This blog post will outline why traffic or footfall data along with conversion data is so important for retailers to gain a deep understanding of their business.
Retailers are well aware that each day, they have customers who walk into their store, usually with a goal of purchasing a particular product, however for various reasons, they never do make that purchase. Such a customer will not be picked up by your store’s revenue metrics, therefore without any other analytical tools, the existence of this customer is unknown. With retailers spending a large amount of money on luring customers into their stores, it’s important to also investigate why some customers leave without making a purchase.
The first step to understand how many customers are walking into your stores is to gather traffic data. It’s a challenge however, to gather traffic data that is highly accurate. You might be surprised to learn that even those retailers that are capturing foot traffic are often using highly inaccurate tools to do so. For instance, there are some retailers that employ staff to stand at the entrance and use a manual clicker to track people entering the store. The accuracy of this data is questionable. For example, a member of staff using a manual clicker might be distracted, or easily overwhelmed by a busy store and is likely to fail to track the correct number of people entering the store.
Other retailers use outdated infrared people counters that are positioned across an entrance and counts every time a person crosses the beam. Such a system fails to differentiate whether the person being tracked is a customer or a member of staff. Both infrared and manual counting systems fail to track when a particular person has entered the store and the amount of time spent there. It’s important therefore, to select a smart people counting system.
The next step in gaining a full understanding of your retail business is to calculate your conversion rate. To calculate a conversion rate, divide the total number of unique sales by the total number of unique visitors over a set period of time. The result will be your store’s conversion rate for that period. As an example, say your store has 400 visitors a day, and 40 of those visitors make a purchase - your conversion rate will be 10%.
You might now wonder why the other 350 visitors have not made a purchase. It is by gathering accurate traffic data and then comparing it to the amount of unique sales that you can immediately become aware of all of the missed opportunities. By completing such an exercise, you can then take the steps to improve your conversion. A way that many retailers look to achieve this is by increasing the number of floor staff and providing staff with sales training. After implementing such tactics, it’s then a good time to measure if your sales conversion rate has improved.
As outlined above, it’s clear that the secret to truly efficient retail growth is to accurately gather and then effectively analyse retail footfall traffic and conversion data. Gone are the days of basing retail decisions solely on revenues and what you sell.
Ocucon is dedicated to developing retail technology solutions. We’re constantly listening to our customers to add additional features and capability to our latest product, OCCUPi. Utilising the latest Deep Learning technology and advanced people detection, OCCUPi is a multi award-winning automated occupancy management solution that is highly accurate.