All small business owners want to see higher profits — but how do they plan to make it happen?
The first step on your journey to a more profitable business is to understand three key grocery store metrics: your inventory turnover rate, average transaction value, and customer retention rate.
In this blog, we’ll explain why these grocery store metrics matter — and how you can improve them.
1. Inventory Turnover
How much time passes from when a box of cereal arrives at your store and hits the shelves to when a customer purchases it and takes it home?
This grocery store metric is called your inventory turnover rate. Your inventory turnover rate is a measure of how quickly and efficiently stock moves through your store.
To learn your store’s inventory turnover rate, refer to your point of sale (POS) system sales reports. Your POS system should provide you with a helpful breakdown of your inventory turnover rate overall and by item, giving you insights into which items are flying off the shelves — and which are simply sitting.
How To Improve Your Inventory Turnover Rate
A good inventory turnover rate is crucial for grocery store success, so let’s take a look at a few ways you can improve this grocery store metric:
- Optimize your stock. Use your POS system’s sales records to identify your bestselling and slowest-moving items. Equipped with this data, you’ll be able to tailor your offerings to your customers’ preferences and boost your sales.
- Spruce up your inventory management techniques. To prevent overstocking and spoilage, make sure you’re using the best tools and practices to manage your stock. We recommend relying on a POS system with real-time inventory monitoring.
- Plan strategic promotions. An enticing promotion is a great way to move your stock and increase your inventory turnover rate. Identify which items you have too much of, mark down the price, and promote the sale.
Leveraging these strategies can boost your inventory turnover rate, save space, eliminate waste, and boost your bottom line.
2. Average Transaction Value
The next grocery store metric to watch is your average transaction value.
Average transaction value is as simple as it sounds: It’s the average amount your customers spend per transaction.
It’s important to consider your average transaction value in conjunction with the number of transactions that your store processes each day. For example, if you own a corner store, you’ll probably see a lower average transaction value, but you’ll have more customers coming through your door each day.
On the other hand, if you own a specialty market or an all-purpose grocery store, increasing your average transaction value should be a priority.
How To Increase Your Average Transaction Value
This grocery store metric is an essential ingredient for higher profits, so here are three ways to increase your average transaction value:
- Cross-sell related products. Place related products near each other or use bundle promotions to encourage your customers to add additional items to their carts. For example, before a long weekend, you might create a display with cookout essentials like hotdogs, hamburgers, buns, chips, and condiments.
- Incentivize spending with a customer loyalty program. Consider implementing a points-based loyalty program that allows your customers to unlock special discounts and perks when they spend more.
- Revamp your store layout. Place your highest-margin items in the highest-traffic areas of your store to increase visibility.
Give these three strategies a try to boost your average transaction value.
3. Customer Retention
Did you know that it’s significantly more difficult — and more expensive — to attract a new customer than to keep an existing customer?
That’s why your customer retention rate is a key grocery store metric to watch.
Your customer retention rate is your store’s ability to keep customers coming back over time, highlighting your shoppers’ satisfaction and loyalty.
To determine your customer retention rate, use your POS system’s customer relationship management (CRM) tool. This powerful feature keeps a record of your customers, showing you whether they’re enrolled in your loyalty program, how often they visit your store, and how much they spend on average.
Diving into your POS system’s CRM data will give you a baseline for this grocery store metric, showing you how active and engaged your customer base is.
How To Build Your Loyal Customer Base
To improve this critical grocery store metric, we recommend getting creative with strategies like these:
- Eliminate pain points for your shoppers. Long checkout lines, a confusing store layout, and frequent stockouts can lead to low customer satisfaction and retention rates. Think through every aspect of the customer experience, and address any problems preventing them from choosing your grocery store.
- Implement a customer loyalty program. Give your customers a reason to choose your business over the competition. A customer loyalty program allows shoppers to earn rewards and access exclusive discounts and perks when they visit your grocery store.
- Surprise and delight. Make shopping at your grocery store a special, memorable experience. Train your team to provide top-notch customer service and create a genuine connection with your shoppers.
Going above and beyond for your customers will ensure that they come back time and time again, relying on you as their exclusive grocer.
Tackle Your Grocery Store Goals With Markt POS
Ready to take on the challenge of improving these grocery store metrics? We’re here to help.
Markt POS is the tool you need to boost your grocery store’s bottom line. With robust inventory management, powerful sales reporting, and a built-in loyalty program, Markt POS has everything you need to improve your inventory turnover rate, increase your average transaction value, and grow your customer base.
Take Markt POS for a spin by scheduling a live demo, or use our build and price tool to create your custom POS solution today.
