How People Counting Data is Used to Increase Sales Conversion Rates

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  2. 2015
  3. February

Image of young businessman pulling graph. Chart growth conceptThe process of converting shoppers into buyers is practically the definition of a “business basic.” For retailers, measuring (and hopefully increasing) their sales conversion rates is dependent on access to consistent, reliable store people counting data.

Basic people counting solutions, such as those installed only at a store’s entrances, can provide the raw numbers for calculating a store’s overall conversion rate. It’s simply the percentage of shoppers in the store who actually purchase an item at the point-of-sale. But to truly understand what moves the lever for sales conversions, more detailed people counting data – generated by overhead people counters as well as those placed in key locations throughout the store – is required.

Creating effective promotions and displays, and placing them in optimal locations within your store, is a proven technique for improving conversion. People counting data can help these efforts in two ways. One is by mapping how customers currently shop your store. Knowing where the high- and low-traffic areas are, is essential to placing promotions so that they generate maximum impact.

Retailers can use A/B testing to compare factors such as display design and placement. (A/B testing is simply an experiment with two variables, “A” and “B”.) In a store setting, a retailer might test Display Style A for three days, then test Display Style B for three days. Comparisons of people counting data and sales will reveal which display attracts customers and, more importantly, results in purchases. Because it’s important to control for any outside factors that could affect an A/B test’s outcome, each test period should cover the same three days of the week (e.g. two successive Friday-to-Sunday periods).

People counting data can also boost sales conversions by pinpointing customer service issues. If a store’s foot traffic is heavy but sales are slipping, the problem might be that not enough associates are on hand to help customers find the items they need at peak times. Or shoppers may be finding the items they seek, but leaving in frustration without completing their purchases because they can’t find a manned POS station.

Diagnosing and remedying these customer service situations is critical to maintaining solid conversion rates. People counting data that charts peak times of day and days of the week, as well as year-over-year historical data that records the impact of holidays and special events, provides retailers with invaluable insights about how many (and what kind) of associates to schedule. With this information, retailers can maximize conversions while still keeping a tight rein on labor costs.

Improved understanding of when customers visit a store can also help retailers time their promotions more precisely. If certain holidays bring people into a store, use this as an opportunity to promote items you want to expose to a larger audience. If store crowds swell at lunch time, after work, or on the weekends, plan time-limited promotions that take advantage of each store’s customer traffic profile.

Finally, continue to use people counting data to measure conversion rates’ swells and dips over time. Keeping close tabs on this vital sign is imperative to the health of any retail establishment.

Four Truths Revealed with Timely Traffic Data

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  2. 2015
  3. February

Truth Red Square Grunge Textured Isolated StampFor retailers, restaurants, and other establishments that rely on customer traffic to survive, measuring the health of the business on a day-by-day (even an hour-by-hour) basis is critical. Reports from the point-of-sale (POS) paint part of the picture, but they need to be combined with timely traffic data to reveal four key truths:

1) High and low traffic periods

2) Labor management efficiency (or lack thereof)

3) True sales conversion rates

4) True success of promotions, displays, and exhibits

High and low traffic periods: Sales reports and periodic counts made by employees provide a general sense of what times of day/days of the week are busiest, but they are imprecise measurement tools at best. Traffic counting solutions capable of gathering timely traffic data – including how many people come into a store or restaurant, when they enter and exit, which entrances they use, and how they move throughout the location – establishes a data baseline for several key performance metrics. In addition, consistent measurement over time reveals the customer traffic impact of outside conditions such as weather, construction in the area, or nearby sporting or entertainment events.

Labor Management Efficiency: Because personnel costs are typically one of the largest budget items for a retailer or restaurant, it’s beneficial to the bottom line to have the optimal number of employees working at any given time. However, this can be a delicate balancing act: retailers, for example, want enough associates on the floor and at the POS to facilitate sales and keep checkout lines moving, but not so many that employees don’t have enough work to keep them busy. In larger multi-department stores, retailers need to have enough associates working in product areas requiring heavy sales assistance (e.g. jewelry and cosmetics) versus those where customers will only occasionally need assistance (e.g. apparel, groceries, home repair items). Using timely traffic data to chart when a store or restaurant is busiest, and deploying employees accordingly, ensures there will be sufficient staff on hand during busy times without wasting valuable resources at non-peak times.

True Sales Conversion Rates: Customer traffic is all well and good, but sales are literally what make the cash registers ring. Timely traffic data is critical to understanding how many people are actually buying items versus simply browsing. With true conversion rate data, businesses can explain sales spikes and slumps. If sales are down, the conversion rate can show whether it’s because foot traffic has slowed, but if traffic hasn’t dropped, the conversion rate will show that high traffic is no longer leading to high sales.

Promotion/Display Effectiveness: Promotional advertising can be costly, so it’s beneficial to know what is actually drawing customers in. Integrating a people counting system with the POS to track sales of a promoted product or service during a specific period can reveal which vehicles and messages are most effective. If timely traffic data indicates a spike in customer visits without a corresponding rise in sales of a promoted item, it’s a strong indication that the promotion needs to be rethought.

Gathering timely traffic data provides the cornerstone for critical performance measurements, including true sales conversion rates, in retail, restaurant, and hospitality locations. This data provides the means to consistently check up on labor efficiency and scheduling as well as the effectiveness of promotional tools both inside and outside the store.