What are two key performance indicators (KPIs) used to measure merchandising success?

Sales per square foot and inventory turnover rate are two critical performance indicators that effectively measure merchandising success.

Sales per square foot provides insight into how efficiently retail space is being used to generate revenue. It reflects the financial performance of the allocated space and helps businesses assess which areas of their merchandising strategy are most effective. High sales per square foot indicate that a retail operation is not only bringing in significant revenue but is doing so efficiently relative to the space that merchandise occupies.

Inventory turnover rate measures how quickly inventory is sold and replaced over a specific period. A high turnover rate indicates that products are selling quickly, which can be a sign of strong demand and effective merchandising strategies. It also implies efficient inventory management, reducing the holding costs associated with excess stock. When turnover rates are high, it typically reflects a well-curated selection of merchandise that resonates with customers, leading to repeat sales.

Both of these KPIs are fundamental in evaluating the performance of merchandising efforts, allowing businesses to make informed decisions about inventory management, space allocation, and overall merchandising strategies for optimal profitability.