Why Does My Business Need a People Counter?

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Many industries use people counters as a way to understand what their daily traffic looks like. A store uses people counters to understand their busy times and their overall conversion rate. Libraries use people counters to understand their circulation in the context of how many visitors they have. Shopping centers, malls and other commercial property owners use people counters to gauge the desirability of their properties to retailers and set rents. In public spaces, colleges and universities, people counters track space utilization to assist with funding and resource distribution.

Businesses across sectors use people counters to get reliable data about their visitors and traffic patterns. They can apply this data to serve many purposes, which makes people counters so useful and versatile.

What Is Foot Traffic?

Foot traffic is a metric many businesses use to understand how many people entered a specific location. Retailers use it to determine how many potential customers were in their store during a given time frame. Commercial landlords, especially those in shopping malls, use foot traffic to determine rent for retail locations. Retail space can command higher rent if more people pass by regularly. 

Many businesses are familiar with traffic in how it relates to a website. Online, traffic is equal to the number of people who visited a website or particular page. Marketers use many tactics to drive traffic online, and the visitor count determines their success. An e-retailer looks at site traffic in relation to how many visitors placed an online order to learn how effective their website is at driving sales. Foot traffic is that same metric translated into the physical retail space.

Retailers use foot traffic to gain many useful insights. It lets them see when their peak hours are. They can also understand their conversion rate and lost sales opportunities. If a product doesn’t sell well during peak hours, it might be taking up valuable shelf space. A store can also correlate their business traffic to other events to see how they influence visitor counts. Boosting foot traffic is key to increasing sales, so understanding how visitor numbers rise and fall is critical.

How Do People Counters Measure Foot Traffic?

Online traffic is easy to measure. Most websites show their owners traffic graphs by default. To gain the same level of clarity over their visitor counts, physical businesses need to implement a people counting system.

One way to do this is to have someone count visitors with pen and paper or a handheld tally counter. The manual method is the least accurate and efficient. The staff member charged with counting visitors must be solely focused on counting people to avoid miscounts. Manual counting increases your labor expenses and limits staff productivity. If you have multiple store entrances, manual counting gets quite unwieldy. Even if staff members are incredibly focused, they’re still inclined to make errors because the task is so rote.

Electronic people counting systems boast 95%-99% accuracy and require no extra labor power to give you accurate counts. They measure business traffic and space utilization using either overhead or horizontal sensors. Overhead sensors go directly above the entrance and scan a predetermined zone in front of the door to identify pedestrians. They filter out shelves, carts, children and sometimes staff members to give you an accurate count. They also look at the direction of movement to separate those entering from those exiting. Overhead sensors might incorporate one or two video camera lenses, a thermal sensor or an infrared sensor.

Horizontal sensors work by projecting a break beam across the door frame. Whenever something passes through, it counts as a person. Anything tall enough to break the beam, including a loaded shopping cart, will be counted. Horizontal sensors can be uni-directional, meaning they count a person any time the beam breaks. In that case, you divide your final count by two to determine your actual traffic. They can also be bi-directional, where two parallel laser beams span the doorway. Whichever beam breaks first determines whether the pedestrian is entering or exiting.

People counters might give you a count by the hour or at the end of the day, depending on the system’s accuracy. Some types of overhead sensors can even track your foot traffic in real-time.

When you use automated people counters, you can access your foot traffic data via software. The software can break down your foot traffic into custom periods to compare traffic during a promotion or time of year to another. Analyze your data by the entrance to decide how to arrange your entrance displays. The software lets you import sales data to generate conversion rates and staffing data to track productivity in the context of traffic. You can also correlate traffic data to weather patterns or other external factors right from the software.

What Other Metrics Do People Counters Measure?

People counters measure more than just foot traffic. By counting the number of people visiting a business location, people counters can give you insights into:

Conversion Rates

A conversion rate is the number of transactions divided by the number of people who visit a store. Retailers used to assume most people who entered their store were buying something. When people counters become popular, the numbers told a different story. While the numbers remain hard to pin down, since not all stores track traffic accurately or at all, the industry average rests around a 20% conversion rate.

Understanding your conversion rate, rather than just your raw sales data, gives you an idea of how many sales opportunities you had. Even a 1% increase in conversions can have a tremendous impact on your bottom line. The only way to improve is to understand how your promotions, store, signage and other factors raise and decrease your conversion rates.

Average Transaction Value (ATV)

One way retailers can increase their revenue is to increase the basket size or amount of money individual shoppers spend per visit. This amount represents your ATV — your net sales divided by the number of transactions. Your point-of-sale (POS) system might generate your ATV automatically. Otherwise, you can calculate the figure manually. While you don’t need a people counter to access your ATV, you’ll benefit from aggregating foot traffic with your ATV and comparing these two metrics.

A 2011 academic study found increasing in-store traffic by just one unit increased average sales volume per hour by $9.97. Many factors can contribute to your average transaction value, and traffic is undoubtedly one of them. Understanding how traffic affects basket size in your store helps you maximize your revenue.

Customer Acquisition Cost (CAC)

It’s impossible to understand your customer acquisition cost without understanding your traffic and conversion rate. Any marketing you do, whether on or off the premises, determines how many people come through the door. Then, the marketing within the store, product selection and layout determine who converts. All the costs that go into marketing divided by the number of customers acquired represent your CAC.

The data used to determine your CAC can come from your marketing budget and your POS system. It’s crucial to look at this number in light of your foot traffic to identify areas to lower your CAC. If you’re spending a lot of marketing budget getting people in the door, and they aren’t converting in-store, you may need to adjust your strategy. Increasing your conversion rate may lower your CAC.

Benefits of People Counters for Businesses

Retailers, librarians, facilities managers, landlords, hoteliers and anyone with a physical business location can use people counting technology. No matter your business, you’ll benefit from knowing how many people visit you and when. Foot traffic data offers businesses across industries actionable information. Here’s why your business needs a people counter:

Better Understand Business Performance

Seeing your foot traffic and conversion rate lets you know how effectively your business is performing. If a different marketing strategy or employee-to-customer ratio impacts traffic or conversions, you know about it from your foot traffic reports.

You can also compare the performance of one location to another. Are all your sites earning traffic in equal measure as a result of your marketing? Or, are some of your stores consistently pulling in more foot traffic? When you know which stores are drawing in the most customers, you can investigate what factors are at play so you can boost performance at other locations.

Improve Customer Experience

Peak hours sometimes correlate with your shoppers’ needs. For example, a store with peak shopping hours on weekends might cater to “shoppertainment.” Shoppers on weekends may be more interested in having an enjoyable, leisurely visit. A store with peak traffic after business hours on workdays needs a different approach. It might focus on helping shoppers quickly find what they need so they can get home sooner.

When you know your peak shopping hours, you can design a customer experience for the people shopping. It also lets you optimize staffing, so your store runs smoothly during busy times, improving customer experience.

Evaluate Signage and Promotional Success

Is your latest promotion driving more traffic to your location? Is your new sign drawing in passersby from around the plaza? Foot traffic data lets you know if your out-of-store promotions make an impact. Knowing your conversion rate, you’ll also see how your in-store displays affect sales in proportion to traffic. Based on how your traffic and conversions rise and fall, you can tweak your business marketing strategies to find the winning formula.

Compare Digital vs. Physical Traffic

Different types of marketing strategies for small businesses will have different effects on your customers’ behavior. For instance, some of your promotions drive traffic to your website and others to your brick-and-mortar location. Do the same factors that increase your physical traffic give you some lift online? Do you gain more online visitors when in-store traffic is low? Comparing your online and offline visitors lets you better understand your customer journey. Foot traffic shows you how your promotions influence shopping behavior across selling channels.

Understand External Factors That Affect Your Business

Anything from the weather and season to the economy and consumer trends can influence your traffic. Bad weather can impact sales by 23.1%, primarily due to the lowered foot traffic. While these factors are out of your control, knowing how they influence your traffic lets you prepare.

For instance, weather-themed sales, such as for rain clothing or beach fashion, can increase by 40.7% based on the weather. Knowing how weather affects your traffic and conversions in particular product categories helps you make the most out of weather events. You might orchestrate a last-minute sale on bathing suits or fans in anticipation of a heat wave. If snowstorms tend to make business slow, you can move your staff schedule around in anticipation. Likewise, if an annual parade in your area brings in more foot traffic, you can prepare with promotions to attract paradegoers.

Optimize Staffing

Ideally, you want to schedule only as many team members as needed to cover the number of shoppers you have. If you’re understaffed, you’ll miss sales opportunities. Too few cashiers will increase lines at the register, which may turn away customers. Too few stockers may mean you run out of popular items and won’t sell as many as your customers demand. Overstaffing your store means you’ll spend more on labor than you need to.

Knowing what your traffic looks like by the day and by the hour lets you schedule staff most effectively. Once you’ve been using people counting for a year or two, you’ll start to anticipate your seasonal rushes, letting you optimize temporary staffing, too.

Prevent Theft

A people counter is an essential part of your loss prevention system if you know how to read your foot traffic reports. First, you’ll establish a baseline for how much revenue you can expect in a given period as correlated with your foot traffic. Let’s say you usually average about $500 in sales between 9 a.m. and 1 p.m. on Sundays, with usual foot traffic of 50 people.

If you get around 60 visitors one Sunday and sales revenue stays at around $500, the cause may be shoplifting. Your traffic data also shows you if more people used a particular entrance, like the one closest to electronics. If something like this shows up on your foot traffic reports, it’s a good idea to review your security footage during that sales window.

Video-based people counters can even supplement your regular security cameras.

Evaluate Business Expansion Opportunities

When you track foot traffic at your location, you’re armed with more knowledge regarding expanding. Since many commercial landlords track foot traffic, you can compare your current traffic numbers to those cited at a potential rental location. Predict whether a new site will be as profitable as your first based on the foot traffic data.

Types of People Counters

While there are two main categories of people counters, each has a few different options. Horizontal sensors give you a choice between bi-directional and uni-directional counting. Overhead sensors all offer multi-directional data, with either thermal and image-based counting. Each of these options provides a unique set of advantages and drawbacks.

Horizontal Wired and Wireless Counting Systems

Horizontal counting systems count people based on how many breaks in the horizontal laser beam they sense. These are the most basic and inexpensive automatic people counters. They might use bi- or uni-directional data to give you a count. Since horizontal sensors go along the doorframes of each entrance, they are fast and easy to install.

The downside of horizontal counting systems is their accuracy. Since they only have a linear range, miscounts are more likely. Two people walking abreast may be counted as one. A tall child accompanying an adult shopper might be counted as another potential shopper. If your sensor makes a noise when it senses a passerby, you might get children falsely triggering the sensor for fun.

A uni-directional sensor also makes it harder to pinpoint peak shopping hours. For example, say you take counts every hour using a uni-directional sensor. Every hour, on the hour, you divide your hourly count in two. Let’s say 25 people visited your location in a given hour, and many showed up in the last half of the hour. By the time the hour is up, only five of those 25 people have left the store. A uni-directional sensor would give you a count of 30. You would divide that in two, leaving you with 15. You would wrongly estimate you had 15 visitors during the hour when your traffic was 25.

Because of their accuracy limitations, a horizontal people counter is best for doorways narrower than 10 to 15 feet maximum. They also work better for low-density entrances, making them an affordable option for small businesses. Horizontal counters come in both wired and wireless versions. If you have outlets handy near each entry, you can plug your sensors in at a standard 110-volt power outlet. All the horizontal counters can be battery-powered, giving you a year or more of operation between replacements.

Overhead Counting Systems

Overhead sensors have a bird’s eye view of your entrance area. Since they cover the zones in front of your entrances and identify people individually, they give a more detailed view of your customers. They sense directional flow, so they automatically discount people exiting the store. They can also give you an idea of where your traffic is headed, whether that’s forward, to the right or to the left. Two types of technology can power overhead counting systems — thermal and video sensors. These two technologies can even integrate, so one verifies the other’s accuracy.

No matter which type you choose, you can gain distinct benefits from an overhead sensor. They’re an excellent option for locations with wide entrances and a large physical layout. Overhead sensors are more accurate and can filter out shopping carts and children.

Thermal Overhead Sensors

Thermal overhead sensors use thermal imaging technology to detect people entering and exiting. These systems use body heat, so they can’t accidentally count a cart or another object. Since thermal cameras don’t use light, they work equally well in low-light settings like restaurants and in direct sunlight.

Another benefit of thermal overhead sensors is they have an impressive 95% accuracy. They can cover wide entrances and integrate with detectors at other doors.

One downside to thermal sensors is they are more expensive than basic horizontal counters. Compared to video cameras, they have a smaller field of vision and a lower resolution. As a result, they’re less accurate at identifying children. One other disadvantage is they can only track people in motion. A display near the entrance that causes people to stop can affect the system’s accuracy.

Video-Based Overhead Sensors

The other type of overhead sensor is a system using a camera lens. These overhead counters can provide video footage of your store traffic. The sensor and corresponding software automatically generate traffic data. You also have up to 10 days of stored footage, which you can access for more in-depth analysis. Since the technology is video-based, it can even act as a backup for your security cameras.

Video sensors come in two types — single and dual-lens cameras. The dual cameras offer binocular vision for greater depth perception, while single-lens systems are more affordable. While they are most expensive to implement, video sensors provide excellent accuracy. They can filter out carts, strollers and children from your results with precision.

How to Choose the Right People Counter for Your Business

Your business will likely benefit from all the fantastic metrics available to you with a people counter. The question is, which one is right for you? Different people counters work better in different buildings and layouts. Ask yourself four questions to narrow down your options.

  • How is your entrance set up? If you have an open doorway, a horizontal counter may not provide accuracy. Horizontal counters work best with sliding doors since the doors won’t block the beam. If you have swing doors, you’ll need them to swing out. Also, low-volume entrances are more conducive to horizontal sensors.
  • How wide is your entrance? A wide opening — anything above 15 feet — will likely require an overhead people counter. You may need several overhead sensors to span the distance. We generally recommend one sensor per 11 feet of opening. Overhead counters will also need a wired connection to the ceiling.
  • What time intervals do you want to use when capturing traffic? If you only need a general count of how many people visit your business a day, a uni-directional horizontal sensor is all you need. If you want to capture data by the hour or even more frequently, a bi-directional sensor will work better. Track traffic over shorter intervals using either horizontal or overhead sensors.
  • Do people browse near your entryway? Since thermal sensors need people to be in motion for an accurate count, it may lose accuracy if shoppers stop near the entrance. A horizontal sensor won’t get confused unless someone stops in the exact path of the laser beam. However, if you have many people browsing in the entryway, you may want to collect more data. Video-based sensors can keep an eye on shoppers who stop to browse and those who pass on through. Review the stored footage from your overhead sensor to get an idea of how many of your visitors pause to browse your display entrances.

Request Your Free Quote From Traf-Sys

Traf-Sys offers an array of people counting systems to meet the needs of any business. Our most sophisticated people counting system, SafeEntry and SafeCount, offers real-time people counting for occupancy monitoring. We also provide affordable horizontal people counters and data-rich overhead people counters. Our systems are between 95%-99% accurate, and we’ll assist you through the entire installation process. We can help you decide which people counter is right for you and teach you to make sense of your foot traffic data after implementation.

Ready to start collecting valuable data about your visitors? Tell us about your company and the products you’re interested in and request your free quote today.