Most retailers are missing massive opportunities by woefully underutilizing one of the most critical numbers: The conversion rate of visitors to buyers. Are you surprised?
Retail conversion is probably the most crucial metric for retailers.
Case Study: How Retail People Counters Can Save a Business
One International store found that out the hard way. After this store had got hit by a steep decline in business due to external economic factors, it took steps to understand better what was happening in each of their stores. They installed retail people counters and started people counting.
Over time, the store saw that over half of all customers left without purchasing. They also noticed that they were paying more than they needed to by staffing the store during slower hours.
After making a few adjustments and monitoring their conversion rate of visitors to buyers, this International store’s performance skyrocketed:
- They adjusted lunch breaks, leading to a 16.5% increase in conversion rates;
- They focused on customer service instead of tasks, which resulted in a 9% increase in conversions during peak hours;
- They noticed that when store managers were out of sight, conversion fell by 5%.
“All retailers need to measure traffic and customer conversion in their stores. If you don’t, you’re flying blind,” according to Mark Ryski, author of Conversion: The Last Great Retail Metric.
For your store to see these same benefits you need to monitor traffic and conversion as closely as possible – preferably in real time.
What Results Can You Expect from Retail People Counting?
“Every hour of every day, prospects visit your stores but leave without making a purchase – despite the fact that they intended or were predisposed to buy,” Ryski points out.
If you’re like many retailers, you might be thinking that you already know all this information. You probably feel like you have a good grasp on what’s going on in your stores, and you might. But tracking traffic will amplify the results you’re already realizing.
What precisely can you learn from people counting and tracking conversions? Turns out, more than you might think.
People counting give you a more accurate glimpse of what’s happening with your business. Here are just a few of the things you can learn and use to grow.
- How your stores are performing. Is one performing better than another? This is valuable information when you’re expanding or downsizing.
- What high-performance stores are doing differently than low-performance stores? Learn so that you can implement these strategies across the board and build profits.
- How to improve sales performance. If all your stores are using the same marketing tactics, maybe it’s your sales team that needs to improve.
- How you can cut costs. Stop wasting your money on strategies that aren’t working.
Better performance and lower costs are just some of the benefits that make people counting worth the effort. Do you agree?
The Essential Formula for Retail Success
The formula for retail success is pretty straightforward:
- Get people in your stores
- Then get people to buy when they are there
The trick is to use this information to glean insights and make improvements that bring results.
Every time a person walks into your store, you know that your advertising made an impact. As they walk around, pick up items, engage with your sales representatives, and explore your store, they have an intent to buy something. When they walk out with empty hands, you lost a valuable sale. Why?
The why matters. That one person has a network of fellow shoppers. What did she tell her friends about her experience in your store? Could that stop other potential buyers from coming into your store in the future? How many other sales could you lose because of that one transaction?
Knowing how many people visit your store and how many people make a purchase kickstarts the answers to those questions.
Simplifying the available data gets you back to the basics of why you’re in the business. To serve your customers by driving them to your store and selling them something they need.
Why The Conversion Metric is So Crucial
Let’s face it. Big data is overwhelming. The retail industry spends over $20 billion on business intelligence. There’s just one problem. Even with all the sophisticated tools and systems at your fingertips, it’s a challenge to pull out the practical meaning behind the numbers.
Do you see the value from your investment in retail technologies? If you are, congratulations! If you’re not, it’s time for a change.
Sifting through massive amounts of data is costing you time and money. Instead of overwhelming yourself, focus on bite-sized amounts of the right data. By having a relentless focus on conversion numbers, you will yield a major bang for your buck. It’s simple, yet incredibly powerful.
Don’t believe it?
One way to see the value is to use an analogy presented by Paco Underhill, author of Why We Buy.
Think of conversion rates as batting averages. Your hits are buyers and your times at-bat are the times someone walked through your store doors. You might have one hundred hits but if you don’t know how many times you’ve been at-bat, you don’t know how many opportunities you’ve missed.
Or, as Underhill says, “you don’t know if you’re Mickey Mantle or Mickey Mouse”.
Your traffic numbers show you how many sales opportunities you have. Your conversion numbers show you how well you’ve performed when given those opportunities.
What You’ll Learn By Retail People Counting
There are many impressive uses of people counting. Some of the top questions you can only answer by people counting include:
- How effective are your marketing campaigns?
- How productive are your stores?
- What are your “power hours?”
- How should you staff your store to match the influx of traffic?
- How can better line management improve your conversion rates?
Most of all, you’ll learn your store’s batting average. Does it need to be increased? With people counting, you’ll discover how to make that batting average come up and bring in thousands of dollars more to your business.
[Tweet “Why Retailers Absolutely Need People Counting #retail @margelaney”]
The Bottom Line
Traffic and conversions are not hard to calculate if you count people.
Tracking this vital metric over the course of a month or year can translate into a boost in total sales. Even a modest increase in conversions has a massive impact on your bottom line.
So really, the question is, can your retail business afford not to people count?
Download Our Free Guide to Retail Analytics: Beyond People Counting