Traditional Retail Performance Metrics Aren’t Measuring Up

Time to Adopt Next Genalytics

The pace of change in retail has never been faster than it is now. Couple that with disruptions, big and small, and it’s not surprising that consumers are now even more unpredictable than before. 

In a recent Logility blog post, Richie Proud, vice president of planning and inventory at Curaleaf, said this about the upheaval in the retail fashion sector: The digital transformation of the fashion industry has been immense over the past 6 months. Almost all companies that I speak with are ecstatic over their e-commerce sales, but readily admit that the growth in e-commerce does not offset the decline in brick & mortar stores. This divide will only increase as we enter the make-or-break time period of Q3 2020 and Q4 2020 – as we have never experienced a “COVID Black Friday.” Traditional thinking would have teams placing deep buys of highly promotional items to be ready for the onslaught of in-store shopping starting the week of November 22, 2020. But recent sales data has shown us the public is still hesitant to return to malls, however they fully embrace the digital experiences offered by many retailers. 

New market dynamics should spur the retail industry to seek new ways of measuring performance. It may not be the news you were hoping for, but traditional retail success metrics are fast becoming obsolete in today’s economy. The Internet has changed how business is done, but brick-and-mortar businesses remain. In fact, go-to-market strategists have elevated their game by adopting a channel-agnostic focus as opposed to a binary physical-versus-digital orientation.  

It’s difficult to state the case more clearly and succinctly than Matthew R. Shay, president and CEO of the National Retail Federation, does here: While retail continues to evolve and adapt to changing consumer preferences and new technologies, it is increasingly critical to develop newer, more relevant metrics to accurately value and measure retailers. The current suite of metrics were built for a time that no longer exists. The lines between channels have blurred beyond recognition, making it challenging to properly attribute a sale with these outdated metrics…we need a common set of updated metrics that more accurately measures retailer performance and captures the full value that retailers are creating.  

The processes, tools, and analytics that we’ve relied on in the past — like sales and inventory turns — will no longer be sufficient to move us forward. At the same time, our fundamental goals have remained constant: providing compelling customer offerings, optimizing inventory placement, and converting that inventory into cash.   

This predicament reminds me of the situation faced by Oakland A’s GM Billy Beane and his quant-jock sidekick Bill James in 2002, when the New York Yankees were spending $140M a year on players to the A’s $40M. Knowing they couldn’t match New York’s money, Beane and James attacked the problem with metrics. Throw in a Michael Lewis book and a Brad Pitt movie, and you have Moneyball.  

It’s become somewhat fashionable to find flaws with Lewis’s portrayal, but Beane’s creativity and bravery aren’t questioned. Without completely discarding traditional baseball performance measurements like home runs and RBIs, he set out to find new metrics that would help him build a competitive team of largely undervalued players. On-Base Percentage, for example, turned out to be a strong predictor of success. His commitment never wavered. When the A’s manager balked and played expensive, free agent veterans instead of Beane’s hand-picked “affordable” players with a knack for getting on base, Beane traded away the veterans.  

Retail needs a Moneyball moment. It’s time to leverage the vast amount of data available to us and create revolutionary ways of measuring value, gaining insights, and driving customer demand. Logility is at the forefront of this movement with its next generation of analytics, called Next Genalytics.  

Next Genalytics isn’t a one-size-fits-all prescription for retailers. There is no mandate to focus on X, ignore Y, etc. Rather, the concept has built-in flexibility. The metrics you choose to develop, and track will likely be based on corporate lifecycle stage (i.e. maturity) among other variables. A young business may determine that customer acquisition and sales per unique customer are critical drivers of success while a mature business might focus on free cash flow. 

The point and the promise of Next Genalytics is this: there are modern, proven tools to help deliver on your analytics needs. Technology is not the limitation. Imagination, creativity and perseverance constitute the first hurdle. The second is capturing the data you desire.  

Relying solely on traditional retail performance metrics won’t work. Time for action. Now, let’s play ball! 


The Future of Retail Metrics. Sides, Marsh, Hobbs, Furman. Deloitte Development LLC. 2019. 

Jonathan Doller

Written by

Jonathan Doller

Short bio

Senior Business Consultant - Jonathan Doller embraces his role of “trusted advisor” to help customers transform technology into solutions that solve business challenges. He brings 20 years of experience working with companies around the world to make complex initiatives simple and intuitive. Supply Chain Brief