Space Utilization

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Space Utilization

Every organization places great value on its working space. The area or environment dedicated to operating a facility comes with a significant cost, including the real estate value, the operating expenses and the effectiveness of people working in that space.

It’s difficult to achieve maximum efficiency and produce a proper return on investment without utilizing space to its fullest advantage. Whether it’s retail space, casino space, library space, museum space or university campus space, the facility’s area needs to maximize its space utilization. This is best done by measuring key performance indicators (KPIs) like the number of people using the allowable space.

These KPI measurements are commonly called metrics. They provide realistic data that can be analyzed and used to identify where space is ineffectively utilized. Space utilization metrics can also show what’s really working inside a workspace, which can add significant value to a facility’s operation.

Today’s technology allows facility managers to calculate their space utilization rate easily. Understanding factors like traffic trends and person-to-space occupancy ratios allow managers to improve business performance, secure funding and optimize labor by making better-informed decisions. One of the best technologies available for space utilization calculation and achieving maximum cost-effectiveness is a people counting system.

What Is Space Utilization?

Simply put, space utilization is measuring how and whether allowable space is being used. It’s commonly expressed as a function of occupancy rate and frequency rate. The occupancy looks at how full the space is compared to its capacity, and the frequency rate measures the amount of time the space is used compared to its availability.

Space utilization rates are assessed by the actual use of a facility’s space experiences and the predicted use expected from a particular space. Private office space utilization is no different from public space use when it comes to examining metrics and calculating peak use and low-occupancy times. Whether it’s a corporate boardroom or a library reading area, effective managers must know how their space is truly utilized.

Space utilization is as much about managing people as it is about measuring space. Every facility has its high and low occupancy periods. The trick for managers is knowing how to measure those metrics accurately and move them into a matrix where meaningful data presents a true picture of how their space is used.

Calculating Space Utilization

Another way of viewing space utilization is by dividing a facility’s occupancy by its capacity. For instance, if a facility has the capacity to handle 300 employees but only has 200 on staff, the space utilization ratio is 3:2 or 67 percent utilized. That ratio indicates a lot of unused space, which is expensive real estate.

There is no magic or optimal formula for calculating peak space utilization because each facility has its own specific requirements for the people-to-place formula. For instance, a museum may require extra floor-to-visitor space because of exhibit requirements, while a casino environment will tolerate a much more packed feeling.

A retail outlet, such as a shopping mall location, depends on drop-in traffic. Retail managers have to analyze foot traffic flow trends and compare them with times and promotions so as to maximize their shop space. Education facilities like campuses and universities also have to measure occupancies to schedule staff to meet service needs.

To accurately monitor traffic and understand ultimate space utilization, it’s necessary to measure key factors that balance the people-and-place equation. One true indicator of traffic measurement is a people counting system. These are hardware and software components that provide accurate information on who’s coming, staying and going. People counting systems give a great picture of space utilization metrics.

Space Utilization Metrics

Metrics are an all-encompassing term for measurement units. There’s no precise metric list because there are so many variables in calculating which parts of a facility are being utilized efficiently and which are being under-utilized. Developing metrics is a matter of examining what key performance factors occur within a particular space.

Another way to look at space utilization metrics is by viewing them as data collection points. Getting meaningful data requires an accurate measurement of what people are doing within a particular place. Some common metrics applicable to calculating space use are:

  • Overall square footage: The first metric to establish is a facility’s size. In most American sites, like offices and retail outlets, this measurement is normally calculated by the square footage of floor area, rather than the cubic footage, which is a common warehouse metric. The total square footage is then defined by specific usage areas like meeting rooms and dedicated spots for displays.
  • Overall staff occupancy: An equally important metric for analyzing space utilization is identifying staff numbers and their functions. It’s a rare for a facility to employ all staff members at the same time, so allowance has to be made for high and low employee presence. Many facilities utilize the same space for multiple staff members, such as desk-sharing and common work stations.
  • Overall visitor trafficFor businesses open to the public, visitor traffic is a key performance issue. Monitoring visitor traffic provides a crucial metric that indicates the additional person-load impacting a workspace. It’s important that visitors have ample space to feel welcome and not repelled by crowded conditions.
  • Average peak usage: Both staff and visitors will have peak space-use periods. Some businesses experience periodic rushes, while others have a moderate traffic flow. Monitoring the average peak use in a facility is an important part of calculating the best use of available space.
  • Average peak frequency: Peak use times can vary in frequency. For example, a retail outlet can have an up-and-down scale of visits during the day while a learning institute will have longer fluctuations according to the season. It’s important to establish accurate metrics of how frequent peak capacities occur.
  • Ratio of visits to staff: This is a very important metric that affects staff scheduling. To manage customer interests, there have to be sufficient staff members present to handle their needs. Monitoring metrics like overall traffic and peak periods give managers a significant advantage to make sure resources match the demand, while allowing the space for them to interact.
  • Specific usage areas: Some facility areas are utilized more frequently than others. Both employees and customers move fluidly from one area to another, however, they tend to gravitate to certain spots more than others. Monitoring people’s movements within a facility gives managers a solid metric for what space is a highly utilized region and what’s not.

One of the best data-gathering tools for establishing space utilization metrics is a people counting system. Monitoring people through technology gives real-time data about accurate movements within a facility. People monitoring identifies peak usage in all areas like meeting spaces, individual workspaces and common spaces within any facility. Installing a people counting system will truly benefit space utilization management.

7 Benefits of Space Utilization Metrics

Facility space is one of the top costs of operating any business. To be cost-effective and deliver the best return on investment, facility operators have to manage their space as best as possible.

There are many ways that prudent managers benefit from wisely utilizing their space. By developing realistic metrics and applying data generated through people counting, every facility has the opportunity to increase performance and use their allowable space to its advantage. Here are seven benefits gained from space utilization metrics:

  1. Maximizing space use: Knowing the rate of people-flow through a facility is a crucial metric to establish. By having accurate counts of low and high usage periods, a facility manager knows what space is highly utilized and what can be considered a waste of space. Developing metrics from counting people builds a solid foundation for assessing and achieving maximum space use.
  2. Minimizing space costs: Wasted space can really impact a facility’s operating costs. Analyzing metrics developed from people counting gives a true picture of how space is used to its best efficiency. Eliminating unused space significantly saves operating costs and adds to profitability.
  3. Improving employee relations: It’s well-known that employees function best when they have sufficient space to work. However, some suggest that they can’t prosper in excessive space either, as it doesn’t contribute to a satisfying work environment. Clearly defined space metrics will result in building a workplace with optimum space use for best employee performance.
  4. Enhancing customer experience: Customers might not be able to recognize maximum space utilization, but they can certainly experience it. They intrinsically know when a private business or public facility is well managed, and they feel the effects of a well laid-out space. Metrics gained from people counting technology can have a positive impact on increasing customer experiences when properly implemented.
  5. Promoting agile environments: There’s an increasing trend to design optimum workspaces that promote agile environments, meaning a working space that seamlessly integrates with multiple activities. One of the principles around agile designs is having unassigned seating where workers have the freedom to use what space serves them best for their assignment.
  6. Conserving energy expenses: It stands to reason that maximized spaces make the best use of energy resources. This goes beyond conserving utility expenses and involves human energy that’s needlessly expended through inefficient environments. A people counting system provides excellent metrics for knowing how to improve space utilization and conserve energy expenses.
  7. Optimizing internal services: Communication between workers and outward to their management team is optimized by having efficient services integrated with excellent use of space. People counting is a support tool for establishing internal service efficiency, and is one more benefit a facility gains through space utilization metrics.

Every company that employs space utilization metrics and implements positive changes can expect a positive impact. Investing in technology support like people counting systems shows up as more than an improved bottom line. The return on investment also comes through as customer satisfaction, employee efficiency and organizational safety.

Technology That Can Improve Space Utilization

People counting systems are fascinating technological tools. They work on a straightforward principle of monitoring human movements in and out of a facility. Technology-based counters also track people as they move about the place.

People counters serve two main purposes. The first is acting as a customer relationship management tool. The second is acting as an internal data-gathering device that builds metrics to monitor employee patterns. In both roles, people counting systems provide excellent benefits that help make the best use of space in every application.

As with all technology, people counting systems continue to evolve. These systems are now highly sensitive compared to early models that simply clicked as people passed by. Many of today’s people counters are complex integrations of hardware and software. Here is a brief view of current people counting technology:

  • Density counting uses depth data and computer vision, mixed with machine learning, to anonymously track human movement.
  • Optical sensors are smart cameras that use real-time images to detect movement and identify people.
  • Break-beams are active infrared monitors that emit and receive light-wave interruption signals.
  • Thermal imagers detect body heat and register people’s moves on a software platform that builds metric patterns.
  • Wi-Fi trackers follow cell and smartphone signals to recognize individuals and know if they’ve seen them before.
  • Seat sensors detect human presence at work stations, on transportation systems and even in movie theaters.
  • Ultrasonic sensors use sound waves that bounce off people as they pass, and then use the information to supply movement metrics.

Investing in people counting systems is a must for progressive facility managers who want to make the most of their space utilization. There is a wide range of components used for counting people, and they vary in sophistication. These are the common components found in most people counter systems:

  • Overhead beam counters detect movement from above.
  • Horizontal beam counters identify sideways motion.
  • Uni-directional counters follow one-way traffic.
  • Bi-directional counters track two-way motion.
  • Wired counters use hard-wired components.
  • Wireless counters rely on wi-fi or radio signal communication.

Integrated software is an important technological support to integrated people counting systems. Compatible software takes data sent from counting sensors and transmits it into meaningful metrics. Information generated in software reports lets a management team clearly view what human activity takes place inside their premises. From this valuable content, managers make serious decisions about utilizing space.

Traf-Sys People Counting Systems Help Utilize Space

Traf-Sys provided top technological solutions where facilities want to maximize their use of space. Traf-Sys people counting systems provide component and software support for traffic monitoring challenges that mine raw data and turn it into meaningful metrics. From this information, business owners and operators have an excellent base on which to plan their optimal space use.

Over 17,000 locations depend on Traf-Sys people counters to inform them of patterns that affect business decisions and bottom lines. These include facilities like universities, retail stores, shopping malls, casinos, libraries and museums. Each one has benefitted by profiling their human movements, and they’ve made better use of their space from it as well as improving their bottom line.

Learn more about how people counter systems can improve your space utilization by contacting Traf-Sys today. Call us at 1-888-815-6568 or contact us online.

How To Measure Foot Traffic

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Many types of businesses, including for- and non-profits, rely on people patronizing them. Without adfoot equate pedestrian traffic near your business, you may not hit the numbers you need. But getting people into the door is not the only reason you will want to evaluate foot traffic data.

Identifying pedestrian cycles gives you the information you need to optimize your operations. Whatever your sector, you will find a use for measuring traffic in the area. If you want a people counting software and hardware solution for your business, learn the best way to set it up for assessing the habits of those walking in your building.

Why Collecting Foot Traffic Data Matters Across Industries

While most associate people counting with retail, this information is vital in multiple fields, including:

  • Non-Profits: Non-profit institutes can gather information about their popularity to best schedule staff and volunteers, making the most of these limited resources.
  • Warehouses: Identifying the most commonly used routes through doors of a warehouse can help you rearrange the design to prevent traffic jams that can slow the process of moving products.
  • Libraries: Instead of hiring a person to count patrons, having an automated system gives you more accurate data about people entering the library.
  • Malls: Foot traffic into a mall drastically impacts the profits of businesses inside. Identifying foot traffic trends can help improve security and advertising.
  • Retailers: You can gauge your marketing success by counting how many patrons enter your stores.
  • Restaurants: Identify trends in times and patrons and see whether they relate to special occasions, deals or other events. Foot traffic data can help you make server schedules, plan promotions and find ways to increase profits.
  • Urban Planning: Creating walkable neighborhoods requires urban planners to find out where people walk. Planners must know how to count pedestrians to decide how to lay out city areas.
  • Utility Managers: Determining times of peak occupancy at various points during the week and year can help you set more accurate HVAC schedules to maximize efficiency and comfort.
  • Casinos: Casino managers can change the layout of their gaming areas by inserting games or ATMs where people congregate. Also, staffing and security personnel schedules can adapt to more popular times.

How to Measure Pedestrian Traffic

How you measure pedestrian traffic depends on what you will do with the data. Setting up hardware and software for the counting process automates things so you can save your workers’ time while gathering necessary information about foot traffic. Following these steps ensures you have a setup that will accurately count people.

1. Create Goals for Measuring Foot Traffic

If you want to know how to collect foot traffic data, you need to determine your goals before creating a data-gathering strategy. What you intend to do with the information will help you choose the best hardware for counting people. Will you be:

  • Entering People: Use a self-contained door counter to find out how many people pass the door during a given time.
  • Passing Pedestrians: Employ an outdoor counting sensor if you want to measure the number of pedestrians walking through a point.
  • Find Peak Traffic: Identifying peak traffic times or average length of visits requires you to install sensors that connect to people counting software.

These goals only account for some of the ends you could achieve through using sensors and software. If you have a different purpose for your business, decide what information you want to collect and use the data type and business entry points to determine the sensors you need — outdoor, thermal, video or bidirectional.

2. Identify Entry and Exit Points For Data Collection

Where do you want to count people? While this question seems straightforward, where you install the sensor will help you choose the right model for your project. Ask yourself these questions:

  • Do you need to know how often workers pass between buildings?
  • Is your goal to count the number of customers entering your business?
  • Does the number of people who leave an area matter?
  • Will the time of day affect your counting goals?
  • Do people move past the monitoring point in groups or individually?

Measure the entry and exit points where you want to install the sensors. Opening height and width determine how many sensors and the type you will need. The dimensions of the entryways, as well as the type of information you want to collect, will help you choose the best sensors for your people counting needs.

3. Select Traffic Counting Sensors

Consider how many entrances and exits you need to monitor to plan the number of people counting monitoring devices you need. Look at the entrance designs. Whether you have doors or an open walkway will make a difference in the sensors you use for that location.

You have two main choices for sensor position and two options for how they count. Horizontal sensors send a beam across an opening and count how many times it breaks. These may come in wireless or wired options. Overhead designs install in the ceiling and require wired network connections. These can be unidirectional or bidirectional counters. The former only counts the number of people passing through, regardless of direction. However, the latter distinguishes whether people enter or exit.

If you have a swinging door that opens outward, you can use a horizontal counter. Swinging doors that open inward can block the detection beam across people’s legs. The door funnels people through the entryway in single file, making the horizontal sensor more accurate. Ideally, only use horizontal beam devices across doorways of 15-feet wide or narrower.

For open entrances or extra-wide entry points where people can move in groups or stand in the opening, overhead sensors will give you a more accurate count. Depending on how high the ceiling is, you should plan to install at least one overhead sensor for every 11 feet of entrance width. Make sure you can get network cables and power to the overhead door sensors if you select a wired design. If your model requires a wired connection or power supply, factor that into the installation costs and time when planning.

4. Choose How You Will Store or Transmit Data

Again, ask yourself some questions:

  • How will the sensors store the data, or will they transmit it to a server?
  • Do you want someone to read the data and reset the counter manually?
  • Would you prefer the sensors send data to your people counting software over the network or via a data controller? The latter option gives you the flexibility to automate the data collection process.

Additionally, you can buy server space, so you don’t need to use your servers to host the information collected by the sensors. Using a hosting service for your data will help you keep the data organized, especially if you have multiple sensors around your facility or numerous buildings with sensors installed. For instance, our Traf-Sys hosting service combines information storage and reporting into a single solution to free you from managing the database or updating software.

5. Install Counting Sensors

To ensure accurate counts, you must install the sensors correctly. The type of sensor will dictate where you must set up the device. Guard the spacing between sensors, especially overhead models, to avoid double counting or missing people who pass through the entrance.

Horizontal counters fit inside a doorframe. Install these so the door opening does not interfere with the readings. You want to count people only, not how many times the door opens. Select a site in the doorframe, so the door opens away from the sensor and does not cross the path of the counting beam. These counters have two parts that must sit directly across from each other for the laser to work. Most horizontal sensors work on batteries, but if you want a wired model, verify that you have an electrical outlet near the installation site first.

Overhead people counters install inside the upper portion of the doorframe or in the ceiling. These devices typically require hardwiring into the network to get power and transmit data. Read the instructions to see if you must set the height in the sensor or install the device at a particular level. Also, review from the instructions whether you need to set the counter to measure unidirectionally or bidirectionally.

6. Set Up Foot Traffic Data Collection Procedures

Collecting data from your sensors depends on the type of monitors you have installed. If you have display-only counters, you will need to have one of your workers record the number each day and reset the total.

Should you prefer to have the data delivered from the sensors to your computer, you may need to add data controllers. These devices gather data from multiple sensors and can store it until you need to send it to your computer or upload to the network.

Other sensors have direct connections to the network and will upload the data to your server or a hosted server. If you choose this option, you will need network-connected sensors and a server set up to receive the data.

7. Begin Collecting Information on Foot Traffic

To collect information from base models of sensors, you will need to schedule checks of the devices to record the data and reset the counters. Checking your sensors throughout the day will help you break down the people counting data to shorter periods for more thorough information than once daily checks. Looking at these devices, especially soon after installation, gives you peace of mind that you put them into place correctly and they provide accurate information.

Even if you have a sensor that automatically uploads its data to a server, you still should check them regularly to ensure network connection and accurate people counting.

8. Analyze Foot Traffic Data

Raw data is challenging to use. You need analytical software to make sense of the information, especially if you have your sensors consistently collecting and transmitting the data.

Software, such as VisiCount, analyzes the information from your sensors and generates easy-to-understand reports. With flexible import and export options, you can give the software the information you need to read. Look over the information in a variety of formats — tables, graphs and drill down — to spot trends. See whether the day or time affected business. You can even examine if weather played a role in a rise or fall in foot traffic.

Scaling the data gives your business room to grow because you can increase the number of branches you monitor easily. Being able to examine various departments of your business can help you make decisions about:

  • Worker schedules
  • Facility layout
  • Logistics

Reports can aggregate data from multiple locations while still allowing you to access information from a particular branch or entrance. For instance, if you have a graph showing trends across all your sites, you can drill down through the data to get details for each facility. If you want to analyze the data from a single store, you can see information from each monitored entrance.

The software creates conversions, which tie the traffic information gathered into percentages to indicate the success of your business. For retailers, this means how many people entering purchased something. In libraries, it could correlate to how many people check out books. By looking over the data in terms of your business’s operations, you get a real-world means of seeing how the number of people entering affects your company.

Incorporating data hosting gives you a secure server for storing your sensor data and generating reports. With such a system, you never need to install software on a single computer. You have access to the information from anywhere, a boon to managers who travel or run multiple facilities. You also don’t have to worry about keeping your servers or managing databases to host your sensors’ information.

8. Make Decisions

Once you’ve reviewed the data analytics, you need to use them effectively. Without making changes based on the data gathered, you will not use the sensors to their fullest potential.

The data you collect will help you make decisions about worker schedules, facility layouts, marketing success and more. Foot traffic data will be valuable when determining the success of your operations. Look at conversions and how changes in your advertising or selling methods influence the numbers.

After making changes based on the people counting information you collected, continue using the sensors and software to determine if your changes create the desired results. The information you gather and review will only help you as much as you use it to improve operations.

A Complete People Counting System

Regardless of your business sector, you cannot forego gathering information about foot traffic. People counting software and hardware are now vital tools for any company. However, setting one of these systems up from scratch poses multiple problems with hardware compatibility and accuracy of data collection. Don’t try to piece together your counting system by cobbling hardware and software on your own.

Get professional help for your people counting needs from Traf-Sys. Speak to one of our trained experts in people counting systems to get the ideal solution for your facility’s needs. Our team of experts can work with you to create a system that will help meet your data goals. Contact our experts for a customized approach to evaluating pedestrian traffic flow for your business.

Use People Counting Technology to Improve Restroom Facilities

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Maintaining public, office and other types of restroom facilities at your business is a task that is often taken for granted. Many businesses have no janitorial staff that is specifically assigned to keep the restrooms clean, relying on customers to notify them when the bathrooms run out of toilet paper, the commodes are inoperable, etc. While this may seem like an effective way to keep labor cost down, a customer or patron may view your business or establishment as poorly-managed if you can’t even keep your restrooms maintained. Continue reading “Use People Counting Technology to Improve Restroom Facilities”

Using People Counters to Measure Jewelry Store Traffic

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If you’re a jewelry store owner, you know how to take the guesswork out of pricing and appraising fine gemstones and pieces of jewelry. You certainly wouldn’t guess at the price of a new diamond engagement ring — with the blind hope that you might get it right. Instead, you select a price that’s in line with your product and your customers’ expectations based on the diamond’s quality and cut, as well as its setting and the going prices of your competition.

Similarly, you can’t afford to guess at what your customers are up to — especially when jewelry store people counters from Traf-Sys Inc. can give you a realistic picture of the foot traffic of your jewelry store. Currently in use in more than 17,000 locations worldwide, our people counting systems are reliable, accurate and ready to help you leverage the foot traffic metrics that can help you grow your business.

People Counters for Jewelry Stores

We have more than 12 years of experience helping retail establishments better understand the needs and habits of their foot traffic. That’s why our customer counters for jewelry stores offer a unique opportunity for jewelry retailers everywhere. After all, when profit margins are tight, wouldn’t you like to take advantage of a proven way to increase your conversion ratios?

At Traf-Sys, we offer several different people counter solutions to effectively match the needs of your store’s layout, as well as the traffic it experiences. With sensitive readers mounted in a variety of possible positions, we regularly supply the following types of systems:

  • Overhead or horizontal readers: Depending on your store’s size, layout and entrances, you can choose an overhead or horizontal type of reader mounting. Either way, the right people counter for your store can be both unobtrusive and effective, leaving your customers free to shop and giving you the foot traffic data you need.
  • Wired or wireless counters: For some jewelers, the idea of a permanent wired installation is perfect, while for others, a battery-powered people counter that requires less time and effort to install is the perfect solution. Whichever you choose, we have a model that will suit your purposes.
  • Uni-directional or bi-directional systems: Certain retail establishments are only concerned with the approximate numbers of customers they see. Other businesses want a more accurate count of how many people enter and leave their retail spaces. This is why we offer both uni-directional and bi-directional systems. Bi-directional systems are capable of differentiating between people coming into and leaving the same space.

Benefits of Jewelry Store People Counter

Along with reliable hardware and great support services from Traf-Sys, you can expect the following benefits when employing one of our people counters designed for your jewelry store:

  • Predict peak hours: With people counters, you can better predict when your peak hours will be — both during regular daily operations, as well as around holidays and busy wedding seasons.
  • Make better staffing decisions: The last thing you want is too many or not enough staff on hand. This is why, once you have a good handle on your foot traffic trends, you can make much more informed staffing decisions that ultimately support your customers — and your profitability.
  • Evaluate promotions: Now, after running a TV ad or other type of sales campaign, you can accurately measure the results and/or effects they have on your foot traffic.
  • Track and improve conversion rates: With knowledge of your foot traffic and sales made during a given time period, you can begin to calculate your conversion rate — with an eye on making changes to improve it.
  • Deter shoplifting: Your products are valuable, which is why having people counters equipped with video playback can be an added deterrent to shoplifters. Once they know they’re under surveillance, most criminals think twice before committing a crime on camera.

For more information on making the most of people counters for jewelry stores, download our new product catalog or contact us directly today.

How To Calculate Retail Conversion Rate

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If you own or manage a retail shop, then it’s essential to know your analytics. Numbers answer nearly all your questions. Should you change your store layout, or is a new layout working effectively? Do you need more or fewer staff? Do you need to order more stock? Was a recent promotion or campaign successful?

When your business doesn’t rely on metrics and analytics, you’re just taking shots in the dark, hoping for the best and relying on instinct when it comes to measuring success.

Well, it seemed busier this week, and our sales were up, so we must be doing something right. Right?

But without metrics, it’s difficult to know where you should attribute your growth or your decline.

One vital question you should be asking that can help you better understand and answer all these questions is, What is my retail conversion rate?

To answer any analytical questions you might have about your business, you must have numbers to compare to, so the sooner you start tracking your retail conversion rate, the sooner you can begin digging into your metrics and start making more informed – and numbers-backed – business decisions.

This step-by-step guide will get you started. But first, let’s discuss retail conversion rates and why they are important.

What Does Conversion Rate Mean in Retail?

Your store conversion rate is the proportion of the number of visitors to your store to the number of visitors who made a purchase. This tells you how well you’re doing at turning browsers into buyers. Your retail conversion rate gives you critical insight into what’s happening in your store. Again, without measuring data such as this, your business decisions are basically based on guesswork.

Calculating your retail conversion rate is one of the best ways to measure the success of your business. Focusing on driving foot traffic into your store and increasing the number of transactions based purely on more bodies is one simple strategy you can employ to boost sales, but more bodies won’t necessarily equate to more money. We’ll explain why in the next couple sections.

Instead, measuring your conversion rate — as opposed to looking only at transactions — paints a much more accurate picture of how well your store is doing.

Calculating retail conversion will tell you how many leads are converting into actual sales — meaning more money for your business — as well as help you analyze other factors. And if you decide to revise any strategies, such as the goods you stock, your window displays or your store layout, or if you try out a new advertising approach, your retail conversion rate will tell you if these things are helping or hindering your bottom line.

retail conversion rate formula

How To Calculate Retail Conversion Rate

So how do you go about calculating your retail conversion rate? It’s pretty simple when you have accurate foot traffic and sales numbers.

First, determine the timeframe you want to examine. Then, take the number of sales made and divide it by the number of customers who visited your store during your designated period, which will give you a decimal. To convert this decimal to a whole number, multiply it by 100. This will give you your conversion rate. Below is the conversion rate formula written out:

retail conversion rate = (number of sales / number of customers) x 100

Pretty easy, right? And the data you receive will be invaluable to your business.

Why Is It Important to Count People and Customers?

It’s tempting to make all your business decisions based simply on transaction metrics. If you’re making sales, and you can track how many sales you make and your average transaction value, many business owners will call that a day and think of that data as “good enough.”

That’s because it’s easy to calculate your transaction data. However, when you begin to count the number of people entering your store, and whether they make a purchase, you’ll get a lot more details about how you’re genuinely doing.

Let’s look at an example.

Say that your store made $6,000 in week 1. You had 150 transactions, so your average transaction value was $40. In the following week, week 2, you made $7,200 and had 160 transactions, so your average transaction value went up to $45. Seems like things improved in week 2, right?

Maybe not. Let’s use the retail conversion formula instead.

First, we need to know your store traffic so we can calculate your conversion rate. In week 1, you had 1,200 people enter your store. Of those, 150 made a purchase, so your conversion rate was 12.5 percent.

In week 2, you had 2,000 people enter your store. That’s a lot more foot traffic. During week 2, you made 160 sales. This equates to a conversion rate of only 8 percent. So even though your average transaction value increased, and even though you made more money in week 2 over week 1, you converted fewer sales per visitor.

Your conversion rate dropped by more than one-third.

If you had maintained that 12.5 percent conversion rate, even at the lower $40 average transaction value you had in week 1, you would have pulled in $10,000. That’s a big difference!

To accurately calculate your conversion rate, you must know how many customers enter your store. Inaccurate store traffic numbers will skew conversion results, so it’s critical to have an accurate people counting system.

Consider the helpful experts at Traf-Sys for your people counting needs. Our thermal imaging people counting systems are up to 98 percent accurate, so you know you’re getting the right numbers to calculate your conversion rate — and all other foot traffic metrics — every time.

average retail conversion rate

What Is the Average Retail Conversion Rate for a Retail Store?

Now that you know how to calculate your store conversion rate accurately, you may be wondering, What is a typical conversion rate for a shop?

These numbers can be a bit difficult to nail down as businesses are often reluctant to share this data — and fewer than 25 percent of retailers even engage in people counting — but industry average conversion rates for brick-and-mortar stores is around 20 percent.

One thing is certain — every industry is different, which makes it even more important to start measuring your own conversion rate and begin tracking it for comparisons, week-over-week, month-over-month and year-over-year.

And once you start calculating your foot traffic — using an accurate people counting system — you’ll be ahead of your competition and well on your way to making better business decisions.

factors that impact conversion rate

What Factors Impact Your Store’s Retail Conversion Rate?

As a retail shop owner, the worst thing that you can imagine is this scenario — a customer walks into your store, takes one look around and immediately walks out. That’s a lead that didn’t convert — a sale that wasn’t made. But this scenario is avoidable.

Many factors will influence your ability to convert.

  1. Strategically position your displays. The way you position your displays is important in determining conversions. Make sure you have attractive window displays since this is something that every customer will see. Most customers will likely enter your store, scan the area and move in a clockwise rotation, so make sure that you put your newest, most attractive and highest margin items to the left of your entrance. Make aisles shorter and angle displays to remove the grocery store-like monotony that comes from long aisles. And position low-priced, impulse buys near the register and checkout area.
  2. Place retail sales associates on the floor. Are your team members greeting customers and guiding them through the purchasing process? If not, then you’re missing sales opportunities. With the high amount of e-commerce that has taken over the retail industry, many customers shop in-store because they want to ask your sales associates questions and learn more about your products. So make sure your employees are available, greeting and engaging with customers, and knowledgable about the items they’re selling. Also, be sure you’re staffing according to traffic, so you have more associates available when traffic is highest.
  3. Manage your inventory. Make sure you have what people want in stock by performing spot-checks and physical audits. And though you want to be certain you have enough inventory in the stockroom, placing fewer items on the floor will give shoppers the feeling of scarcity — which makes the items feel unique to the customer and will increase their perceived value, boosting conversions.
  4. Re-evaluate your checkout line. People hate waiting, and many customers are scared off and may abandon a sale if the line is too long. Consider putting your registers in the back of the store to hide the line. Or even better, think about getting rid of registers altogether by implementing mobile checkout that allows your employees to ring up customers wherever they are on the floor.

Increasing conversion can be a matter of simply making a few tweaks. Continue tracking your conversion rates as you make changes so you can know what’s working and what isn’t.

Questions This Data Will Answer

Once you begin tracking your retail conversion rate, you can start to answer some questions based on your store traffic and revenue, which will give you new insight into your business that will help you make staffing and inventory decisions.

  1. Is there a time of the day when the conversion rate is highest?
  2. Is there a time of the day when the conversion rate is lowest?
  3. Is there a day of the week where rates are highest?
  4. Is there a day of the week where rates are lowest?
  5. Does your conversion rate change when you are understaffed?
  6. Do conversion rates increase when sales associates are encouraged to promote a specific item or promotion?

When you have reliable data and numbers to back it up, you can begin digging into these questions, and many more.

retail kpis

Other Retail Key Performance Indicators You Should Be Measuring

Once you start analyzing your data and digging into the hard-and-fast metrics that prove your company’s mettle, you’ll be hooked! You’ll want to look at all your key performance indicators (KPIs) to know how you’re doing in every aspect of your business.

Let’s dive into other important retail KPIs your store should be tracking:

  • Revenue per visitor: Revenue per visitor tracks the amount of money generated each time someone walks into your store. This is important to measure because it shows you whether efforts to increase traffic are working. A positive trend in your revenue per visitor metric proves that more people are visiting and buying, while a negative trend can indicate that though you’re receiving more traffic, you’re still not converting.

    revenue per visitor = total revenue / total number of visitors

  • Average transaction value: This metric shows you the average value generated from each transaction. This number lets you know how much customers spend on average when they come into your shop. A higher amount means that either people are buying bigger ticket items or purchasing larger quantities. You can use this number to determine if you’re pricing items appropriately.

    average transaction value = total revenue / total number of sales

  • Sales per employee: Sales per employee can help you with scheduling and incentivizing your employees. It can also help you make decisions in regards to hiring and compensation. You can also drill down even more and measure this number based on each employee to determine how each of your staff members is performing individually.

    sales per employee = net sales / number of employees

  • Year-over-year growth: How is your business doing? Are you improving every year? For the answer, you need to determine your year-over-year growth. As a business owner, you should strive for continuous development. This number helps you know if you’re getting better or worse each year.

    year-over-year growth = (current period revenue – previous period revenue) / previous period revenue x 100

  • Net profit: Net profit tells you how much you’ve earned minus the cost of goods and all other business expenses, like administrative costs, employee payroll, rent and more. This determines if you’re putting money in your pocket or if your overhead is too high to make any money. The equation is simple.

    net profit = all revenues – all expenses

  • Sell-through rate: This is the percentage of items sold compared to the total number of items available. It lets you know how your inventory is performing so you can make better purchasing decisions.

    sell-through = number of items sold / beginning inventory x 100

  • Shop rate calculation: How much should you be charging on retail items? There isn’t necessarily a hard-and-fast calculation that you can use to determine this number. Consider the market rate and be sure to cover your labor and overhead costs. A simple rule of thumb is to double the wholesale price.

    retail price = wholesale price x 2

  • Foot traffic: Foot traffic refers to the number of people who come into your store. It’s pretty straightforward! This metric can help you evaluate whether your marketing efforts are working effectively. It’s calculated by simply counting the number of people coming through your door.

    calculated using accurate people counting systems

Go ahead and embrace your inner math geek. When it comes to business, KPIs are king. The more you’re calculating, the more you know about how your business is performing, and the more you can do to enhance your performance, improve your marketing and convert more leads into customers.

traf sys retail conversion rate quote

Choose Traf-Sys Inc. for Your People Counting Needs

When you’re ready to take more control of your business metrics, contact Traf-Sys today to find out how we can help you measure traffic coming into your retail establishment.

Our people counting systems are highly accurate and provide a range of benefits for your business. People counting and traffic analysis will allow you to calculate your conversion rates as well as allow you to:

  • Evaluate the effectiveness of your advertising and promotional strategies in real time.
  • Optimize your staffing based on traffic and determine where your customers are going within your store, so you know where staff is needed most.
  • Implement effective marketing and operations strategies based on best practices for your niche.

Call us at 888-815-6568 to talk to our experts and learn more about our people counting system and request a free quote for services.

How to Use People Counters for Fitness Center Success

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When you’re trying to increase your gym’s profits, you have two options — increase revenue, or decrease expenses. Many businesses use conversion rates to measure success, but a fitness center’s visitors already pay money. As a decision-maker for a gym, you have to find alternate ways to collect and use data. You can change the way you do business with a gym visitor counter. This technology tracks the people who enter or leave an area to give you information on customer activity.

What if you already use another method to count gym visitors? Using a gym tally counter provides more robust data collection than scanning or signing members in. You can place people counting hardware in the doorway of your choice and track entering and exiting members. The versatility of a gym visitor counter makes it irreplaceable for owners who rely on data for their business decisions.

Discover how a people counter can transform the way you manage your fitness center.

Identify Peak Capacity Times

You can use an advanced counter’s results to understand how many people use your facilities. Since it tracks who enters and leaves, its results can help you determine capacity numbers by time. You can base your marketing and programming on busy and quiet hours. For example, you can promote your off-peak times or offer more classes to keep more machines open during peak capacity. Thanks to social media, you can also share your busy hours with your followers to encourage them to visit at other times.

Plan Class Programming

People counting technology lets you compare your capacity to class attendance and draw critical insights. If you find a large proportion of people attending a certain class, you can offer more sessions. To keep more machines open during your peak hours, you can base your class times on your busy hours. You can also add a people counter to your studio’s doors to keep track of attendance for large classes. When you figure out how to use people counter data to your advantage, you can optimize your programming.

Control Cleaning Costs

If you need to manage your cleaning budget, you can use people counters to understand which areas get dirty the most. Using people counting technology in all areas of your fitness center lets you know when and where you need to clean. Traffic data based on room and time can serve as the basis for your cleaning schedule. When you see certain rooms receiving more visitors than others, you know to prioritize them in your plan. Meanwhile, areas with lower use may require less cleaning.

People Counters for Fitness Centers From Traf-Sys

Ready to explore a new world of business data? At Traf-Sys, we provide fitness centers, businesses and organizations with reliable people counting technology. Entrepreneurs like you can use our products to gain critical business insights that increase profits. Your fitness center can grow more than ever before with the power of data.

Let us help you find the right software and hardware for your gym management strategy. Contact one of our representatives today to get a free quote.

Measuring Retail Store Traffic: How People Counting Works

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Collecting Customer Traffic Data For Your Store

Sophisticated customer relationship management tools have become prevalent in the industry, allowing the retailer to track virtually every “touch” of the customer’s experience with your store. But what do you know about customers who have not yet visited your kiosk? Or what about those that have given a salesperson their contact information? Do you know how much retail store traffic you have received, or how many potential customers have visited your retail locations last month? Last week? Two hours ago?

In order to answer these important questions, many businesses are employing electronic systems to count customer traffic and using this information in context of other business metrics. Some of the more comprehensive counting systems can also tie in with a company’s server network and show traffic by hour, location and individual entrances.

What Traffic Data Can Provide Decision Makers

Many retailers are now using traffic information to look at the distribution of traffic by hour, day of the week, store location, seasonal periods, promotion periods, total chain, etc. Retailers can also look at the conversion ratio of their store which is the total sales transactions divided by total traffic. Different retail segments can have vastly different conversion ratios. For some businesses, 30 percent conversion rate is considered fantastic while for others this figure would be dismal! Retail stores will also be able to measure traffic based on current promotions and advertising. You will be able to determine if your conversions went up, down or remained the same during the promotion.

With traffic counting, retailers will be able to optimize their staffing. Retailers traditionally staff their stores according to historical and forecasted sales. Unfortunately, this does not account for potential opportunities that may have visited the store but did not buy. Traffic information can inform you of these factors.

Traffic counting will allow retailers to deploy initiatives that increase the likelihood of conversion and analyze what staffing strategies are best for each store or store group.

While the business applications for in-store traffic data is nearly limitless, here are just a few more ways retailers can do more with the data collected: 

  • Identify Prime Real Estate: Once installed, some retailers conduct what is known as A/B testing with our people counting systems. A/B testing pits two options against one another and uses data to determine the winning candidate. You can use this process to further identify which displays perform the best and result in the most sales.
  • Tweak Your Store Layout: It’s your job to guide customers through your space and to entice them to linger and ultimately to buy. The main function of the flow and design of your store is to maximize sales for each square foot of space. Real-time insight into traffic allows you to tweak and refine the layout until you have the optimal layout.
  • Boost Traffic: Ideally once you know your baseline traffic numbers on a daily, weekly, monthly and annual basis, you want to start identifying opportunities for improvement and brainstorming ideas to boost traffic. Time contingent promotions (like door busters) drive customers into your store during off hours. Special events can be strategically scheduled during lulls as well.
  • Prevent Theft: Retail traffic counters aid in determining the ideal shopper-to-associate staffing ratio, which is beneficial not only to providing customer service but also to keeping an eye on individuals in your store who may have unsavory intentions. Retail thieves often strike during busy times when staff may be occupied with assisting shoppers. 

The Technology Behind Traffic Counting Systems

Common retail traffic counting systems use sensors at the entrance areas to count the number of visitors to the store. Infrared technology is used to register customers coming in or going out of the store by counting each time a beam is broken. Some of the more sophisticated systems can even determine a customer’s actual direction of travel; whether they are coming in or going out. These systems are usually based on thermal imaging, which is body heat detection or video processing technology. Sensors can be mounted horizontally at the entrance, or overhead above the customers’ path.

Counts can be generated using the system and sent to a database. Depending on the system that the company is using, counts can be segmented virtually in real-time or divided into time increments such as five minutes, half-hour, hour, etc. Some software systems will allow reports to be generated by time period, store site, entrances, and segmentation groupings.

Use People Counting Data To Increase Profits

Now that you know how the technology works and what the reports from traffic counting will show you, let’s talk about what counting can do for your profits. Since revenue and repeat customers is what keeps you in business, this step is very important.

Once a company begins counting traffic, they will immediately discover new ways to analyze and optimize their business. For example, the retailer will often start with benchmarking its current conversion rates and track future conversion as the company implements best practices to improve on conversion. Even the smallest percent increase can be a significant difference for a company. By utilizing traffic counting systems, companies can also determine if they are understaffed during peak traffic times or if they are losing sales or paying too much for labor during inopportune times.

Traffic counting systems can also inform a company if certain advertising efforts are warranted or not. Combining traffic information with sales and transaction data, assessments can be made to show how to make different areas of your business such as marketing, staffing levels and support more effective.

With a relatively small investment and a little bit of time, retailers can positively impact their profits by analyzing visitor traffic.

Want to learn more about traffic counting? Contact our team of experts to speak with a representative. 

How to Increase Retail Traffic Conversion Rates

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Want to know how to drive conversion in retail? Gathering store retail analytics with a people counting system like Traf-Sys makes increasing your retail conversion rates simpler than ever. Customer data informs retail conversion strategies that have a higher chance of success. You can use your information to observe your customers and practice effective staff management that sells. Learn how to convert in retail with these data-driven and customer-centered approaches.

Optimize Staff Scheduling by Analyzing Store Traffic Data, Not Sales Data

Building your staff schedules around customer traffic numbers can improve your team’s preparedness during busy times of the day. A staffing strategy based solely on sales numbers fail to account for the total number of customers in your store who need assistance. Imagine that it’s lunchtime and a few of your daytime associates are off-the-clock on their lunch break. Employees from businesses across the street are leaving for their lunch breaks as well and decide to kill some time in your store. Suddenly, you have a flood of customers in your store and a shortage of employees to take care of them.

Research shows that during peak traffic times, conversion rates tend to drop. Why is this exactly? In the example above, conversion rates would drop due to long lines at the register or a lack of employees available to assist customers on the floor. Your associates do need to eat. However, to remedy this particular situation, you could consider scheduling breaks a bit before lunch and a bit after lunch so that you are not left swamped during the mid-day rush. If you are tracking the traffic in your store, you will be able to identify other high traffic times during the day, week, month, and year. Knowing your peak traffic times will allow you to ensure that you have enough associates available to assist customers and improve your retail traffic conversion rate.

Observe Store Operations to Identify Why Customers Are Not Buying

Simple observation is another way to identify the reasons why your customers may not be buying. Walk your aisles or stacks discreetly and observe your customers. Are they looking for something that they just can’t find? Or has the item been shelved incorrectly? Is there an associate nearby? If so, are they available to help the customer? What about your store’s merchandising? Is it causing the customer to look twice?

By simply taking the time to watch your customers and jot down some notes, you will be able to determine a few ways that you can begin increasing your retail traffic conversion rate. If you make any changes based on your observations, you will then be able to see if your changes helped by looking at the traffic data.

Develop Sales Associate Training and Set Goals to Help Conversion

Your employees are the ones on the front line dealing with customer after customer every day. It is likely that they may see and experience things that you do not. Talk to them. Why do they think that people don’t buy? How do they believe the store could improve?

Make sure that your staff understands what retail traffic conversion is and how each one of them has a hand in influencing it. Conduct a staff meeting where you determine targeted goals for your retail traffic conversion rates. Turn it into a collaborative or competitive staff effort that will be rewarded somehow. Either way, get the staff excited about increasing your conversion rates. If your staff isn’t passionate about improving conversion rates, then conversion rates will not go up, no matter what you try to do on your own. Once you get your staff excited about improving retail traffic conversion, you can train them in effective ways to help customers and encourage them to buy.

Control Your Register Lines to Improve Customer Satisfaction

Long or slow queues can discourage customers from finalizing a purchase or returning to your store. Make the register line more pleasing for your patrons with strategies such as:

  • Placing registers in the back of your store: If you run your registers close to your entrance, try moving them further into your store for a subtler feel.
  • Switching to a single-line model: Queuing customers in a single line for all stations can result in faster checkouts and shorter wait times.
  • Keeping customers occupied as they wait: Consider ways to make the area near the line more interesting, such as by placing merchandise there.

It may take some experimentation to find methods that improve the queuing experience for your customers. Pay close attention to your traffic, sales and customer satisfaction data to see which approaches deliver the right results.

Improve Store Your Store Layout 

Understanding your store’s flow of traffic will allow you to improve your store layout and ultimately your conversion rate. There are a few key things that are vital to take into consideration when thinking about your store’s layout.

  • 90% of people are right-handed, which also means they are right-footed. When people enter your store, they are more likely to turn right and work their way around your establishment in a counter-clockwise fashion.
  • Aisle width: Wide aisles encourage customers to power-walk through them to their intended destination. Narrow aisles encourage customer browsing and will increase impulse buys.
  • However, extremely narrow aisles may get clogged and will make customers exit your store. It is important to find a balance that fits your available space.  Narrow aisles could also difficult for people counters to properly count customers.
  • High traffic areas and low traffic areas: Promotions will be most successful in high traffic areas of your establishment. Consider placing high-profit items in busy areas and high demand items in low retail store traffic areas, such as at the back of your store. This will help draw customers all the way through your establishment. A greater number of sales associates available to assist customers may be required in these high traffic areas as well.

Offer Price Matching to Compete With Major Retailers and Online Stores

If you sell in a competitive market, price matching can set you apart from other businesses in your industry. This practice can promote retention and make conversions that could go to other retailers. Offering a price match reassures your customer that you prioritize having the lowest prices on the market. It also lets you keep customers who would otherwise go to other retailers with lower prices.

When you’re implementing a price matching policy, remember to balance regulations with ease of access. Find ways for your customer to offer reasonable proof of your competitor’s price that protects your profits. For example, you can provide a 30-day window that gives customers time to redeem their offers.

Present Employee Incentives to Enhance Morale and Increase Store Conversions

You need your entire team to work together to get the most conversions possible. Giving your staff performance incentives gets them involved in conversions and rewards them for their hard work. Ask your employees what they would want as an incentive for sales performance, and help them reach those goals. Make converting customers a team effort by:

  • Teaching your staff about conversions: Explain the concept of conversions to your staff, and give them advice on how to finalize sales.
  • Setting reasonable goals: Set your conversion targets relative to your current performance to keep employee achievements within reach.
  • Asking for employee input: Your staff has one-on-one interactions with customers, so see what they have to say about customer opinions.

These strategies can increase your team’s morale and help them feel involved in your store’s success.

Lead by Example to Demonstrate Top-Quality Customer Service to Your Staff

Small business leaders often involve themselves in day-to-day operations. If you work with customers, you’ll have plenty of opportunities to show your team how you want them to behave on the sales floor. Your employees will model many of their sales strategies on the ones you use in front of them.

As you become a model for your employees, you can make it clear that you expect them to follow your example. Point out when one of your customer interactions succeeds in converting and explain why. If you happen to make a mistake, you can also overview it with your staff and brainstorm better ways to resolve that kind of situation. Opening up to your team in these ways shows that you also want to learn, building trust.

Provide Free Samples to Promote Trust and Brand Awareness

When you give your customers free samples, drinks or snacks, you tap into the human desire to give back. Samples give your customers the feeling that they want to do something for you in return since you gave them a free item. This strategy can also increase conversions by:

  • Giving customers a reason to stay: Free drinks and snacks encourage your patrons to browse the store as they enjoy them.
  • Offering the chance to try out new products: If you give out samples of a new product, you can get feedback about customer interest.
  • Raising awareness about your business: People who get free samples that they enjoy will often tell their friends about the experience.

Remember to choose samples that fit your audience. For example, you may want to provide a vegan option if you offer food samples at a holistic wellness store.

Manage Your Inventory Levels to Keep Your Business Well-Stocked

Maintaining a stock that matches your sales patterns will promote customer satisfaction and raise conversion rates. Pay attention to your patrons’ favorite goods, and check on their stock numbers. Keeping popular items in stock ensures that your customers will count on you as a source for their favorite products.

In instances where you run out of a well-loved item, a contingency plan can help you keep customers moving toward a conversion. Find ways to encourage them to wait for your item to come back or purchase an alternative. For example, if you have online sales, you can show them where to order the product and offer free shipping. You could also promise to text or call them when the product comes back in stock.

Implement and Promote a Hassle-Free Return Policy

Returns are an unavoidable part of retail. Some managers only see the negative side of the return equation and miss out on the positive impact it can have on sales. Train your team to promote and highlight your store’s return policy. This can be an effective way to minimize the fears and hesitations some customers may have before completing their purchase.

Here are some common concerns your customers may be asking themselves before walking to the checkout counter:

  • This cost more than I was planning to spend. Can I really afford to make this purchase?
  • The product seems great now, but will I actually use it?
  • What happens if the item is defective or breaks?
  • Looks great here in the store, but what if I don’t like the way this looks in my home?

Concerns like these can be eliminated with a simple reminder of the store’s return policy, increasing the rate of conversion. Granted, a small percentage of these sales may come back as a return, but the net-benefit from additional sales can have a substantial impact on the bottom line.

How People Counting Data From Traf-Sys Can Help You Increase Retail Conversion Rates

If you need a reliable and valuable retail store traffic counter system, let our state-of-the-art technology guide your business strategy. Our hardware and software can record accurate data on the number of people entering or leaving your store. Let precise foot traffic information inform your conversion strategies and increase your profits. Request a free quote today by contacting a customer representative.