The end of the holiday season means more than just store cleanup and clearance sales – it marks the beginning of the annual ritual of store team performance evaluations. Throughout my retail career – from stock person to store manager and beyond – it was a time to reflect on the year, review individual and team performance and plan for the year ahead. In some cases, I dreaded this process because I always felt the results were open to interpretation and unfortunately the one unifying criterion was simply making numbers for the year.
While strong sales can hide many imperfections, weak sales can mask many more performance wins for store teams than you might imagine. Incorporating store traffic results into performance evaluations can help reveal your true diamond in the rough stores and expose those who have simply gotten by on the luck of the traffic draw!
Retail traffic indicates a store’s sales opportunity and in-store performance.
The first place to start when gauging opportunity is to compare a store’s year-over-year sales (comp sales percent) to its year-over-year traffic (comp traffic percent). If the sales comp exceeds the traffic comp, it is typically a high-level indication that the store team is making good use of their selling opportunities. If the opposite is true, it means that they are missing some of those opportunities.
This is why I believe that sales-per-shopper (total sales dollars divided by total traffic count) is a great measurement of store performance. Simply put, this metric focuses on the things that are within a store team’s control (e.g., conversion rates, units per transaction, average ticket). It also removes the temptation to blame poor results solely on traffic trends. Most importantly, it gets at the true definition of selling performance: how well did the store team convert shoppers into buyers and did they maximize each transaction?
Personally, I would choose a manager who faced declining traffic and brought home a high sales-per-shopper comp over one who simply met a sales target through traffic increases any day! Who was probably working harder to drive business and who really achieved a meaningful result? Store teams cannot necessarily maintain traffic levels without significant support from marketing and real estate, but all store teams are solely responsible for taking care of customers once they do enter the store.
Not all customer traffic is equal.
Some location types attract a heavier population of distracted shoppers than others. This can be a result of competition, entertainment options and other factors fighting for the customer’s share of wallet. That is why I suggest segmenting stores into groups of peers with similar performance expectations. Just as you wouldn’t want to evaluate a District Manager with 20 stores under their span of control the same way as one with only 5 stores; the type of store and traffic share should play a role in a quality assessment.
Positive performance evaluations can lead to job advancement.
When considering promoting associates or moving a successful manager to a different location, I always took their current store location type (e.g., mall, strip center, box size) and traffic footprint into account in order to help me determine how that might translate in a different environment. Could someone who was used to working with 500 customers in a week transition comfortably to a store that handled 1,200 customers? How would a manager who was used to seeing high conversion rates at a small street-front boutique deal with the lower rates expected from a large regional mall location?
At an associate level, these differences are just as meaningful. Can your sales associates multi-task and handle more than one customer at a time (at ShopperTrak, we call them “sprinters”) or are they better suited to work with shoppers on an individual basis (we call them “marathoners”)? What does your organization teach your sales teams regarding this concept? Slow days can be high revenue days when staffed by skilled marathoners, while extremely busy traffic days may make them less effective and result in decreased service levels. Scheduling sprinters with marathoners, or finding associates who can adapt to both, have the ability to work wonders on exceeding store expectations and individual goals.
Speaking of scheduling…
It’s important to consider how and when an associate is scheduled, especially if they work a similar shift every week, when conducting assessments. Scheduling the wrong person at the wrong time or a superstar at the right time also impacts the store and the individual’s results. And stores that are short-handed run the same risk as those that are overstaffed – damaged service levels due to demoralized associates.
Finally, a few words on setting next year’s goals. Start with your assumption on the store’s traffic base: is it increasing, decreasing or remaining constant? Then, set the expectation for the sales-per-shopper and its underlying metrics that are both realistic and will help meet overall sales expectations. If you do this, you will have a more motivated store team for the coming new year!