What is Velocity in Retail? Explained

In the retail industry, velocity typically refers to the speed at which products move through the supply chain or off the shelves and into the hands of consumers. It is a key performance indicator used to measure the efficiency of inventory turnover. High velocity indicates that products are selling quickly, which is often desirable for retailers to prevent overstocking and ensure a steady cash flow. Monitoring velocity helps retailers optimize inventory levels, identify popular products, and streamline supply chain processes to meet customer demand effectively.