by Courtney Manning
Having been in Site Merchandising and Digital Analytics roles with major retailers for over a decade, I understand there is no shortage of retail metrics available to product teams. Each team (Site Merchandising, Buying, Marketing, etc.) has their own robust set of metrics they rely on to evaluate and improve upon their area of focus—and they are doing so in silos. Rarely do you see these disparate data sets combined to derive a new set of retail metrics that uncover insights and opportunities previously hidden to the business.
DynamicAction connects data from across an organization to surface a number of new retail metrics designed to help merchandisers identify and prioritize opportunities for additional sales and profits. Allow me to share with you a few of my favorite retail metrics found within DynamicAction.
Retail Metric 1: Retailing Profit
Let me set the scene: You are a Site Merchandiser who partnered with Marketing to run a promotion on Instagram to encourage new customers to purchase online. When an Executive emails you both for a recap and a possible strategy for future campaigns of this nature, what is the response? Bear in mind that as of late, top-line sales have been relatively flat YoY, but profits were down—leading to a downturn in stock price and an uptick in Executive emails interested in strategies to drive the business.
Typically, the Site Merchandiser would determine the success of a campaign with the metrics in a web analytics reporting tool: Sales, Units Sold, Product Conversion, Product Views and Add-to-Cart Rate. Marketing would examine New Customers, PPC and Email Click-Through Rates. But, what of profits?
DynamicAction’s Retailing Profit metric shows profits generated for a given period calculated as Product Profit + Shipping Profit – Marketing Costs – Other Opportunity Costs (GWP or Item Promotion). With the Retailing Profit metric surfaced in the solution, along with a breakdown of contributing factors in the Profit Tree data visualizations, no longer is P&L information dangerously tucked away in Finance, Executive meetings or revealed on bonus sheets. It means everyone is aware of the profits generated and is prepared to take steps to improve upon it together as an organization.
Retail Metric 2: Views Availability
Here is another scenario for you. A Site Merchandiser is partnering with the Buying team to run a promotion on Women’s Denim to encourage sales in an otherwise lackluster season, save a couple of blockbuster trends. (Who would have guessed that fraying hems or pants that appear to be too short, such as cropped flares, would be such a hit?) When discussing inventory levels for the event, the Buyer assures the Site Merchandiser that she is 90% in-stock for the category, so there is no need to worry about customer selection.
That sounds great, right? Well, if the team had DynamicAction’s Views Availability metric, which aligns product views with inventory data, they might see that they are, in fact, far less in-stock for those items that are actually desired by customers.
With this kind of insight, retail product teams can focus on maintaining inventory levels and increasing visibility for items that hold customer interest to drive sales. Cool, right?
Retail Metric 3: Inventory Value: Viewed, Not Purchased
“What’s wrong with this product?” When examining product reports in a web analytics tool, it can be difficult to decipher which low or non-converting items to focus on first. Without alignment to inventory data, Site Merchandisers may only be focused on items that have the highest views unless they are willing to toggle endlessly between spreadsheets or attempt to join the data together in some way (but one report lists SKU and the other Product ID!)
DynamicAction clients examine products in order of inventory value, which means retail product teams are prioritizing items that are jamming up their open-to-buy or have significant stock, thereby increasing the probability of sales and reducing the likelihood of inventory occupying valuable warehouse space. Step aside mud jeans, it’s time to make way for those embellished mom jeans(?!).
Metrics no longer need to be relegated to a specific functional area. By connecting data sets from across the organization, retailers can derive more insight and unlock opportunities for increased sales and profits from data that already exists. Make sure your teams are looking at the next wave of metrics that will bring your business into the future of retail.
About the author:
Courtney Manning has been active in eCommerce since 2005 and has held roles in both Site Merchandising and Digital Analytics for Macy’s, Bloomingdales, Amazon and Nordstrom. Her passion for eCommerce and desire to arm retail product teams with insights that will reduce analysis time and encourage better, more profitable decisions led her to DynamicAction, where she currently holds the role of Solution Consultant.