I track average sale value for my stores when assessing business performance monthly, by day of week, quarterly and annually. It is a valuable metric and a useful target to best over time.
In one of my stores, the average sale value for January was $12.35. This is in a business without lotteries, tobacco and convenience lines, where magazines and papers represent under 20% of revenue.
The $12.25 result is up 11% from the previous year for the same location. This increase is excellent as it records valuable growth before even considering transaction count growth.
Three key metrics to focus on in any retail business are:
- Transaction count.
- Average sale value.
- Overall gross profit percentage – a factor of buying and / or mark-up.
Focus on these and other metrics important to you will be strong.
I like the focus on average sale value as it is a simple metric, easily understood by all in the business and easily targeted for growth.
Product placement, customer service and the sales counter experience all play into maximising the average sale value achieved.
Thoughtful adjacency placement can drive impulse purchases on the shop floor.
Helpful but not intrusive shop floor engagement can guide purchases to a deeper basket, which lists purchase value.
A cleverly structured range of counter offers backed by helpful over the counter engagement can see items easily and valuably added to the basket at point of purchase.
This is why I like the average sale value metric. It is easy to articulate these things to staff, easy to get them on board and working with you.
Track the value. Note it in a common place. Make it the focus of team meetings. Ensure people are as focussed on growing this as you. Share the goal and rejoice in growth. Work to understand any decline.
Also, know that it will vary by season. This is why year on year comparisons for the same period in the calendar year are important.