Inventory Planner’s KPIs report is a very useful tool that gives merchants a tremendous amount of flexibility in assessing their business’s performance from a variety of perspectives, ranging from quite broad to extremely granular.
What are KPIs?
First, it’s important to understand what KPIs are, and why they’re important to any business, large, medium, or small. KPI stands for key performance indicators. KPIs help determine a company’s strategic, financial, and operational achievements, especially compared to those of other businesses, or compared among different time periods for the same business. Carefully planned KPIs, and the commitment to track them regularly, can help your business succeed.
It’s important to evaluate and re-evaluate your KPIs as time goes on to make sure they’re still effective for your business. And it’s important, too, that everyone in your business is familiar with its KPIs and their role in affecting them.
Using the Inventory KPIs Report
Once you’ve set KPIs, Inventory Planner makes it easy to assess your business’s KPI progress and to assess it in a variety of ways. Inventory KPIs, is available under Reports from the left-side menu in Inventory Planner.
Customize the report to see the information you need including:
- View by location / warehouse
- View by different dimensions (total store, category, vendor, product, variants, etc.)
- View for custom time periods
- View comparisons of different time periods, including the prior period, prior year or custom comparison
- Choose from 125+ metrics to include in the report
Being able to view your business’s performance by location or warehouse gives you a sense of whether some locations are performing better than others. Or you can take a view through a variety of different dimensions, including total store, by category, vendor, product, variants and more.
As you get more granular in your assessment of your KPIs, you can zero in on what is impacting your business. Perhaps some vendors’ products are underperforming other vendors’ products. Or maybe some product categories are not meeting your expectations. Within product categories, the KPI report can tell you whether certain variants are selling better than others, which helps you make decisions about ordering and stocking.
As you drill down into your business’s data, you can use the details to make informed decisions about how to change your strategy or tactics.
Inventory Planner’s KPI report also allows you to customize time periods for comparison purposes. In some cases, it can be useful to compare one week or month to an earlier week or month. In the case of seasonal products, it can be helpful to use the report to compare performance of certain products from the same period in one year to another.
There are more than 125 metrics that can be incorporated into the KPI report. To select metrics shown in the report, click on the gear icon in the upper right corner. See the Glossary of Terms to learn more about the definitions and formulas used to calculate these metrics.
Let’s take a look at how Inventory Planner’s KPI report can be so useful to a business trying to assess its performance.
Fast fashion or trendy products
Say you’re selling fast fashions or other highly trendy items that tend to go in and out of style quite quickly, selling very well for a time and then dropping off. With a KPI report, you can carefully track weekly sales trends to stay on top of those products’ performance. If you see some concerns, you can use the metrics, as necessary, to further investigate. Maybe certain variants of the product are still selling quite well, while others are not; or maybe some of your locations are selling more of the product than others. Or maybe sales are softening across all the metrics, indicating that product’s time may be over. The KPI report can capture this information for you.
If you’re selling products whose sales are driven largely by seasonality, you can compare sales trends from one year to another. So, if back-to-school sales of backpacks, say, are down from previous years, you can use the KPI report to take a look at certain metrics to see what’s affecting that.
Among the 125-plus metrics you can pull up in your KPI report are such key measurements as sell-through and stock turn. Both are very useful. Sell-through is how much of your opening stock levels you sold during a selected period. It’s calculated by dividing sales during that period by your opening stock and multiplying by 100 to get a percentage. For example, if you want to turn over your inventory fully in a month, you’re aiming for a 100 percent sell-through for the month.
Stock turn, on the other hand, is calculated by dividing sales by the average stock for the sleeted period, again multiplied by 100 to get a percentage. This figure helps you determine how quickly you’re going through inventory and what is driving revenue. It also helps show which items are sitting on your shelves too long, tying up cash that could be used to buy faster moving inventory.
Using the KPI report and its metrics helps you determine whether there are one or two specific factors that are driving the sales trends, for better or worse, for any given product.
With that information in hand, you can make key business decisions.
Make sure to make Inventory Planner’s KPI report a tool you return to regularly to track your key performance indicators and help ensure your business is as successful as possible.