How to increase retail sales without cutting prices
By: Todd Starcevich, CEO Europe, ShopperTrak
-Published by MyRetail Media on 04/05/2012-
British fashion retailers are being challenged as never before by the value conscious consumer. While shoppers still gravitate toward recognisable brands, they are much more discerning about when and where they decide to shop. Many now use the internet to window shop and compare prices, making it all the more important for retailers to provide a special experience when they enter the store. Going forward into the New Year, retailers are looking at ways they can keep retail sales high, without resorting to discounts, and even increase their turnover in the long term.
As any seasoned retailer knows, the market has shifted dramatically during the last 14 years. The Internet provides almost anything, at a reasonable cost, and it’s growing. Smart phones, electronic coupons and group discounts also inform and influence shoppers. Consumers browse online, and then visit shops expecting to make purchases that fit their criteria — whether those be time, value or quality-based.
More than ever, retail store managers must understand shopper behaviour in order to provide a competitive, positive customer experience— and counting and analysing foot traffic is the first place to start. Traffic knowledge empowers fashion retailers to make adjustments, especially in staff management, that will help them to capture new sales.
Foot traffic is a simple but powerful metric. Frequently, when stores install comprehensive foot-traffic monitoring systems, managers are shocked by two findings: Firstly, more customers enter the store than they thought. Secondly, fewer make purchases. Only by carefully measuring and monitoring these key indicators of retail health can stores begin to address them and improve their bottom lines.
Measuring foot traffic regularly reveals retail sales lulls that could easily be improved. For example, in one implementation in the US, a clothing retailer noticed a steep drop in its conversion rate. It occurred across all of its stores, week after week. The cause: a regional store manager phone conference. It was scheduled once a week during the lunch hour rush. During the call, selling responsibilities were left to sales assistants. When the store managers joined the conference call and left the floor, the normal conversion rates of 20 percent would drop to single digits.
To all appearances, the floor looked fully staffed and busy during this time. Only by comparing traffic counts to point-of-sale data did shop executives realise they missed conversion opportunities during this period.
After tracking the data and analysing what was happening, the retailer shifted this weekly call to a non-peak period. This allowed managers to assist sales assistants during the traffic rush, and brought the conversion rates during that hour of heavy foot traffic back to 20 percent.
These small changes to the schedule affected all stores around the country and increased the company’s revenue by millions of dollars. It did not attract more customers or cut prices. It simply allowed stores to maintain proper staff levels and convert more browsers into buyers.
Improved conversion rates and identifying peak foot-traffic times (sometimes called “power hours”) are not the only reasons why retailers should measure foot traffic in their stores. Foot traffic also helps individual store managers to make staffing and inventory decisions. With precise data, store managers and regional managers do not have to rely on qualitative, anecdotal evidence. Hard facts can play a bigger role in setting employees’ schedules, deliveries and planning non-selling activities. Scheduling these activities correctly keeps the right number of managers and sales staff in store handling customer rushes and ensuring that customers make it to the till point of sale.
Traffic counting also prepares a store to capture business. It ensures that the store is fully stocked for peak times and provides worthwhile shopping for customers. If you do not have the product available when the customer comes in ready to buy, he or she may leave empty-handed. The customer will consider the shop unprepared — in either stock or staffing — and may not return. When someone leaves the shop, it is likely that their money goes to the competition.
Though counting customers in some way — manual counts or surveys — has been around for years, counting foot traffic today is an exact science. The current methods are accurate, unobtrusive, easily connected systems of tens of thousands of sensors — creating a daily quality control system that old-fashioned techniques cannot replicate. This kind of insurance and automation gives clothes retailers an accurate picture of their businesses’ overall health and important insight for capturing shopper opportunities. Despite being a sophisticated technological solution, they allow merchants to capture business with a much more traditional tactic—a positive customer experience.
About the author
Todd Starcevich joined ShopperTrak, the world’s largest retail traffic counter, in 2006. Primarily charged with developing the implementation program for large scale traffic counting projects and key pilot opportunities with new clients, Todd also became CEO of ShopperTrak in Europe in January 2012.
Additionally, he is responsible for developing medium and long term support strategy for new ShopperTrak services, as well as unique client arrangements; identifying areas for process and procedural improvement. http://www.shoppertrak.com
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