How to Use Retail Traffic Counting the Right Way

retail traffic counting

Today’s traffic counting solutions can provide an attractive return on investment (ROI) for retailers – particularly if they use the data these systems generate to analyze, and improve, their performance in key operational areas.

When the information from retail traffic counting systems is combined with other metrics (particularly point-of-sale data), the resulting analysis gives retailers deeper insights into:

  • True sales conversion rates
  • High and low customer traffic periods
  • Effectiveness of promotions and in-store displays

Sales Conversion: POS data shows how much has been sold and when these sales take place. However, without data about all those potential buyers in the store who didn’t make a purchase, there’s no way to accurately measure true sales conversion rates. Using retail traffic counting technology that records how many people are in a store at any given time and aligning this information with POS data, retailers can determine how effective they (and their store staff) are at converting shoppers into buyers.

Establishing this type of baseline sales conversion rate is essential. It allows retailers to determine how these rates differ by time of day, day of week, and season, as well as the impact of advertising and promotional activity. Stores can also see how they stack up against other locations in a multi-unit chain, or against competitors in the area.

High and Low Traffic Periods: In addition to providing a more nuanced picture of sales conversion rates, time-stamped retail traffic counting solutions provide hard data about just when a store’s peak periods are. This is critical information for managing what’s generally a retailer’s second-biggest budget item (after inventory): store labor. With accurate information about high and low traffic periods, retailers will be able to discover their optimal associate-to-customer ratio, and schedule their people accordingly.

Retailers investing in retail traffic counting sensors located throughout their store (as well as at entrances and exits) can garner even more valuable data. For example, if a store has high traffic but low sales, there may not be enough associates working to help customers find what they want. Or, the problem may be that the associates who are working lack the experience or skills needed to close a sale. These workers may need to be paired with more experienced employees, or may need a refresher course in sales techniques. Without analyzing traffic counting data, however, it would be difficult for managers to pinpoint the nature and causes of these challenges.

Display Effectiveness: Retailers and brands invest heavily in promotions and in-store displays because they know that reaching customers at the point of decision can make – or break – a sale. But beyond tracking sales of promoted items, how can retailers determine the impact of their displays? By tracking how many customers walk by a display, retailers can determine how effective the display is at attracting customers’ attention in the busy environment of a store. Then, using POS data for these heavy traffic periods to track sales of the promoted item, they can see whether customer attention has been converted into actual sales.

Retailers can also test the impact of different display designs, either by placing different versions in similar stores or measuring the impact of each display during the same period (e.g. Thursday through Sunday) during succeeding weeks.

These are just a few of the ways retailers can maximize the ROI of their traffic counting solution investments, using real-world insights into both basic and advanced aspects of their business operations.