What Is Average Dollar Sale?
Average Dollar Sale (ADS) is a retail metric term used to calculate the correlation between sales and transactions for a given period of time. Simply put, it’s gross sales divided by paying customers over an hour, day, week, etc. For example:
Why ADS Is an Important Metric
It’s valuable to constantly monitor your ADS for the simple story it tells. The ADS is one of the fastest metrics you can use to grow retail sales.
This report measures how effectively all aspects of your supply chain (from shipping to salesfloor employee) get the product to the customer.
The more efficient your system, the more likely your product will be in front of (and appeal to) the customer.
Ways of Increasing the ADS
More sales mean a better bottom line. Targeting your ADS can have a direct impact on sales for the year.
When looking at ways of improving the ADS, consider what other business leaders have done:
- Raise the price: It’s not always the most popular, but it’s the simplest way to raise ADS. A small increase in a single item can have the positive bump you need over time.
- Create bundles: Customers are always looking for a bargain. Studies show they will spend additional money if they feel they’re getting more for their money. Bundle items at one price point if possible.
- Change your product: Always look for ways to improve your initial offering to draw new customers and cause the loyal to buy more.
- Suggest add-ons: Selling televisions? Cross-merchandise with TV stands and HDMI cables for an increased register ring.
- Look closely at the numbers: Is a daily ADS higher when Sally works and lower when Tom works? Your problem may be more than the product! Recognize the story your ADS tells you about your people, product, hours of operation, promotions, and seasonality.
Bottom Line: It’s About the Bottom Line
The old retail mantra is “sales cures everything.” When trying to add those sales dollars to the bottom line, begin with the solid foundation of your ADS report. One analytic review may yield the simple solution you need.