How Retail Analytics Can Help You Drive Sales

By Eula Skiles, Paper Writing Service and Oxford Writing Service

There are many ways that you can improve your business's sales, but one tactic that not enough people are using is analytics. Gathering and analyzing sales data can tell you volumes about how your business is working, and what can be done to improve sales in your store. Here's how you can use analytics to drive sales and achieve more success.

Using The Average Transaction Value

The Average Transaction Value is simply how much a customer will spend with you on average when they visit your store. This is data you can easily get whether you run a brick-and-mortar store or an online storefront. If you're online you can often get this data through your analytics, but you can easily calculate it yourself too. Simply divide the total value of all transactions by the number of transactions. In a month, if you've sold $50,000 of goods total and you had 500 sales, then your Average Transaction Value, or ATV, is $100.

You can use this value in a lot of ways, to improve your overall sales. For example, you'll be able to set goals to help increase that average spend. There are lots of tactics you can use to do this. For example, offering customer promotions will encourage them to buy more. Upselling at the POS also will help bulk out each customer's order. In a physical store, you also can incentivize employees by working out their ATV scores and identifying the top-scoring employees.

Using Items Per Purchase

Another key metric you should be tracking is items per purchase. You'll also see this referred to as Units Per Transaction, or UPT. This tracks the average amount of items that a customer buys in your store. It's similar to ATV, so you can use it to help drive sales. To find out your UPT, divide the total number of products sold by the total number of transactions in a given time. If you've sold 100 items in 50 sales, the UPT will be 2 in this case.

There are lots of ways that this UPT score can be increased, increasing your overall sales. Most stores will use techniques like cross-selling, upselling, and impulse sales to get the results they're looking for. A good way of doing this is by strategic merchandising. In a supermarket, items will be put together on the shelf to encourage you to buy both of them. For example, sunglasses may be placed next to the sunblock, as you'll probably want both of them.

Also, training staff in what you have available will pay dividends. “Well-trained staff will be able to make recommendations for your customers,” says business writer Paula Lyons, from Research Papers UK and Writinity. “When they can do that, customers are more likely to buy more from you.”

Pay Attention To Your Market Basket Analysis

Market Basket Analysis, or MBA, is an important metric that you'll want to pay attention to. This is similar to items per purchase, as you'll be looking for patterns in what customers are buying. The data is collected through the POD system, and the analyst or analysis software will take note of any products that are commonly bought together. For example, if someone buys a pair of shoes from your store, they may often buy shoe polish too.

With this data, you can start increasing sales by again using strategic marketing and other tactics to get people to buy these products together. It's a way of increasing sales organically, as you'll be looking to encourage customers to buy more by upselling those products to them.

Improve Your Conversion Rate

Your conversion rate is the number of people that visit your store or website and then leave after buying something. The more people buy something, the better your conversion rate will be. “Typically, stores may find that their conversion rates are quite low,” says Richard Sykes, a sales blogger at Draft Beyond. “For eCommerce stores, that rate can be as little as 5%.” As such, you'll want to raise it as much as possible.

Luckily, there are a few different ways that you can increase that rate and increase sales. If you run an online store, it could be that the products that your customers want are too hard to find. Make things easier for them by placing your products on your homepage. You also can test out different product pricing, to see if a different price point can convince a customer to buy from you. In a brick a mortar store, you may find you need more staff, as the customers aren't getting the help they need so they leave without buying anything.

Reduce Your Shopping Cart Abandonment Rate

This metric is often used in online stores, as it can be easily tracked. It shows how many customers have come to the site, put something in their cart, and then left without buying anything. You'll often be able to get this metric through your analytics software.

There are plenty of ways you can reduce this rate in your store. Many stores send follow-up emails to those who have abandoned their carts, which allows them to remind the customer that they can come back and buy. You can sweeten the deal by adding a money-off coupon too, as this makes them more likely to complete the sale.

Encouraging shoppers to buy right away also helps. Showing the total cost of the order before checkout helps avoid any sticker shock that a customer may experience at this point. Reducing shipping costs and having a generous return policy also will encourage customers to go ahead and make that purchase.

These are just a few key metrics that you need to be paying attention to in your business. Analytics are crucial, as they show you where your store can improve. Watch them closely and make the improvements as time goes on. You'll soon see an increase in sales from your store.

About The Author

Eula Skiles is a writer at Paper Writing Service and Oxford Writing Service. She covers digital marketing and marketing techniques. She's also a blogger for Gum Essays.