Sales

KPIs

Sales KPIs are typically the first ones you will look at, and you will look at them daily. Some businesses
are looking at them throughout the day as well.
Sales are the first indicator of the health of your business. If you are
not making or exceeding your sales plan, you face an uphill battle to
achieve your profit plans.
Also, assuming you purchased the inventory to support your sales
plans, missing the sales plan means you are building up a potentially
costly inventory risk.

Type and Frequency of Sales KPIs

The following are the most commonly looked at Sales KPIs and the time periods they are most valid for.
Daily Weekly Monthly Quarterly/ “Product
Seasonally/ Lifetime”
Annually
• Sales Value • Sales Value • Same as • Same as • Sales Value
• Sales Units • Sales Units Weekly Monthly • Sales Units
• Average Selling plus • Average Selling
Price Price
• Promo Sales • Promo Sales
Value (a subset • Comp Value
of total sales) Store/Online • Promo Sales
• Promo Sales Sales % Units
Units (a subset • Markdown
of total sales) Sales Value
• Markdown • Markdown
Sales Value (a Sales Units
subset of total
sales)
• Markdown
Sales Units (a
subset of total
sales)

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These figures should always be compared to Plan (where applicable), Forecast (where available) and
Last Year.

You may also look at sales mixes (of sub-categories to the whole, for instance), or also consider “sales
build” which compares sales in one period – e.g., a week or a month – to sales from the previous period.
Sometimes it is also helpful to see the % Mix of Promo and Markdown Sales vs. Total Sales rather than
the raw values.
Showing the breakdown of sales by Promo (e.g., short-term price change activity) and Markdown (sales
from permanently marked down product) can be helpful, but is not always feasible. And depending on
the level of promotion and/or markdown activity in your business, this level of detail may not be truly
meaningful for you.

What to Look For?

In reviewing your sales figures there are
three main insights you are trying to gain
on your business:
• Are you achieving (or exceeding) your
plan?
• What areas of the business are driving
your results (what is strong, what is
weak)? Determine by looking at the sales
mix and the performance against Plan for
different sections of the business – by
Brand, by product category, by product
type, etc. This is also a good time to
compare your sales mix with your stock mix to both identify strengths and weaknesses and
provide potential performance drivers (e.g., insufficient stock to support planned sales)
• Are your sales being driven by regular price selling, promotional activity or marked down
product? Are these results in line with your expectations given your strategy and the time in the
season?

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Visibility to average selling price and comp store/online selling percentages also give you some early
indicators of what may be driving your sales performance.

Turning Insights Into Actions

Of course, you never look at Sales in isolation. You are also looking at
your profit performance and your inventory position. But all other
things being equal, you want to turn your sales insights into action by
either changing tactics to increase (profitable) sales or to reduce your
future inventory risk.
What this means in practice is finding ways to get more inventory of
what is selling well and reducing the inventory of what is not selling
well.
The levers that you have available to do these things will vary based on your business rules, your
position in the market and your company strategies. But each week you should be reviewing all of your
options in order to determine which actions will help you achieve your sales goals without jeopardizing
your margin and inventory productivity targets.
Some things to ask yourself as you review sales:
• Can I re-order more of what is working?
• Can I order new product that is similar to what is working?
• Can I change how product is being presented to the customer – either
online or in stores?
• Should I dial-up or dial-down upcoming promotional activity?
• Do I need to accelerate or hold off on taking permanent markdowns?
• Can I get out of re-orders of product that is not working?
• Can I return product that is not working to the vendor?

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