The best and biggest retailers know that keeping their retail conversion rate high during the busiest times is the key to good sales performance.
To track retail conversion rate you need to know two numbers. Footfall is the number of people entering your store. Transactions is the number of people who buy. Divide transactions into footfall and you get the magic number – conversion rate. Let’s look at an example.
It’s 11am and James has 4 sales staff working on the floor and 40 people entering his store. 1 is on break, 1 is stocking shelves, 1 is at the POS – leaving only 1 staff member to roam the floor. By looking at his transaction count during that time, he sees that only 25 transactions are made. What happened to the other 15 people? They entered with an intention to buy but staff were unable to get to them to help them convert. Staff need to be available to do things like:
- find the product for the customer
- help them bundle products that are useful together, or
- upsell them to higher levels of product based on the customer’s needs.
The number one activity staff should be doing is talking with customers. During peak times every person needs to be available to work for customers.
There are a couple of ways to track your customer footfall. The pen and paper method works, but you’ll need to sit there for an hour watching your cameras or watching the door. This removes you from the floor and affects your sales. It’s pretty hard to sit in the office watching customers come through the doors when you could be out there serving!
By far my favorite method to count customer flow (being from a retail technology background, and a self-admitted geek) is with Beonic’s footfall counters. They have a product called Brickstream (Now Nomi?) to count customers, presenting a dashboard for you. The counters are a set of two cameras that sit above the doors of your store and count heads. They can track incoming and outgoing footfall. They even separate children from adults (the two cameras give the system depth perception) and remove those under a certain height from the count. This automatically gives you the footfall numbers for every hour of the day. Combine this number with your POS transaction counts and you’ve instantly got conversion rate!
To perform the analysis, just copy your transaction counts from each hour of the day and paste them into one column in Excel. Grab the footfall counts for the corresponding hours, paste them in right next to it. In the third column, divide column A by column B, and you’ve got your conversion rate.
As your store gets busier, your conversion rate will drop. The trick is to establish a baseline – how is your store performing right now? Then you can add more people the floor the following day or week. Watch your conversion rate and number of transactions increase! There will be a point where an extra person has no effect on conversion rate. Play around with your staff numbers to get the staff to customer ratio right during those peak times.
By matching staff levels to customer demand you can increase your conversion rate, boost your upsell and ultimately increase your profits.
Here’s to a happy and profitable 2016 for us all!