use.

4. Average Transaction Value (ATV)

This is the measure of the average amount a customer spends on one transaction. This is a great way to help you track the effectiveness of seasonal promotions and different pricing strategies. Tracking the ATV is fairly simple – Total revenue divided by the number of transactions.

Keeping track of your ATV can give you a better understanding on your revenue growth, better customer insights and put you in the driving seat for your next set of marketing efforts.

A super simple way of increasing your ATV is encouraging your staff to upsell or cross sell, building items together or using a loyalty point system. Most POS Solutions lack the loyalty feature or can have very high costs for customization of that module. In Hulexo POS system, not only can we show you your ATV with one click, but we also have the loyalty feature built right in and ready to use from day one.

5. Conversion Rate

Conversion rate is by far one of the MOST important metric that every brand in every industry measures. This measures how many customers purchased vs how many walked into the store.

The reason this metric is one of the most important is because it tell you how effective your store layout, your merchandising, your store vibe and finally your sales staff is at providing value to your potential customers. I say value but it’s more commonly known as convincing. A low conversion rate indicates a need to improve your in store experience along with the need to attracted the right target audience via your marketing and promotional campaigns.

There are a lot of devices out there that can measure foot traffic for your store. Ideally these are small cameras or sensors that are placed towards the entrance of your store that monitor how many people walk in and out of your store. Here is our recommendation if you’re a small store still looking to scale. – Footfallcam

In this super competitive UAE retail industry, keeping track and monitoring your performance can play a deciding factor in driving foot traffic, or in increasing sales. By simply tracking the metrics mentioned above, you will already be in a good place to grow. This will help you to improve areas that need improvement and optimize existing campaigns.

If your system does not provide with you these detailed insights, I would definitely recommend to either asking your system providers to add this or look to switch your system. Hulexo POS Solution is one which covers all of these. Feel free to get on a call with us and allow us to give you a free demo.