Maximizing Retail Profitability Through Average Sales Per Customer Transaction

The conventional retail sector is notorious for its limited profitability rates. As reported by The Food Industry Association, Food retailers’ Net Profit After Taxes was only 2.3% in the previous year and has been decreasing for the past two years. While it remains significantly higher than pre-pandemic levels, hovering between 1% and 2%, most grocery executives do not long for the “good old days.”

With the retail industry being complex and having numerous key performance indicators (KPIs) to evaluate its performance, which KPI shows the most potential in enhancing net profits? To address this inquiry, we turned to LinkedIn’s Grocery Executive Network, which boasts a membership of 14,115 individuals.

The victor is… the Sales Per Customer Transaction.

According to a survey, almost half of the retail grocery executives (48%) believe that increasing the size of the customer’s basket will greatly affect the financial performance of their business. By focusing on increasing the average amount spent per customer transaction, retailers can have a direct impact on their overall profits. This particular key performance indicator (KPI) measures the effectiveness of upselling techniques, cross-selling strategies, and the overall customer experience, all of which play a role in increasing sales per customer transaction. The second most important performance indicator, chosen by 31% of respondents, is Weekly Foot Traffic, followed by Sales per Square Foot at 21%.

What is the next step?

The primary follow-up step is to evaluate and examine your current and upcoming plans for upselling and cross-selling. This includes assessing the resources they require and the measurable returns they generate. While there are numerous tools and technologies available for purchase that promise to greatly improve operational efficiency and potential growth, the problem lies in the scarcity of proficient skills needed to utilize them. In reality, success is often determined by the level of execution rather than the action itself. It is better to focus on fewer initiatives executed with expertise, as they can yield better returns in a shorter period of time. As suggested by this expert in technology, it is a rare exception to find a new and shiny tool that can give your business a significant advantage over competitors.

The next step is to compare this key performance indicator with the top achievers in the industry and gain insight into their effective methods. Our team has conducted extensive research and shared the findings in the e-book Power of In-Store Engagement, which is available for free download by following this link. The e-book highlights the success of retailers who prioritize providing an interactive shopping experience, setting them apart from competitors who focus on competitive pricing. This approach leads to higher sales per square foot and increased operational profits.

Within this electronic book, we propose an established method for engaging with customers and increasing sales that has been effectively utilized by top companies in the field for many years, resulting in remarkable financial outcomes.

Surprisingly, many supermarkets have not taken notice of this strategy that leverage extensive use of in-store sampling, leaving a great opportunity for those competitors who act quickly before it becomes widely known. Moreover, this approach is technology-driven, product vendor sponsored, and does not require any financial investment, as it utilizes the expertise and resources of existing partners, making it easy to implement in a very short period of time.


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