Improving Key Performance Indicators This Holiday Season
As “Black Friday” has evolved over the years, it has shifted from a single shopping day after Thanksgiving, to more of a season from the beginning of October through Thanksgiving weekend.
According to Adobe Analytics data, consumers spent $72.2 billion online in October 2022, up 10.9% from the previous month and on par with the $72.4 billion spent online in October 2021. In spite of the recent inflation and fear that consumers would not shop, many are choosing online shopping to buy early with many of the deep discounts available during Black Friday sales.
This lengthened holiday season for suppliers and retailers shifts operations from a sprint to more of a marathon mentality because the season has evolved from the last five weeks to the last three months of the year.
What key performance indicators does your eCommerce business focus on to make sure they can withstand the holiday season?
What are Key Performance Indicators?
According to Investopedia, key performance indicators (KPIs) are quantifiable measurements used to gauge a company’s overall long-term performance. There are strategic KPIs that focus on a high-level snapshot like the return on investment or profit margin.
There are also operational and functional KPIs that measure over a specific frame of time and focus on particular functions of business. For instance, in addition to more strategic KPIs like sales, profit and traffic, knowing which indicators like inventory levels or the amount of time it takes from receiving an order to shipping is critical.
Top eCommerce KPIs
There are tons of KPIs available to choose from, but knowing what will benefit your business will be critical to your success. Monitoring performance manually is timely and not without error. Automation and software are critical to knowing real-time data so that you can make accurate and timely decisions across several key areas.
Inventory:
Access to real-time data on what inventory levels are and reporting accurately across multiple sales channels is critical to sales and maintaining trust. KPIs include inventory turnover rate, days or weeks on hand, sell-through rate, backorder rate, rate of return, etc. and knowing which of these may impact your bottom line and how your team can make smarter purchasing decisions will help with smarter purchases.
Fulfillment:
This is the process of fulfilling a sales order to the customer’s specifications and delivering goods as promised. Understanding data on what is received from suppliers and how it is stored in the warehouse will ultimately impact how your team processes and packs. KPIs include internal order cycle time, order picking accuracy, inbound orders received, orders shipped per business day, percentage of orders shipped by expected ship date, etc. In tough labor markets, knowing how to simplify and streamline processes so that your team can keep up with demand and high order volume, while keeping errors low is critical for success.
Shipping:
Understanding your business shipping metrics is critical for success in supply chain performance. If your team can have inventory on hand, make the sale and pack the box, but is unable to ship it correctly, then the error costs you in loss of product and potentially in refunding the customer. Consumers today are also very particular about shipping and do not allow for much wiggle room when it comes to shipping errors.
KPIs include shipping time, order accuracy upon delivery, delivery time, total order cycle time (includes both fulfillment and shipping), transportation costs, warehousing costs, on-time shipping percentage, peak warehouse capacity used, etc. Quality of delivery is just as important as the time of delivery and all part of ensuring customers have a positive experience with your product and the sales channel or retailer.
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If you’re looking to better understand your eCommerce business KPIs, automation and software are critical components to success so that you can have access to real-time data and make informed decisions.
To learn more about how OPAL has partnered with many to scale their business to new levels of success, click here.
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