POS Data: which are the relevant KPIs at store level?
Gilles Dallest
Proper tracking of point-of-sale activity is one of the keys to operational excellence. However, it is sometimes not so easy to effectively prioritize the different datasets available. The purpose of this post is to try and provide some clarity starting with making the difference between quantitative “results” data “operational excellence” indicators used to track and optimize sales at the level of each store.
Listings, heads of gondolas or shelf shares percentages have never been goals in themselves but means to achieve the objective of selling more and better, in a profitable and sustainable way.
It is the availability and comparison of quantitative and operational quality indicators that allow us to judge the effectiveness of the strategies and tactics implemented and to allocate the appropriate resources to the channels and stores that require them.
BASIC INDICATORS
The basic indicators at POS level can be categorized as follows :
Quantitative KPIs (how much?)
- Turnover and progression
- Rotations
- Market share
Operational excellence KPIs (how?)
- Price
- Presence of the assortment
- Listings
- Out-of-stocks
- Innovation
- Visibility
- Shelf share
- Shelf height
- Promotional exposure (yes/no, type of exposure)
- Communication
The three main data sources for these KPIs being:
- Sell-out data aka “POS data” (« point of sale ») that can be sourced from cash register or loyalty card transactions.
- Sales force store checks (CRM)
- Stores direct deliveries aka “Sell-In”
Let’s see now which data sources are the most relevant
SELL-OUT DATA
Sell-Out data are the only type of data supplying the quantitative elements of demand as they are directly sourced from the stores check outs.
They also allow to calculate a wide range of qualitative KPIs once valorized and reworked with the adequate algorithms.
They are exhaustive data as within the data sharing agreements retailers usually supply manufacturers with information pertaining to all circuits and channels including smaller supermarkets and convenience stores.
The main KPIs available or calculated thanks to POS data are:
Quantitative KPIs (how much?)
- Turnover and progression
- Rotations
- Market share
Operational excellence KPIs (how?)
- Price
- Presence of the assortment
- Listings
- Out-of-stocks
- Innovation
Visibility KPIs are actually the only ones that remain out of the scope of the information directly supplied or calculated with sell-out data.
SELL-IN DATA
Sell-In data are the most traditional measure of store sales sourced from direct deliveries to each of them.
They are limited to stores that are direct-delivered, a practice that has been greatly reduced with the spread of retailers’ logistic platforms, thus depriving manufacturers of a fundamental indicator.
They are an excellent complement to the “Sell-Out” data since they allow to calculate the level of stock within the distributor’s supply chain even if this information is only available at each platform’s level.
Quantitative KPIs (how much?)
- Turnover and progression
- Rotations
Operational excellence KPIs (how?)
- Presence of the assortment
- Listings
- Innovation
CRM DATA
The CRM data (or store checks data) allow to know the qualitative elements of the presence of SKUssince they are derived from observations made in each store by the Sales Representatives or by panelists.
They are limited to the stores visited since sales forces never cover the entire channels of distribution especially when it comes tu smaller supermarkest and covenience stores.
They have essentially a statistical value as the frequency of sales force visits to the stores (at best weekly) does not allow to get a full pictures of the situation especially with regard to out-of-stocks and pricing.
They are an ideal complement to the “Sell-Out” data as they are the main source in terms of shelf share information or the quality of promotional exposure.
Quantitative KPIs (how much?)
- None
Operational excellence KPIs (how?)
- Price (visited stores only)
- Presence of the assortment (visited stores only)
- Listings
- Out-of-stocks (on the day and time of the visit only)
- Innovation
- Visibility (visited stores only)
- Shelf share
- Shelf height
- Promotional exposure (yes/no, type of exposure)
- Communication
THE IDEAL COMBINATION
The combination of Sell-Out data and CRM surveys, as well as ideally Sell-In data and panels, provides a perfect view not only of the measures implemented in each store but also of the results of these actions and makes it possible to appreciate the relevance and quality of the plans implemented.
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