Five Minute Friday: Knowing Your Numbers - The 2 Metrics That Drive Performance

Being a retailer ain't easy. That's why we at the Boutique Hub are going to be coming to you with a new series called Know youw Numbers. We're going to get the facts on what is the most important to drive profit, drive cash in your business and really have you feel in control over your future. Numbers are black and white. It's the one thing we record every day. And we're going to teach you how to make the most of tracking your KPIs and metrics. Let's jump in today. I'm really excited because this is my favorite AOV and upt. Average order value and units per transaction. Now why am I so excited about these two metrics? Well, to me there's two things here. One, it is back to the basics, right? This is what is, as I like to think about it, old school retail. Those foundations, those fundamentals, those things that we never want to slack at. And there is always the chance to improve our performance with these two metrics, right? They say in retail you open your doors each and every day and you have a chance to better yourself, the customer experience, the selling experience. And you can see a daily impact in average order value and UPT units per transaction. So these are simple formulas. Let's jump in your average order value. It's simply your dollar sales divided by the number of transactions. And let's think about this. D so how much did I sell today divided by the number of transactions, Units per transaction. Okay, Your UPT again, how much did I, how many units did I sell today divided by the number of transactions. Okay. So these two formulas again are going to show you how you are performing, right? So your average order value, this may vary from, from industry to industry, right? So a luxury retailer may have a really high average order value. Where a home and gift store maybe somewhere in the middle, decor, even furniture getting up there. And a trend fashion store may be sitting at a much lower average order value. So it's not about benchmarking it against other retailers. It's really about making sure that it is increasing day to day, week to week in your, your business, right? You want to benchmark your performance against yourself. You want to continue to better yourself. And units per transaction, same thing. Am I able to get that customer to purchase one more thing? We want to keep inching that up. Here's a great example of upt. Okay. When I was working in children's retail, we used to sometimes get lines and when people are checking out and they had kids with them and it could get A little bit hectic. So we put a gummy bear stand on the line and guess what? People would grab it, it would add another unit to their transaction. And as that adds up, time, over time, you're going to see your sales add up as well and that's going to impact your bottom line. So that was a fun little walk down memory lane from my retail days on the floor. So these metrics will help support your business. Think of them almost like an insurance policy. If you are, you know, continuing to perform to continuing to raise the bar, continuing to add to your AOV and upt. Right. Whether there's economic downturn, a little bit tougher times, pricing is being impacted, well, you could continue to inch up your performance and inch up your sales. Right. It's a little bit of a protection policy. And hey, they're directly tied to your training and your ability to really connect with your staff and have them up that selling and service service and that connection with the customer. It's quite literally what separates good retailers from great retailers. So here are my tips. First of all, this is a daily practice. We want to see daily results. So remerchandise often, right? Just like that gummy bear example. We want that right in front of the register. Where are things placed that is super important to how they'll sell? Can we take product that isn't moving in one location and move it to another to stimulate those sales up that average order value? Train on cross selling your staff, your people. You should be able to sell across your store. Accessories with outfits, Home and gift stores. Let's put together a tablescape. Pet stores. We're not just selling a leash, we need to sell a leash and supplements and the dog bed. Right? We need this all coming together. Product knowledge is going to be your secret weapon. The more you know about your product, the more you can, you know, encourage your team and, and really download that knowledge to them day after day, the more they're going to be able to sell with confidence. Loyalty programs, this is super important to have people coming back and spending money with you and then finally bundling things together. So we may want to take something that's a markdown item and bundle it in with a few things. And look, that's going to increase your UPT and save you from promoting that markdown. So bundling is another great strategy and this is all perform. So my big tip here, this needs to be tracked daily and we want to see it on the rise. So don't compare yourself to other retailers. Compare your best performance against yourself. Challenge your staff and yourself to do better, just a little bit better each day.

That's it for five Minute Friday, you guys. I hope you found some quick, actionable steps you can put into play in your business right away. As always, if you're not yet a member of the Boutique Hub, I would love to personally invite you to join us. It's where all of the daily conversations happen. The up to date what is working now in the industry conversations, the latest trainings, trend reports, discounts, resources, and of course access to thousands of wholesale brands that you also know and love. So please take a minute, follow the link in the show notes and we would love to invite you to join us inside of the Boutique Hub.