What is Units Per Transaction (UPT)
Units per transaction (UPT) is a sales metric often used in the retail sales sector to measure the average number of items that customers are purchasing in any given transaction. The higher the UPT, the more items customers are purchasing for every visit.
BREAKING DOWN Units Per Transaction (UPT)
Units per transaction can be calculated on a day-by-day basis or over a longer period of time. It can be measured across individual stores and employees or company wide. A basic UPT is calculated by simply dividing the number of items purchased by the number transactions for the period, but there is certainly a range of factors to consider when determining how to calculate a UPT for a given situation.
Understand Why You Need to Calculate Units Per Transaction
The time period for your UPT calculation is important. For instance, measuring UPT on a monthly basis would allow you to track changes month to month, year to year and on a seasonal basis. You might also want to figure out UPT for a specific location so that you can identify market areas where customers tend to purchase different numbers of items when they shop. Another approach is to track items per sale by employee as a measure of sales performance.
Collecting UPT Data
Any data collection methodology needs to be accurate, and data should be collected daily on items sold and transactions. Depending on your specific objective, you may need to break the figures down by area or by employee. Add up all the items sold for the period for which you are calculating units per transaction. Do the same for the number of transactions.
Calculating Units Per Transaction
To calculate UPT, divide the units sold by the number of transactions for a given time period and location. For instance, if you're measuring employee sales performance, you might measure that one employee made 30 sales with a total of 105 items, a second employee sold 105 items in 35 transactions. Thus, UPT for the first employee is 3.5 units per transaction, and UPT for the second employee is 3.0 units per transaction.
Increasing Units Per Transaction
Many experts agree that increasing units per transaction is often what determines success versus failure for the small to mid size retailer. How best to do this hinges primarily on understanding and engaging with your customers. By developing this sort of understanding, customers are more likely to enjoy their experience and buy add-ons to their primary product, which is a tried-and-true way to raise UPT.