Rapid Change Requires New Success Metrics

In mass market retailing, retailers and suppliers have been bound together in determining mutual success through two measurable objectives: space and visibility.

SVP, Retail Insights Europe

As a result, most retailers are benchmarked on maximizing productivity of space—measured as sales per square meter (or square foot). Suppliers are benchmarked on maximizing return on visibility—measured in category contribution ratios with an emphasis of productivity of shelf or gondola-end facings. #RetailApocalypse has changed all that. Retailers have begun the process of closing stores, converting spaces into service areas, and shrinking their self-service “shoppable” spaces. Worse, some have gone out of business. Meanwhile, suppliers have begun to shift all their investments into digital content rather than physical point-of-sale excellence. As we think about how to measure success in the future, when using voice or other methods of selling, will space and visibility be the metrics that matter? Even if they matter, will it still be possible to measure them? The personalization of retail is under way, which is a good thing for consumers, retailers, and brands. However, it may be a bad thing for those who cling to traditional success metrics.