Have you had your eye on fitting room technology but just aren’t sure you can justify the cost?
It’s a big decision to invest in new technology for your retail store. Not only do you need to budget for the hardware and software, but you also need to plan for the time and energy your team will need to spend to get used to working with the new fitting room process. Although there is a short learning curve, the long-term benefits outweigh the costs.
Here is a little bit of insight into how you can build your profits after that initial investment of time and energy.
In a retail store the fitting room is where the buying decision is made. Use of the fitting room is a massive predictor of shopper conversion rates and other important Key Performance Indicators (KPIs) for the brick and mortar apparel retailer.
When a shopper only spends time on the sales floor, they are less likely to become a buyer. Shoppers who use the fitting room are more inclined to make a purchase. The shoppers who are assisted in the fitting room are even more likely to become buyers.
Sales floor shoppers are only about 10% likely to buy versus fitting room shoppers at 67%.
That’s according to 2010 data from Envision Retail Ltd. Assisted fitting room shoppers convert at even higher rates.
The exact amount that your bottom line will improve by encouraging shoppers to try on clothes and assisting shoppers in the dressing room depends on your margin and your average dollar sales (ADS).
Here’s an example. A shopper who stays exclusively on the sales floor might be worth $48.02. If a shopper with that same spending power goes to the fitting room, they will spend on average, $95.12. And, if a shopper receives assistance in the fitting room, they are more likely to spend $130.07. (Data generated from Alert Tech based on several years of client research.)
That equates to almost double the spending from the shopper who tried on the clothes, and approaching three times the spending from the shopper who had help while in the fitting room.
Case Study: More Fitting Room Visitors Help Stores Meet All Goals
Your store’s performance is based on how well you meet or exceed conversion and sales goals. While there are various components of a retail store that may affect results, there is little knowledge around which elements of the fitting room experience influence sales and conversion in retail stores.
Alert Tech estimated that the independent fitting room variables would significantly influence the following goals:
• Conversion Rate Goal – 25%
• Units per Transaction Goal – 3.5
• Average Dollar Sales Goal – $65
The greatest factor in predicting a store’s ability to reach its conversion goal was an increase in the percentage of store traffic that entered the fitting room. No other fitting room variable was as influential over goal attainment.
Even just a small increase in store traffic entering the fitting room increased the likelihood of conversion goal attainment, according to Alert Tech’s findings. The study showed that for every 1% increase in total store traffic that used a fitting room, the chance of meeting a 25% conversion goal increased by over 700%!
ADS was significantly impacted too. There was a $36 increase in the average transaction value for every 1% increase in total store traffic that used a fitting room, according to the Alert Tech study.
Another factor that increased average conversions was the call button; the more a customer used the call button, the higher their transaction value. In our study, every 1% increase in total number of activations of the Sense System call button in a fitting room produced a $9 increase in average transaction value.
These KPI increases were over and above (additive to) those seen from simply increasing fitting room visits.
While every retailer will have a unique set of goals, Alert Tech determined these goals based on industry standards for the mall-based retailer in this study. Also notable is that the study results are specific to the defined goals. Still, it is likely that the findings are applicable for comparable retailers with similar goals.
Fitting Rooms Also Impact Return Rates
“No buying decision is final until the try-on is complete.”
Apparel purchased online is returned at a very high rate, primarily due to the fact that the consumer hasn’t had a chance to try on the clothing.
Customers who shop in-store but don’t use the fitting room have a return rate similar to that of online shoppers. This is as high as almost 50% in some cases.
Beyond the Monetary Returns
The numbers are clear. Conversions increase with more fitting room traffic and more assistance in the fitting rooms.
Beyond the financial returns, there are other benefits to using Alert Tech technology.
- Increased brand loyalty. Once your customers become comfortable in your clothing, they are more likely to return to your store for future purchases. The fitting room (not the checkout line) is the ideal place to discuss loyalty programs and get your customers signed up for rewards.
- More accurate insights. You want to know what’s happening in your fitting rooms. With Alert Tech, you can implement a consistent experience among customers, see which sales people outperform their colleagues, and gain better insight into what your customers try on and prefer from your product line.
- Easier scheduling. Do you ever worry that you have too many associates on the floor? Too few? Alert Tech will show you how many people you need on hand to help your customers and convert shoppers into buyers.
- Streamlined fitting room management. A lot goes on in a fitting room. You want to keep your customers happy, reduce shrink, and keep the line moving. With Alert Tech, the process becomes more efficient so your staff stays happier, your customers have a positive experience, and your store converts more consumers.
You know that washing your windows and cleaning your floors are vital to your overall brand impression. Taking care of your fitting rooms is just as important.
Alert Tech customers achieve significant increases in conversion rate, UPT, and ADS. The exact amounts you should expect will depend on your current margin. But one thing is certain: With Alert Tech implemented properly, your customers, employees, and sales reports will see a positive increase.