5 KPIs for the clothing sector and the use of data from these indicators

The five main KPIs in the clothing sector are:

1. Follow up;
2. Customer satisfaction;
3. Total turnover;
4. Sales volume;
5. Average ticket.‍‍
   

These key performance indicators (KPIs) provide essential data for a company's strategies and decisions in this business area.

And the lack of definition or good use of them leads to lost opportunities and, consequently, financial loss.

To help you with these definitions and how to use your data, Indicium brings you in this article, in addition to the five main KPIs in the clothing sector, two great cases for you to be inspired by.

With a clear view of this whole scenario, you can improve your decision-making and business results.

Keep reading.

What is a KPI?

KPI is the acronym for key performance indicator. It is a tool for measuring an organization's efficiency.

KPIs are used to analyze different areas of a company, whatever the segment. And the definition of these metrics must be carried out in accordance with the objective of each business.

Once defined, the KPIs serve as a benchmark for monitoring and evaluating business performance and for the leadership to make strategic decisions on a timely basis.

To do this, the indicators must be monitored frequently, keeping the organization's objectives always aligned with the results.

How to measure KPIs?

By analyzing KPIs, it is possible to optimize costs, have better stock control, increase productivity and, most importantly, generate greater customer satisfaction.

Logically, a company that knows how to analyze its data is able to management.

And you can monitor your company's performance by following these guidelines:

• define indicators that are relevant to your business;
  
• set realistic targets for each KPI based on past performance; keep an eye on the competition for other benchmarks;
  
• determine the frequency of measurement of the indicators;
  
• use appropriate data analysis to collect, process and visualize important information for KPIs;
  
• analyze the results and make adjustments where necessary.
  

Don't neglect the indicators. Identify trends and actions for improvement over time.

5 main KPIs for the clothing sector for 2023 and 2024

By defining and measuring KPIs, you can have a clearer view of the areas of sales, profitability, operational efficiency, customer satisfaction, among others.

KPIs provide objective information that helps to make decisions based on data.

And managers can identify trends and predict results based on analysis of the organization's past performance.

Analyzing KPIs also means promoting effective communication in line with the company's objectives.

By having clear targets and indicators, your team will be able to understand what is important to achieve success.

Here are the 5 main KPIs in the clothing sector to keep an eye on in 2023:

1. Follow up

The follow up rate is a metric that measures the proportion of interactions or follow-up actions carried out in relation to the total number of opportunities or contacts initially identified by the company.

This KPI evaluates the effectiveness and consistency of activities following initial contact with a potential or existing customer.

For example, if your sales team contacted 100 potential customers and followed up properly with 80 of them, the follow up rate would be 80%.

This data is important because it demonstrates the team's commitment to maintaining contact with leads and customers in order to establish ongoing relationships and monitor the progress of business opportunities.

A high follow up rate can indicate a positive approach, which can lead to an increase in conversions and sales.

2. Customer satisfaction

Customer satisfaction is related to every interaction between customer and company, from the moment a question is answered to the moment a sale is made.

It is important that you take into account the average service time, product reviews, abandonment rate and repurchase rate when analyzing this KPI.

A company that can listen to its customers has a competitive advantage in the market. Remember that a satisfied customer is able to promote your brand more effectively than marketing strategies.

3. Total turnover

The total turnover metric is an indicator that measures the total value of sales over a given period of time.

This KPI is important for evaluating your company's financial performance.

There is also the profit margin indicator, which is used to measure profitability in relation to total turnover.

A healthy profit margin indicates that your business is generating a good return on its sales, while a low profit margin may indicate the need to adjust costs, prices or sales strategies.

These two metrics are related, as the total turnover directly influences the profit margin. By analyzing these KPIs you can assess the effectiveness of your sales strategies, identify opportunities for growth, control costs and expenses to improve the profitability of your business.

4. Sales volume

The sales volume KPI measures the total quantity of products sold in a given period of time. It is used to evaluate the performance of sales activities, providing an insight into how much your company is selling.

Analyzing the data from this metric is essential for tracking sales growth or decline over time, identifying seasonal trends and changes in market behavior.

Strategic decision-making based on concrete data allows the leadership to evaluate the effectiveness of sales, production, logistics and marketing strategies.

5. Average ticket

The average ticket is calculated by dividing the total value of sales by the number of transactions or customers.

From this analysis you can find out the average amount your customers are willing to pay for each purchase. It can be used to evaluate the performance of pricing strategies, promotions and the sale of additional products.

With this KPI you'll be able to analyze your customers' buying behavior and direct marketing and sales efforts to encourage further negotiations.

How Indicium can help measure retail KPIs

We understand the importance of predicting clothing trends in order to make more effective decisions. That's why Bograntex came to us looking for a solution that could revolutionize its planning process.

Based on the analysis of KPIs, we created a sales forecasting model based on historical and current data . As a result, Bograntex achieved surprising results.

Our other successful case in the clothing sector was with Labellamafia. Decisions on collections became clearer, based on concrete data.

KPIs have become strategic allies, allowing the company to monitor its performance against established targets and identify opportunities for improvement.

Now it's your turn. With the Indicium methodology, we want you to achieve better results in retail.

We are a data company localized at New York and Brazil, but we can help you in another place in the world.

Contact us by clicking here and find out how Indicium can partner with you to turn your data into powerful insights and boost your business performance.