Benchmarking Retailers

using statistical tools

Benchmarking and its explanation

 Allows to measure and compare the performance of the company in terms of

SG&A and Key Performance Indicators.
 The performance is measured internally; comparing performance to previous
year and with budget.
 The data's are compared with retail categories, such as Apparel, Grocery and
Specialty to ascertain opportunity areas to improve performance and reduce
cost.
SG&A %*
 Human resources
 Finance
 Marketing & advertising
 Merchandising
 Store operations
 Supply chain
 Information technology
 Corporate services
 Real estate
 Legal
 Non-merchandise procurement
 Store expenses
KPI’s
Average sales/sq. ft.
Comp sales vs. previous year
Merchandise gross margin %
Inventory turns
GMROI
Store labor % of store sales
Store occupancy % of store
Sales
Conversion rate – store
Conversion rate – online
Marketing spend percent of sales
 The above sub-items of General and administrative expenses and KPI’s are
measured and benchmarked against peer companies to know the individual
performance and improvement areas.
Eg:- Under Retail industry Apparel, Specialty and Discount stores will be
benchmarked on the basis of store occupancy as a percentage of sales.
 The benchmarking methodology used here is Quartiles and median
 Upper Quartile = ¾(N+1)th term
 Median = (n+1)/2th term
 Lower Quartile = ¼ (N+1)th term