ARC 6.

2 Merchandise Analytics KPI Library

Manthan Software Services Pvt. Ltd 40/4, Lavelle Road, Bangalore 560001. India Tel: +91 80 2299 0585 Fax: +91 80 2299 0586

This document is the sole property of Manthan Software Services Pvt. Ltd. Any use or duplication of this document without the permission of Manthan is strictly forbidden and illegal.

ARC 6.2 KPI Library

Table of Contents
1 2 Introduction to ARC 6.2 ..................................................................................... 5 KPI Library .......................................................................................................... 6
2.1 Sales ........................................................................................................................6 2.1.1 Sales Performance ...........................................................................................6 2.1.2 Sales Productivity Analysis ...............................................................................7 2.1.3 Growth Trend Analysis...................................................................................7 2.1.4 Operations ........................................................................................................8 2.2 Merchandising ........................................................................................................9 2.2.1 Plan Vs Performance ........................................................................................9 2.2.2 Category Analysis ...........................................................................................10 2.2.3 Growth Trend Analysis.................................................................................10 2.2.4 Item Basket .....................................................................................................11 2.2.5 New Item Analysis ..........................................................................................12 2.3 Buying ...................................................................................................................13 2.3.1 Purchase Analysis ..........................................................................................13 2.3.2 Open-to-Buy Analysis .....................................................................................13 2.3.3 Vendor Performance.......................................................................................14 2.3.4 Vendor Efficiency Analysis..............................................................................15 2.3.5 Rebate Analysis ..............................................................................................15 2.4 Assortment............................................................................................................16 2.4.1 Brand Style Size Color...........................................................................16 2.4.2 Pvt Label Vs Brand .........................................................................................17 2.4.3 Item Sales and Distribution .............................................................................17 2.4.4 Merchandise Range and Analysis ..................................................................18 2.4.5 Seasonal Analysis...........................................................................................18 2.4.6 Fabric, Fit and Finish Analysis ........................................................................18 2.5 Inventory ...............................................................................................................19 2.5.1 Inventory Analysis...........................................................................................19 2.5.2 Ageing Analysis ..............................................................................................20 2.5.3 Item Stock Analysis.........................................................................................20 2.5.4 Out of Stock Analysis......................................................................................20 2.5.5 Excess / Short Inventory Analysis...................................................................21 2.6 Pricing ...................................................................................................................22 2.6.1 Price Range Analysis......................................................................................22 2.6.2 Price Point Analysis ........................................................................................22 2.6.3 Markdown Analysis .........................................................................................23 2.6.4 Discount Analysis............................................................................................23 2.7 Promotion..............................................................................................................24 2.7.1 Promotion Performance ..................................................................................24 2.7.2 Promotion Lift Analysis ...................................................................................24 2.7.3 Promoted Item Analysis ..................................................................................25

Manthan Software Services Pvt Ltd

Page 2 of 33

ARC 6.2 KPI Library

2.7.4 Running Promotion Analysis...........................................................................25 2.8 Placement..............................................................................................................26 2.8.1 Space Performance Analysis..........................................................................26 2.8.2 Space Performance Trend Analysis ...............................................................27 2.8.3 Planogram Performance Analysis...................................................................27 2.9 Loss Prevention....................................................................................................28 2.9.1 Shrinkage Analysis .........................................................................................28 2.9.2 Exception Reporting........................................................................................29 2.9.3 Loss Prevention Classification ........................................................................29 2.9.4 Refund and Void Analysis...............................................................................29 2.10 Mining ..................................................................................................................30 2.10.1 Sales Forecasting .........................................................................................33 2.10.2 Product Affinity..............................................................................................33 2.10.3 ABC Analysis ................................................................................................32 2.10.4 Product Rationalization .................................................................................32

Manthan Software Services Pvt Ltd

Page 3 of 33

ARC 6.2 KPI Library

Disclaimers
Disclaimer
Manthan Software Services Private Limited makes no warranty of any kind with regard to this document, including, but not limited to, the implied warranties of merchantability and fitness for a particular purpose. Manthan Software Services Private Limited shall not be held liable for errors contained herein or direct, indirect, special, incidental or consequential damages in connection with the furnishing, performance, or use of this material. The information in this document is provided as is and no guarantee or warranty is given that the information is fit for any particular purpose. The user thereof uses the information at its sole risk and liability.

Restricted Rights Legend

Use, duplication, or disclosure by any individual or entity is restricted. This is allowed only for the assigned user for the intended use.

Copyright Notices
Copyright 2008 Manthan Software Services Private Limited No part of this document may be copied, reproduced, or translated into any device, format or language by any means without the prior written consent of Manthan Software Services Private Limited. The information contained in this material is subject to change without notice.

Manthan Software Services Pvt Ltd

Page 4 of 33

ARC 6.2 KPI Library

1 Introduction to ARC 6.2

ARC is a comprehensive performance management solution for retail. ARC comprises a retail-specific enterprise data warehouse and business intelligence suite, incorporating an integrated stack of sophisticated components like scorecards, dashboards, intuitive information architecture, cube analysis, actionable reporting, Q&A engine, business activity monitoring and data integration. It helps retailers analyze the performance of their business from store to supply chain it unearths the hidden relationships between products, customers, promotions and multi-channels through reporting, analysis, and dashboards across all the 3 levels i.e. operational, tactical and strategic. This unparalleled business value is achieved through ARCs technologically superior engine which understands and anticipates retail data structures, ensuring rapid deployment (less than 4 months) and dramatic return on investment. The solution is designed to explicitly address the business processes, business practices and technology nuances of retail. ARC has been designed for various retail segments like food & grocery, fashion & lifestyle, general merchandise, and a range of specialty retail businesses.

Manthan Software Services Pvt Ltd

Page 5 of 33

ARC 6.2 KPI Library

2 KPI Library
The set of KPIs have been logically categorized into many major retail business domains such as sales, merchandizing and so on for quick access to relevant information.

2.1 Sales
The KPIs in this business domain help retailers understand how stores perform by providing analyses such as sales-trending, contribution-ranking, and year-on-year comparisons within the

store/merchandise hierarchies.

2.1.1 Sales Performance

KPI Title Target Vs Actual Sales Business Value This KPI helps top management and Operational managers assess the stores on the basis of their achievements against targets and identify under-performing stores or deficiencies in target-setting. This KPI help users to rank stores or merchandise categories by sales & profitability and benchmark the best performing stores. This KPI helps user to track the customer returns. The customer returns are a good indicator of customer satisfaction with purchases, quality of goods and sales process efficiency. An increase in this figure provides an early warning that the quality of the merchandise may need re-examination or that customers' expectations are not being met. Fraud instances are also be taken into consideration. This KPI provides information to users about the stores which are: selling high value products (ATV) up-selling or selling more than 1 Qty (ATS) selling products at higher average selling price (ASP) having better customer conversion rates

Sales and Margin Growth

Sales Returns

Sales Operation Performance

This KPI also helps user in comparing ATV, ASP, ATV, and conversion rate over previous year. This will help them to find causes for store's poor performance and reward good performing stores. Sales by Tender Type This KPI helps Store managers identify favorite mode of payments for its stores customers. It also helps in launching promotional offers with credit card companies.

Manthan Software Services Pvt Ltd

Page 6 of 33

ARC 6.2 KPI Library KPI Title Store Scorecard Business Value This KPI provides information which imparts a sense of the strategic direction to be taken in terms of allocating resources amongst stores, developing/discarding stores, store space planning, and so on.

2.1.2 Sales Productivity Analysis

KPI Title Sales Per Square Area Business Value This KPI provides information to the management that if the sales/square area is extremely high relative to the benchmark it probably means that the store has maximized its sales. A larger location is called for. If, on the other hand, the sales/square area is low it could mean that the store is not meeting its potential. This KPI helps the user to identify stores with high productivity ratios and stores that are understaffed with respect to comparable stores. This KPI report indicates how much profit the retailer is generating with the space available.

Employee Productivity

GMROA

2.1.3 Growth Trend Analysis

KPI Title Daily Sales Trend Business Value This information will help the Top Management, Merchandisers and Store manager in setting the Day-wise Targets through Day-wise trend and help him/her to decide the number of sales & support staff to be hired and allocate them accordingly. Week-On-Week sales growth is an indicator of the sales momentum during a particular period. Weekly sales reflect external factors like holiday weekends, seasonal events, etc. Month-On-Month sales growth is an indicator of the sales momentum during a particular period. It is an indicator of customer sentiment in a short term which can be used to finetune the intensity of selling effort by the retailer. This KPI provides information to users about the stores, which are selling high value products (ATV) up-selling or selling more than 1 Qty (ATS)

Sales WOW Growth

Sales MOM Growth

MOM Transactions trend

selling products at higher average selling price (ASP) It also compares ATV, ASP and ATS on month-on-month basis. This will help them to find causes for store's poor performance

Manthan Software Services Pvt Ltd

Page 7 of 33

ARC 6.2 KPI Library KPI Title Period Analysis Business Value and reward good performing stores. This KPI helps Operation managers see the incremental growth or decline in performance of their regions and stores at various periods like Weekly, STD, YTD, MTD, WTD. This KPI helps users to get a quick access to the sales for a period of recent weeks in the Departments, Class, Sub class.

Latest Sales and Share

2.1.4 Operations
KPI Title Salesman Performance Business Value KPI helps the user to see Net Sales by Salesman and helps calculate Commission due to the salesman on the basis of Net Sales Achieved. This KPI helps the user to identify the cashier who is generating highest sales on an hourly basis. This KPI helps user in evaluating the productivity of a cashier in terms of Tickets and Line Items Per Hour. These can be benchmarked against agreed productivity measures and appropriate action can be taken for those of the cashiers who are not meeting the productivity benchmarks. This KPI gives the information on the sales discounts ratio. The discounts ratio is a good indicator of the profitability of the store, an increase in this ratio indicates that the store assortment is not quite right which may lead to more markdowns and discounts than the optimum. This KPI also provides check on cashiers giving discounts at point of sales. This KPI helps Store managers allocate cashiers on busy tills. This KPI helps the Store manager to allocate its staff according to peak and slow business hours. It also helps the Store manager to plan for stocking merchandise on the shelves and for promotions to generate maximum sales. Analysis by This KPI shows the % growth of the Sales, Transaction Count and the Average Ticket Value. User can analyze the customers' average basket size per location.

Cashier Performance

Cashier Productivity

Sales Discounts

Sales per Till Sales By Hour

Transaction Basket size

Manthan Software Services Pvt Ltd

Page 8 of 33

ARC 6.2 KPI Library

2.2 Merchandising
KPIs under this retail business group help retailers optimize the merchandise mix based on a composite index of margin and sales value. Retailers are able to identify product affinity patterns, assess markdown performance, and track & analyze item-wise sales.

2.2.1 Plan Vs Performance

KPI Title Merchandise Plan Performance Plan Vs Actual Sales Business Value This KPI helps you to do performance analysis of sales, margin, markdown and stocks with respect to their plan. This KPI helps in identifying the categories that are not performing as per plan. This KPI is also a pointer for demand analysis. This KPI helps in identifying merchandise categories whose margins are not complying with the plan and take corrective actions. This KPI helps in shelf-life analysis and identifying excess inventory holding. It helps improve markdown accuracy by highlighting the temporary impact on sales. This KPI helps in budget planning and calculating Open-to-Buy (OTB) value. It helps users arrive at the required monthly spending patterns to support sales and achieve turnover and GMROI. This KPI helps in effective stock replenishment and in maintaining inventory turnover, thereby leading to higher GMROI. This KPI helps the user to keep track of plan vs actual sales and margin for Outright and Concession sales. Also one can analyse sales growth for both sales types.

Plan Vs Actual Margin

Plan Vs Actual Markdown

Plan Vs Actual Receipt

Plan Vs Actual Stock

Outright and Concession Sales Performance

Manthan Software Services Pvt Ltd

Page 9 of 33

ARC 6.2 KPI Library

2.2.2 Category Analysis

KPI Title Category Scorecard Business Value This KPI helps users to assess the impact of the merchandise strategies followed and profit generated by each product category. It also of signifies of how fast the merchandise is selling over the period. This KPI is a true indicator of product's sales performance in relation to stock. This enables to assess the impact of the merchandise strategies followed and profit generated by each product category. This also indicates of how fast the merchandise is selling over a period of time. Category Mix Analysis This KPI helps retailer to compare assortment mix with competitors & market and identify categories that needs to revise assortment range. This KPI helps merchandise department to analyze whether increasing the width (or range) of products in a department will help increase in sales. This KPI helps merchandise departments to analyze whether by increasing/decreasing the depth of products in a department, the sales have increased/decreased. This KPI helps a user analyze the velocity of sales of the product in terms of Sales Per Week Per Store. This KPI provides a complete picture of the Never Out Products in each department. It shows the Sales, Sales contribution, growth and SKU growth of never out articles.

Category Sell Through

Breadth Analysis

Depth Ratio Analysis

Category Rate of Sale

Category Never-Out Analysis

2.2.3 Growth Trend Analysis

KPI Title Margin Growth Trend Business Value This KPI helps a user identify merchandise categories whose margins are not complying with the margins over last year and take corrective action. This KPI helps a user identify departments which have higher markdown growth over last year (month on month) and accordingly take corrective action, if required, to reduce markdowns This KPI helps users in tracking the growth of received merchandise for each department. User can check if receipt growth is in line with sales growth.

Markdown Growth Trend

Receipt Growth - Trend

Manthan Software Services Pvt Ltd

Page 10 of 33

ARC 6.2 KPI Library KPI Title Stock Growth Trend YOY Growth Analysis Business Value This KPI provides a complete snapshot of opening stock in stores and product categories, drill down to subsequent levels. This KPI helps a user carry out year-on-year performance analysis of sales, margin, markdown, stocks and purchases.

2.2.4 Item Basket

KPI Title Non Movers Business Value This KPI helps merchandisers to easily identify which SKUs are not moving and occupying the shelf-space by identifying the level of stock each of these SKU's is holding. This KPI helps a user to assess the destination categories and traffic pullers and ensure consistent availability of the fastmoving SKUs. This KPI helps a user to get complete analysis of slow moving items. This enables retailers to evaluate opportunity costs involved in stocking these SKUs and arrive at the best tradeoff between margins earned and the inventory carrying costs. This KPI helps a user get complete analysis of best-selling SKUs. This helps: Merchandising and inventory managers decide on optimum inventory levels for each store. Store and Operations Manager to identify the best visual merchandising strategy to maximize sales.

Fast Movers

Slow Movers

Best Performer

Worst Performer

This KPI helps a user get complete analysis of least-selling SKUs. This helps:

Merchandising and Inventory managers decide on items to be de-listed and in evaluating vendor contribution by store. Store and Merchandise managers to focus on the best promotional strategy to clear existing stock.

Item Sold Below Cost

This KPI helps merchandisers to figure out the reasons for selling items below cost. This could be due to stiff competition or in case of price-match scenario or wrong pricing. This KPI helps user to analyze the SKUs on the basis of brand, color, style and size on critical profit measures.

Item Scorecard

Manthan Software Services Pvt Ltd

Page 11 of 33

ARC 6.2 KPI Library KPI Title Item Count Business Value This KPI provides information on the Total SKU count status in each department and indicates no of active SKUs and inactive SKUs. This KPI identifies Predicted Stock Qty on out date & Average selling price of Style/Color/Product. Based on Forecasted Sale Qty, Pending PO Qty and Stock on hand at various places the KPI will provide what will be the predicted Stock on the out of shelf date of a planned shelf life of a product

Item Life Cycle Analysis Chain

2.2.5 New Item Analysis

KPI Title New Item Stock Analysis Business Value This KPI helps merchandisers to analyze performance of new SKUs in terms of stock they are carrying with respect to sales, Sell thru % achieved, and Quantity sold out per day. This will help them in placing future orders and allocation to stores where it is selling in higher quantities. This KPI helps merchandisers to identify newly introduced items and keep a track on their performance. It also helps in Like for like product comparison introduced in the same period. This KPI helps merchandisers to analyze whether the coverage of new item is justified with the sales. This can help them in deciding whether to further increase or reduce the coverage.

New Item Share Analysis

New Item Distribution

Sale

and

Manthan Software Services Pvt Ltd

Page 12 of 33

ARC 6.2 KPI Library

2.3 Buying
This group signifies budget planning and calculating Open-to-Buy (OTB) value. It helps users arrive at the required monthly spending patterns to support sales and achieve turnover and GMROI. It indicates purchase pattern of merchandise and compares with last year It is created to meet sales and turn expectations. If an organization is under-bought, it risks losing sales. If over-bought, then there is a risk of missing out on developing trends. OTB helps in controlling the flow of product to support the sales plan.

2.3.1 Purchase Analysis

KPI Title Ordered Analysis to Overdue Business Value This KPI helps the user to track the orders placed with various vendors and also helps judge the performance of vendor based on overdue quantities and average lead times. This KPI helps the user track the vendor performance month on month by analyzing the overdue quantity against each vendor. This KPI helps users understand the growth in purchase growth of a department and its vendors. Once can check which vendors have shown highest growth. Also costs or rebates can be negotiated with vendors based on growth in purchase. This KPI helps users to monitor pending orders/expected deliveries distribution for the next four periods vis--vis sales plan contribution for the same period.

Overdue Trend

Purchase Growth Trend

Pending Order Analysis

2.3.2 Open-to-Buy Analysis

KPI Title Open To Buy(OTB) Balance Business Value This KPI helps users in budget planning and calculating Open-to-Buy (OTB) value. It helps users arrive at the required monthly spending patterns to support sales and achieve turnover & GMROI. This KPI helps users in identifying departments by drilling down to sub-sequent levels that have over bought as compared to their purchase budgets and helps in calculating Open-to-Buy (OTB) value. This KPI helps users in identifying departments by drilling down to sub-sequent levels that have under bought and helps in calculating Open-to-Buy (OTB) value. This KPI helps users in budget planning and calculating Opento-Buy (OTB) value. It helps users arrive at the required monthly spending patterns to support sales and achieve

Over Bought

Under Bought

MOM OTB Deviation

Manthan Software Services Pvt Ltd

Page 13 of 33

ARC 6.2 KPI Library KPI Title turnover and GMROI. MOM Rolling OTB This KPI helps users in identifying Open-to-Buy (OTB) value and inventory turns growth on monthly basis for each department drill down to sub-sequent levels. This will help them in planning their merchandise budgets. & Stock This KPI measures sales, intake and hence stock, comparing actual against a plan. It indicates what you need to do to buy the right amount of merchandise to have the correct stock to provide the optimum assortment to satisfy your customers, based on your sales plan. WSSI continuously measures actual performance against plan, and gives you the opportunity to change forecasts, and to change buying plans, if such an opportunity exits Business Value

Weekly Sales Intake(WSSI)

2.3.3 Vendor Performance

KPI Title Vendor Performance Business Value This KPI gives snapshot of vendor impact on the buying process - sales and margins resulting from the quantity purchased from each vendor. This KPI helps the user in tracking vendor performance in terms of compliance with the retailer's quality standards based on goods being returned to the vendor. by This KPI helps in tracking vendor performance with respect to customer satisfaction and quality of goods supplied. This KPI helps in tracking vendor performance with respect to customer satisfaction and quality of goods supplied. Month on month trend can be checked to see if there is a consistent or a one time problem. This KPI helps in knowing the impact of a vendor on the retailer's sales and margin figures and also customer returns %. The retailer has sufficient information to plan for alternate suppliers to spread risk of non-performance. This KPI helps the user to analyze and identify the vendors who have overall higher sell-through. Vendors performance can be judged by this and vendor rationalization can be done accordingly. This KPI helps the user to track the product selling

Returns to Vendor

Customer Vendor

Returns

Customer Returns Vendor - Trend

by

Vendor Scorecard

Vendor Sell Through

Vendor Sell Through Trend

Manthan Software Services Pvt Ltd

Page 14 of 33

ARC 6.2 KPI Library KPI Title Business Value performance of each vendor by looking at sell through month on month. Top SKUs By Vendor This KPI helps the Merchandisers in assortment planning and ordering quantities from vendor. This KPI helps the user check the performance of a vendor in terms of Inventory turns that the products supplied by a particular vendor achieve in the selected time period.

Inventory Turns By Vendor

2.3.4 Vendor Efficiency Analysis

KPI Title On Time-in Full Business Value This KPI helps users in tracking and analyzing vendor performance based on order fulfillment and on time delivery and helps in tracking service levels. This KPI helps users in tracking and analyzing vendor performance month on month based on order fulfillment & on time delivery and helps in tracking service levels. This KPI helps the Merchandisers to compare the performance of vendors in terms of fill rate, on-time rate, and customer returns. It also compares the performance of vendors over last year.

On Time-in Full Trend

YOY Service Rate

2.3.5 Rebate Analysis

KPI Title Rebate Type Analysis Business Value This KPI helps the Merchandisers to analyze vendor's performance on the basis of accrued rebates and help in better negotiation terms. This KPI helps the Merchandisers to track rebates given by each vendor and their effect on margin. This KPI helps the user to keep track of rebates that vendors are giving on a monthly basis and also the rebate growth for each month.

Vendors By Rebate

MOM Rebate Trend

Manthan Software Services Pvt Ltd

Page 15 of 33

ARC 6.2 KPI Library

2.4 Assortment
Assortment planning breaks the Merchandise Plan down into the components that enable the planner to address customer preference and need. These components are product attributes, styles, colors, and SKUs. By addressing these components, the assortment plan becomes the transition to the customer by way of the store

2.4.1 Brand Style Size Color

KPI Title Brand Markdown Business Value This KPI helps the merchandisers to keep better assortment mix and purchase right quantities so as to reduce markdown scenario. This KPI helps merchandisers to provide complete picture of the brand and maintain optimum level of inventory with respect to sales. This KPI is a true indicator of Brand's sales performance in relation to stock. Enables to assess the impact of the merchandise strategies followed and profit generated by each product category. Also indicates of how fast the merchandise is selling over the period. Best Performer Sizes This KPI indicates merchandisers to find out reasons for that Top SKU's Size which have high Sales contribution % but low sales coverage, so that those sizes in the SKU are made available to the stores which are selling them. This KPI helps merchandisers to identify Bottom SKUs sizes. This KPI indicates merchandisers to find out reasons for Top SKU's Color which have high Sales contribution % but low sales coverage, so that those SKUs can be made available to the stores which are not selling them. This KPI indicates merchandisers to put those Bottom SKU colors on promotions and or remove them from some stores to make more space for better selling SKUs. This KPI helps the user to track whether the available stock is aligned as per the recent sales trend. This KPI helps a buyer identify the product sizes that are selling better or lower than expectations. This gives an early insight into potential stock out in case sell thru is higher thereby giving buyer adequate time to course correct.

Brand Scorecard

Brand Sell Through

Worst Performer Sizes Best Performer Colors

Worst Performer Colors

Option Coverage

Size Effectiveness

Manthan Software Services Pvt Ltd

Page 16 of 33

ARC 6.2 KPI Library KPI Title Hot Styles Performance Business Value It helps identify good sellers on the basis of Sell through%. It can be used to check good selling styles or colors or size. High Sell through% suggests that item has good sales potential and thus helps a buyer provide better assortments going forward.

2.4.2 Private Label Vs Brand

KPI Title Sales Margin and Through Comparison Sales Per SKU Comparison Sell Business Value This KPI helps merchandisers in assortment of private labels and branded products during buying process. This KPI helps merchandisers to have better assortment mix of private label merchandise, in case of decrease in sales. This KPI helps merchandisers to have comprehensive view of the performance of private label and branded products by having a comparison amongst them and also compared to last year. This helps merchandisers to take effective decisions on assortment and buying. This KPI provides an insight to merchandisers about the detailed stock information of private label products. This KPI helps merchandisers in placing right quantity orders for private label products (based on sell through) from its vendor.

Growth

Share and Growth Analysis

Private Analysis

Label

Stock

Private Label Sell Through Trend

2.4.3 Item Sales and Distribution

KPI Title Item Selling Distribution Business Value This KPI helps in providing a list of items that were not sold in stores within a selected period. This KPI provides the number of stores that sold or did not sell a particular SKU during specific weeks. This KPI shows the ranking of a product in terms of Net sales, Sale contribution % or sales per store per week. This KPI Identifies the Top & bottom/(strong & weak) stores based on sales, contribution% of departments and classes. This KPI provides performance of all new items since the launch week.

Stores Selling Distribution

Item Ranking Comparison

Store Ranking Comparison

Speed to Market

Manthan Software Services Pvt Ltd

Page 17 of 33

ARC 6.2 KPI Library

2.4.4 Merchandise Range and Analysis

KPI Title Merchandise Range Performance Range Analysis By Season Business Value This KPI helps users to analyze the performance of various types of merchandise based on merchandise type objective. This KPI helps users to analyze the performance of various types of merchandise based on merchandise type objective on rolling season to season basis.

2.4.5 Seasonal Analysis

KPI Title New Product By Season Analysis New Product Growth By Season YOY Season Performance Business Value This KPI helps users to analyze the performance of New SKUs by each season of the year by drilling down to phases. This KPI helps users to analyze the growth of New SKUs by each season of the year by drilling down to phases. This KPI helps users to analyze the performance of each season of the year by drilling down to phases.

2.4.6 Fabric, Fit and Finish Analysis

KPI Title Performance Analysis of 3 Fs Business Value This KPI helps merchandisers in identifying and analyzing which Fits generate maximum revenues and which Fabrics and Finishes are in demand by customers. This will help them in buying right quantities from the vendor. This KPI will help merchandisers in their assortment plan and purchase decision by having more of the fast movers This KPI will help merchandisers in their assortment plan and purchase decision by reducing the slow movers. This KPI helps merchandise department to measure the performance of three item attributes Fit, Fabric, Finish). This will also help them in their purchase process, assortment decision and vendor negotiation.

Fast Movers 3 Fs

Slow Movers 3 Fs

Trend Analysis 3 Fs

Manthan Software Services Pvt Ltd

Page 18 of 33

ARC 6.2 KPI Library

2.5 Inventory
The KPIs under this retail business domain give a complete picture of stock movement across the retail distribution network including returns and help retailers minimize inventory carrying costs, stock-outs and markdowns and maximize GMROI.

2.5.1 Inventory Analysis

KPI Title Inventory Turns By Value Business Value This is a critical measure in retail that face significant pricing and competitive pressures, low margins and fast obsolescence rates. Helps the user to understand the inventory productivity based on sales and inventory value. This is a critical measure in retail that faces significant pricing and competitive pressures, low margins and fast obsolescence rates. Helps the user to understand the inventory productivity based on sales and inventory quantity. GMROI determines the investment in stock needed to achieve a desired gross profit and so relates stock turn to profitability. The stock-to-sales-ratio is used to plan BOM (beginning of the month) stock levels. Gives an indication on the over-under stock position. The KPI helps making optimal use of the rolling inventory strategy and evaluate the savings that this option generates. By This KPI gives complete picture of a departments inventory (based on quantity) movement like opening stock, received stock, transferred, returns, sales and closing stock. This KPI gives complete picture of a departments inventory (based on value) movement like opening stock, received stock, transferred, returns, sales and closing stock. KPI helps user to see check the inventory turns growth month on month. Also user can analyze the inventory turns growth over previous year for each month This KPI helps merchandisers in identifying goods in transit and consequently planning & allocating stock for each department (and sub-sequent levels).

Inventory Turns By Quantity

GMROI

Stock to Sales Ratio Trend

Rolling Inventory

Inventory Quantity

Movement

Inventory Value

Movement

By

Inventory Turns Trend

Stock on Hand Vs GIT

Manthan Software Services Pvt Ltd

Page 19 of 33

ARC 6.2 KPI Library KPI Title Transfers In-Out Trend Business Value This KPI helps the user keep track of the inventory being transferred to and from a location. It can be used to regulate goods movement.

2.5.2 Ageing Analysis

KPI Title Stock Ageing By Value Business Value This KPI gives information about stock ageing. By analyzing stock ageing necessary action can be initiated to clear old/slow-moving stock so that markdowns/obsolescence losses can be minimized. This KPI gives information about stock ageing by quantity. By this KPI analysis necessary action can be initiated to clear old/slow-moving stock so that markdowns/obsolescence losses can be minimized. This KPI gives information about stock ageing by value for each SKU. This KPI analysis helps take necessary action to clear old/slow-moving items stock so that markdowns/ obsolescence losses can be minimized.

Stock Ageing By Quantity

Stock Value

Ageing

Audit

By

2.5.3 Item Stock Analysis

KPI Title Top SKUs By Stock Business Value By comparing Top SKUs stock with its respective sales, merchandisers can take timely decisions like transferring them to other stores, where these are moving. This KPI provides detailed stock information of closing stock by each SKU.

Stock Ledger

2.5.4 Out of Stock Analysis

KPI Title Out of Stock SKUs Business Value This KPI helps the user identify the Out of Stock SKUs at a given store and also check on stock available at the warehouse. User can then initiate stock transfer. This KPI helps the user identify SKUs which have been OOS for the longest period. Going forward user can plan better for these SKUs. This KPI helps the user see daily OOS trend for a given week. User can identify stores or departments where more articles are

Highest OOS SKUs

Day on Day OOS Analysis

Manthan Software Services Pvt Ltd

Page 20 of 33

ARC 6.2 KPI Library KPI Title Potential Out of Stock Business Value getting stocked out on daily basis. This KPI helps the user to identify which SKUs are going to be OOS in near future. Based on the report, user can place immediate orders or take other corrective actions to prevent the stock out. This KPI helps the user to identify the SKUs that get stocked out most frequently. Base stock or replenishment cycle can by suitably altered for these SKUs. This KPI tells the user the value of sales which was lost due to non availability of stock This KPI helps the user to identify articles which are on promotion and became OOS during the selected period. This KPI also tells the user whether the exiting stock of promoted articles is sufficient to last till the end of promotion.

Most Frequent OOS SKUs

Opportunity Cost of OOS Promoted Item OOS

2.5.5 Excess / Short Inventory Analysis

KPI Title Excess-Short Inv Quantity Analysis Business Value This KPI helps merchandisers in identifying departments (and sub-sequent levels) carrying excess or short inventory. This will help in taking buying decisions. This KPI helps merchandisers in identifying SKUs carrying excess inventory. This will help in taking buying decisions and also help identify stocks for clearance. This KPI helps merchandisers in identifying SKUs carrying short inventory. This will help in taking buying decisions and to understand which items need to be ordered on priority.

Items by Quantity

Excess

Inv

Items by Short Inv Quantity

Manthan Software Services Pvt Ltd

Page 21 of 33

ARC 6.2 KPI Library

2.6 Pricing
Organizations make pricing strategy to generate maximum sales and margin. A common strategy is to have price points higher and lower than the estimated volume point. This gives the classification a broader appeal, having something for customers wanting a perceived higher value product or conversely for customers on a tighter budget. This group helps an organization to identify the price-point at which stores makes highest sales. By doing so, it helps merchandisers to plan for assortment at various pricepoints for each store. Price-point trend (i.e. comparison with previous period) is required to track the pricepoint variation, so that right assortment mix can be planned when placing orders from the vendor.

2.6.1 Price Range Analysis

KPI Title Price Range Scorecard Business Value This KPI helps the user to understand the best performing price ranges in terms of Sales and Margin. Assortment mix can be planned accordingly keeping in mind customer's preferences regarding the prices. This KPI helps the user to understand the sales pattern of a price range month on month and also the YOY growth. Based on the trend assortment can be altered to maximize sales and profits. This KPI helps the user to check if the stock in each price range is aligned to the sales mix. A higher Stock to sale ratio suggests that sales are lower than expected and vice versa. User can track the markdown sales for each price Range It helps to correct the pricing going ahead. E.g. If a price segment shows high markdown sales then possibly the pricing of articles in that range needs to be lowered. Helps the user understand the stock ageing by price range. Based on this customized liquidation strategy for old stocks can be devised.

Price Range Sales Trend

Sales and Stock Contribution

Markdown and Pricing Trend

Ageing by Price Range

2.6.2 Price Point Analysis

KPI Title Key Price Points Business Value Helps the user understand the top contributing price points of the department which gives an insight into what the customers are gravitating towards. Helps the user check whether the products have been priced as per customer's expectations. A high full price sell thru suggests right pricing or scope of increasing the price. While a low full price sell thru suggests price correction. This KPI helps operations and merchandise departments to analyze stores and departments with highest Sales, Cost, HO

Price Point Sell Through Analysis

YOY Sale at various prices

Manthan Software Services Pvt Ltd

Page 22 of 33

ARC 6.2 KPI Library KPI Title Business Value Sales price, and Margin. Item Price Variance This KPI helps the user understand at what price is item selling and how many stores are selling within 5% range of the Average Selling Price and how many stores are selling outside the price range.

2.6.3 Markdown Analysis

KPI Title Markdown Analysis Business Value This KPI helps store managers and merchandisers to measure the effectiveness of markdowns on sales. This will also help them in deciding further markdowns. This KPI helps store managers and merchandisers to measure sales performance with respect to markdown performance and growth in markdown sales. This will also help them in deciding further markdown strategy. This KPI helps merchandisers to identify SKUs with high Markdowns and compare them with their respective closing stock to figure out other ways sell them. This KPI helps store managers and merchandisers to measure markdown growth year on year. High growth departments/store can be further analyzed to understand the reasons for high markdown growth.

YOY Markdown Sale

Top SKUs By Markdown

YOY Markdown Growth

2.6.4 Discount Analysis

KPI Title Discount Impact Analysis Business Value Helps the user keep track of the discounts being offered at the store and also indicates the margin earned on these discounted transactions. This KPI helps merchandisers to identify those SKUs with high Discounts and compare them their respective closing stock to figure out other ways sell them. This KPI helps merchandisers to put these bottom SKUs on higher discount, in case of large volume of stock is left at the end of period. This KPI helps merchandisers to identify which SKUs color leads to high discounts. It can help them to rectify color assortment, so as to reduce high discounts and hence increase margin.

Highest Discounted SKUs

Lowest Discounted SKUs

Discount Analysis by Color

Manthan Software Services Pvt Ltd

Page 23 of 33

ARC 6.2 KPI Library

2.7 Promotion
The KPIs under this retail business domain help users evaluate the impact of promotions on sales performance and assess their overall effectiveness based on ROI. Users are able to maximize returns by managing the promotion lifecycle optimally.

2.7.1 Promotion Performance

KPI Title Promo Plan Vs Achievement Business Value Information from this KPI provides a comprehensive view of the promotion performance across the most critical parameters of sales and margin. This KPI helps users to determine profit generated by each promotion and find causes where returns are lower than promotion cost. to This KPI helps marketing and merchandise department to focus on low performing stores by changing promotion strategy and/or promotion assortment mix and take steps to increase sales of high performing stores.

Promo ROI Analysis

Promo Sales

Contribution

2.7.2 Promotion Lift Analysis

KPI Title Promo Lift by Margin Promotion Lift by Sales Business Value This KPI helps retailer to know whether expected margins are achieved with the promotion lift. This KPI helps retailer identify the sales increase based on promotion. He can determine if a promotion has been truly effective if the change in buying patterns induced is longlasting beyond the promotion period. High promotional lift could be due to better promotional merchandise, better offers and or better media channel. This KPI helps users to identify the promotion which has helped in increasing the sales through bill penetration. It also indicates whether a promotion has been truly effective if the change in buying patterns induced is long-lasting beyond the hangover period.

Promotion Lift By Transaction

Manthan Software Services Pvt Ltd

Page 24 of 33

ARC 6.2 KPI Library

2.7.3 Promoted Item Analysis

KPI Title Best Promo Items Business Value This KPI helps merchandisers and marketing department to identify the promoted items that help in increasing sales. This KPI helps merchandisers and marketing department to identify the promoted items that have shown low achievement during a promotion. This KPI helps merchandisers to amend the promotional offers for those SKUs which did not sell on-time across various stores selling those SKUs. Price Helps the user understand the most common selling price of a promoted item and also the highest selling price and also stores selling at common price. Further user can see the promo sales and promo discount for these items

Worst Promo Items

No Sale Promo Items

Promoted Item Performance

2.7.4 Running Promotion Analysis

KPI Title WOW Running Promotions Trend Business Value This KPI helps marketing department to monitor promotion on week to week basis. It also helps them to ensure availability of stock to meet the sales target. This KPI helps marketing department to analyze the performance of running promotions. It will help them in taking timely actions if things are not moving according to the objectives set. This KPI helps marketing and merchandise department. to analyze the performance of running promotions. It helps them in maintaining optimum stock levels for promotions and it also helps in measuring the effectiveness of purchase decisions via sell through%.

Running Promo Contribution

Overall Promo Performance

Manthan Software Services Pvt Ltd

Page 25 of 33

ARC 6.2 KPI Library

2.8 Placement
Space Planning enables retailers to determine the optimum space for fixtures, and merchandise based on the analysis of product placement, usage and performance. A well arranged store display attracts the shoppers, making them to check out the available merchandise, and influencing them to buy the products. Using the available space in a right manner will enable the retailer to accentuate his merchandise and arrange them in an optimum position. Adequate space planning techniques enable the retailer to have end-to-end control of merchandise. This display will attract more customers, minimizes stock outs and operating costs, enables inventory productivity, and increases the financial performance and ultimately more profits for the retail outlet. Retailers can drive top line sales, and achieve good overall returns on their invested amount of capital. Effective planning of the retail space and managing it in a right way is the key factor in the lifecycle of merchandise planning and execution

2.8.1 Space Performance Analysis

KPI Title Space Productivity Index Business Value This KPI evaluates a department or a store based on its Net Sales performance compared to the last year and target figures it identifies if the space allocated to a particular department or store is justified with respect to the sales generated. This KPI evaluates a department or a store based on its profitability performance compared to the last year and planned figures. The index identifies if the space allocated to a particular department or store is justified with respect to the margin generated This KPI is of particular use to the buying & merchandising teams and top management. This KPI evaluates a department or a store based on its quantity sold as compared to the last year and target figures. The index identifies if the space allocated to a particular department or store is justified with respect to the quantity sold. This KPI can be used across all functions. This KPI evaluates a department or a store based on its promo efficiency taking into account the actual sales as compared to the target sales for any promotion. The index identifies if the space allocated to a particular department or store is justified with respect to the sales generated from the promotion. This KPI is of particular use to the marketing department.

Space Profitability Index

Sales Quantity Productivity Index

Promotion Efficiency Index

Manthan Software Services Pvt Ltd

Page 26 of 33

ARC 6.2 KPI Library KPI Title New Product Performance Index Business Value This KPI evaluates the new products in a department or a store based on its sales and margin performance with respect to space. This KPI optimizes the space allocation to any new product which is introduced. This KPI is of particular use to the Buying & merchandising function along with the operations function. The KPI helps higher management to make performance reviews of well performing stores and departments. This also helps to create benchmark for other stores in the same cluster or region.

Performance Analysis By Space Index

2.8.2 Space Performance Trend Analysis

KPI Title QOQ Space Productivity Business Value A time bound KPI used by top management to get an overview of the space productivity of stores and departments on a quarterly basis. A time bound KPI used by marketing to get an overview of the promotion space productivity on a monthly granularity to help in ensuring space distribution for upcoming promotions. A time bound KPI used by the Operations and Merchandising teams to get an overview of the New Product space performance which helps in space allocation decisions.

MOM Promo Productivity

Space

MOM New Performance

Product

2.8.3 Planogram Performance Analysis

KPI Title Planogram Visualization Business Value This KPI doubles up as a planogram viewer present in any planogram software by compiling all the relevant information of a planogram into one report. It helps the operation and store to setup and maintains pre-defined planograms. This KPI helps in analyzing the number of facings of a product and the sales generated as a result. It optimizes the facings through index calculation and maximizes shelf performance. This KPI determines the stock cover for a given period with the existing number of facings. This also helps to optimize the facing in case there is a lag in supply.

Facing Analysis

Shelf Stock Capacity

Manthan Software Services Pvt Ltd

Page 27 of 33

ARC 6.2 KPI Library KPI Title Planogram Productivity Business Value This KPI helps merchandiser and operations team to identify planograms productivity through sales from allocated space. This KPI indicates the sales per unit space (Linear, Square & Cubic) across various granularities. This will help to make space allotment decisions during planogram reviews. This KPI helps to understand space productivity of a planogram through finding fair share of sales and space by various index calculations. This will help to make space allotment decisions during planogram reviews. A time bound KPI used by top management to have an overview of the planogram productivity through various space index. This helps to make required changes while planogram reviews. This KPI looks at the fixture productivity and helps to understand the productive & non-productive zones of a store.

Planogram Performance

MOM Planogram Performance Display Unit Analysis

2.9 Loss Prevention

The KPIs under this business domain help retailers identify potentially fraudulent transactions which fall outside defined parameters. Retailers are able to evaluate various sources of inventory shrinkage including employee theft, shoplifting and vendor fraud and identify hot merchandise categories, and customers with dubious return records.

2.9.1 Shrinkage Analysis

KPI Title Plan Vs. Actual Shrinkage Business Value This KPI helps Loss Prevention department in identifying stores with high shrink values than the plan and take appropriate actions to reduce the shrinkage value. This will help in increasing margins for those stores. This detailed KPI report helps loss prevention team in identifying and focusing on areas causing maximum losses and take measures to curb the shrinkage. This KPI provides a snapshot of margin loss to the company due to shrinkage.

Shrinkage by Type

Impact of Shrinkage

Manthan Software Services Pvt Ltd

Page 28 of 33

ARC 6.2 KPI Library

2.9.2 Exception Reporting

KPI Title Exception Tickets Business Value An exceptional number of high value invoices, if not in line with expectations, signal potential fraud at the point-of-sale. Sales returns normally occur in the event customer returns due to goods damaged, or exchanges. It also indicates which customers make high returns and which cashiers takes returns of same customers. This activity creates suspicion on cashiers who indulge in this type of fraud. Identifying cashiers offering excessive discounts i.e. above the threshold level and serves as a measure of the performance of the store managers. This KPI helps in identifying problem stores and cashiers who have cancelled more than the normal levels thus reduces managerial effort spent in tracking potential fraud and helps in effective cashier monitoring. This detailed report helps to pinpoint the sources of skimming and the extent of loss incurred.

Exception Returns

Exception Discounts

Exception Cancellation

Cash Imbalance

2.9.3 Loss Prevention Classification

KPI Title Hot Stores Business Value The objective of any retailer is to not only reduce the average shrinkage but to also reduce the number of stores generating rates of shrinkage above the norm. The social geography of a stores location is likely to be a significant factor that affects the level of shrinkage. This KPI helps in identifying such stores. This KPI helps the user to identify the products which are more prone to shrinkage.

Hot Products

2.9.4 Refund and Void Analysis

KPI Title Refund Analysis Business Value This KPI will help LP department to easily identify the cashier who is doing the refund and till where refund is happening the most. It will help them find out the cause for higher refunds and take adequate steps to curb losses e.g. Install a CCTV camera on the check-outs. This KPI will help LP department to find the causes of cash shortage at the till.

Void Analysis

Manthan Software Services Pvt Ltd

Page 29 of 33

ARC 6.2 KPI Library KPI Title Void Vs Shortage Business Value This KPI helps LP department to easily identify stores with high number of No-Sales transactions and compare with cash shortages. This helps them in investigation and also during audit time. LP departments can take effective measures like high security authorization codes at their POS system for various levels of store staff. This KPI will help LP department to find the causes of high refunds. There may a need for more training to cashiers or there may be fraudulent cash returns performed by store staff. Adequate steps should be taken to control these losses. This KPI helps LP department to identify the stores closing after certain time and verify the transactions happening after closing hours. This KPI helps LP department to take action on store managers giving higher discounts to an employee than the company's policy. This will also help in increasing margins. This KPI helps the user to see the products where price override is taking place along with the transaction level details of the override.

Top Refunding Cashiers

Out of Hours Transaction

Employee Discount Analysis

Price Override Transaction

2.10 Mining

2.10.1

Sales Forecasting
KPI Title Business Value This KPI tells us the magnitude of deficit of Projected OOS SKU. Helps user to determine which products might be OOS in the current forecast This KPI measures the forecasting performance by Department. User can check the forecast accuracy based on the merchandise range available in the department This KPI measures the accuracy of different forecasting algorithms. Determine how much the forecast differs from each algorithm on the same product

Sales Forecast Vs Order availability

Department Analysis

wise

Error

Algorithm Accuracy

Manthan Software Services Pvt Ltd

Page 30 of 33

ARC 6.2 KPI Library KPI Title Forecast Accuracy Trend Business Value This KPI measures the trend on accuracy of a particular algorithm. Analyzing the trend on a week on week based forecast. Understand the consistency of algorithm which are independent This KPI will identify, accuracy of algorithm by finding how many weeks the SKU was positive or negative bias. Use the right forecast algorithm by analyzing the forecast trend which has the higher positive bias The KPI analyzes the forecast error between actual sales and forecast quantity. Analyzes variation between actual sales and the forecast qty. Reasons for high variance or error can be further probed into This KPI Provides the Sales Forecast Output from the Forecasting Mining Model for the various Algorithms

Forecast Bias

Sales Forecasting Error

Sales Forecast Output

2.10.2

Product Affinity
KPI Title Business Value This KPI helps the user identify the best product combination based on Support for that Product Combination This KPI helps the user identify the best product combination based on Lift for that Product Combination This KPI helps the user identify the best product combination based on Confidence for that Product Combination This KPI helps the user to identify the strongly associated products in terms of lift for a selected product. User can Promo Combos or plan product placement based on this This KPI helps the user to identify the strongly associated products in terms of Support for a selected product. User can Promo Combos or plan product placement based on this This KPI helps the user to identify the strongly associated products in terms of Confidence for a selected product. User can Promo Combos or plan product placement based on this

Top Product Combination by Support

Top Product Combination by Lift Top Product Combination by Confidence

Top Target product by Lift

Top Target Support

product

by

Top Target Confidence

product

by

Manthan Software Services Pvt Ltd

Page 31 of 33

ARC 6.2 KPI Library KPI Title Affinity Association Business Value This KPI helps the user to analyze the output of the Product Affinity Model and analyze the association between the Base and target products. Analyze the affinity association and provide promo combinations and better product placement based on Support, Confidence and Lift This KPI helps the user to analyze the output of the Cross shopping analysis Model and analyze the cross shopping behavior. Analyze the Cross shopping behaviour and propose the best promo bundling and better product placement

Cross Shopping Analysis

2.10.3
ABC Rank Codes

ABC Analysis
KPI Title for Vendor Business Value Provides Vendor wise Ranking in the order of A, B and C based on vendor performance metrics. Provides Vendor wise Ranking in the order of A, B and C based on vendor performance metrics This KPI helps user rank the item as A, B, C based inventory position. Helps to understand and analyze the overall inventory position of each item This KPI Helps understand the sales profile for different ranks assigned to the items. Analyzes the Sales profile of the item with different ranks assigned by department as well as Store This KPI checks Stock on hand and On ordered Qty levels for each rank of SKU. Analyze whether sufficient stock is available on hand for high ranked items and liquidate excess stock for low rank items This KPI analyzes which vendors produce SKUs with higher ranks and which provide lower rank SKUs. Vendor Evaluation based on ranking of SKU they supply This KPI shows the trend in movement of ranks for items between specific time periods. This KPI shows the trend in movement of ranks for items between specific time periods

Inventory Analysis by Rank

Sales Analysis by Rank

Stock and Ordered Qty by SKU

Top Vendors By SKU Rank

Version wise Item Ranking Trend

Manthan Software Services Pvt Ltd

Page 32 of 33

ARC 6.2 KPI Library

2.10.4

Product Rationalization
KPI Title Business Value This KPI helps the user analyze the Stock Position of Items which have been marked as Delete and analyze the impact of liquidating those stocks which will be pruned off from the Assortment This KPI is a validation point for deletion criteria of an item. This KPI helps user to analyze whether the article is flagged as "delete" in all versions or was it just an exceptional case This KPI indicates penetration of the delete article and its significance in different stores. This KPI indicates the significance of the delete article in different stores based on its coverage and sole purchase occurrence

Stock Liability of Delete Items

Version wise Item Status

Delete Item Coverage

Manthan Software Services Pvt Ltd

Page 33 of 33