Measuring retail conversion rates of physical stores is just as important as measuring
Having a brick and mortar store is such a huge investment that you’ll need to make sure they’re bringing in the as much money in as possible.
That’s where optimizing
When you track and measure retail conversion rates effectively, you can
Before we get into how to measure the conversion rate in retail, and how you can improve it, first, let’s answer the question of what it actually is.
Let’s go over a few central concepts related to retail conversion rate.
Foot traffic quite literally refers to the number of people walking into your physical store. You can set up an automated foot traffic counter for this purpose.
Everyone aims for heavy foot traffic, but for some, that’s just not possible. If your daily visitor numbers aren’t that high, don’t worry. We’ll go over a few ways to lure in potential customers.
Customer experience plays a central role in increasing the number of sales. The term refers to how people feel they were treated at your store.
The following aspects influence the in-store customer experience:
To get a better customer experience, you’ll need to nail down most if not all of the aforementioned aspects.
To put it very simply, the retail conversion rate is a measure of how many people that came to your store actually bought something.
It’s usually stated as a percentage.
Calculating the conversion rate for your store is easy.
Take the number of store visitors within a period and divide it by the number of purchases made during that period. Then multiply it by a hundred to get the percentage.
So, if 1,000 people visit your store in a single day, and 100 of them bought something, you’d have a conversion rate of 10%. (100/1000 x 100% = 10%)
Today we’re going to run you through step by step how to measure your conversion rate, and how you can use it to make improvements to your business.
The conversion rate in retail will be different depending on the type of store you operate and your location. For example, a local convenience store might see conversion rates as high as 95%, while a luxury, boutique jewelry store will be much lower.
So we’d recommend doing a little research before you start to measure your own conversion rate. Find out what kind of rates are the average in your industry and use it as your baseline to work from.
If you work in a very niche industry with no benchmarking data available, you might want to record your conversion rate over the course of a week to give you a number to improve on.
If you run a small store that doesn’t receive a lot of customers, you can do this the old fashioned way, with simple pen and paper. But, getting an accurate count can be quite difficult for larger stores. Many retailers don’t want to assign a staff member to the door to manually count customers, so many are turning to technology.
Luckily, we’ve seen great improvements in tracking technology in recent years. They range from basic sensors that count the number of people entering your store, to more complex cameras and optical sensors that track additional movements
One interesting piece of tech even allows you to track customers by the signal strength on their mobile devices. This is less intrusive than a camera and shows you which direction people take in your store, where they spend the most time and which displays they stop next to.
Whichever method you use to track customer numbers, try to eliminate sales staff, customer’s partners and children of your customers to give you a more accurate count.
Conversion rate in retail goes hand in hand with your average transaction value. Start by calculating the total number of purchases during the day, then measure the average cost of each purchase. If you can improve your conversion rate you’ll see a significant boost in sales.
If you have a large department store where customers might make different purchases from different checkouts, try to track them via purchases made with a credit card so you don’t skew your numbers.
It’s not enough to just measure the number of customers and how much they spend though. The more you can analyze customer behavior, the more likely you are to increase your conversion rate. Some common methods include:
Once you have an accurate conversion rate in retail, you can use this as a benchmark to test the effectiveness of your advertising campaigns. Record your benchmark conversion rate before you start your new campaign, then compare it to the figures you get once it’s started. Did your footfall and conversion rate increase? If not then it means your advertising might not be effective.
Don’t forget to use the other methods of analysis mentioned in point 4 in conjunction with your conversion rate too. Maybe your advertising campaign was successful, but people were put off by long lines or the fact that your top products sold out quickly?
While it’s important to measure conversion rates and track customer behavior, there are a few tips and tricks you can implement right now to help improve your conversion rate too.
The conversion rate in retail isn’t an exact science. Your customers are individuals, and it’s difficult to consistently predict human behavior.
However, if you have accurate customer numbers and conversion rates, and have a detailed analysis on how your customers are spending time in your store, you’ll be able to start taking steps to improve your conversion rate today.