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    February-2013  


5 Ways to Drive In-Store Customer Conversion Rates

Small business retailers need to find ways of increasing in-store sales from customers already moving through the aisles.
There are only three ways to drive up in-store sales:

  1. Encourage more prospects to visit your store;
  2. Increase average ticket amounts, and
  3. Increase customer conversion rate –that is, sell to more of the prospects already visiting the store. These are the folks who visit a store but don’t buy.

To a great extent retail sales has been a two-trick pony: drive more prospect traffic and increase average ticket. Driving more prospects into the company stores usually requires an advertising or promotional investment of some kind.  To increase average ticket sales is a continuing process that is faced by most retailers.

Mark Ryski, a noted retail marketing advisor, argues that retailers should focus on the conversion rate.  He is referring to methods of converting store browsers into buyers. The editors would also like to note his company offers services in this area but his advice and suggestions are important to better understanding how to improve in-store retail sales.

Ryski believes many retailers are not focusing enough attention on this vital statistic.

To be effective in this area, Ryski argues that retailers should be tracking traffic and calculating conversion rates.  Many retailers, he believes are not tracking this vital statistic.

“This is not the same as transaction counts. Lots of retailers are confused about this. Transaction counts represent the number of people who made a purchase; traffic counts represent the total number of people who came to the store including buyers and non-buyers. Conversion rate is simply calculated by dividing sales transactions by gross traffic counts,” he says.

 For example, if you logged 500 traffic counts in your store and there were 200 sales transactions for the day, your conversion rate would be 40% (i.e. 200/500).
“Without traffic counts,” Ryski says, “retailers can’t actually calculate conversion rate. The fact is, if you don't track traffic in your stores, you can’t calculate conversion rate. If you can’t calculate conversion rate, well, you can’t improve it. So for the roughly 35% of retailers who actually track traffic and conversion rates, here are five ways you can improve conversion rates in your stores.”

Understand why people don't buy: one of the most important things a retailer can do to improve conversion rates is to understand why people don’t buy. Long till line ups, can’t find sales help, out-of-stocks, poor merchandising, the list goes on. There are reasons why people visit a store and don’t buy and the retailer needs to understand it. Every store manager should spend some time observing visitors in his/her store. Resist the temptation to help; just observe the behaviors. Watch customers as they move through your store, and it won’t take long for a manager to identify some actions to be taken to turn more visitors into buyers.

Align staff to traffic not transactions: Sounds simple enough, but one many retailers overlook. Staff scheduling is tricky at the best of times, but aligning staff resources to when prospects are in the store will help maximize chances of converting more of them into buyers. Pay particular attention to lunch time, when store traffic can be way up, but staff lunch breaks can seriously drag down conversion rates. Associates need to eat, but customers need to be served. Matching staff schedules to traffic volume and timing in your store will help improve your chances of converting more.

Look for conversion leaks and plug the holes: Traffic volume and conversion rates tend to be inversely related. That is, when traffic is high, conversion tends to go down or sag. When traffic levels are low, conversion rates tend to go up. It’s not hard to understand why this happens. When the store is busy, till lines are longer and it’s harder to get help from an associate. The opposite is true when the store isn’t as busy. So, if a manager wants to improve conversion rates, look at the traffic and conversion patterns in the store by day of week and by hour to look for when conversion rates are sagging – these sags represent the times when sales are being lost.

Set conversion targets by store: having goals and targets are important if the company wants to improve results. Set a conversion target for each store. It’s important to remember that every store is unique and conversion targets should be set uniquely by store. One store might be doing well with a 15% conversion rate while another may be underperforming even though it has a 30% conversion rate. The trick is to move the conversion rate up relative to each store’s performance.

Make conversion a team sport: it takes the collective effort of all staff to help turn prospects into buyers. From the cashiers and sales associates to the merchandisers – everyone in the store plays a role. So don’t think of conversion as merely some business metric, but rather a simple measure of how well the whole store is doing at helping people buy. A good way to help improve conversion is to ensure all staff understands what conversion is and that each of them helps influence it. Ask staff about why they think people don’t buy and what the store can do to improve conversion rate. Discuss targets, get them to buy-in and share results. Get them excited about moving the conversion needle and you will significantly improve your chances of actually doing it.

According to Ryski, everyday prospects visit stores with the intent to buy, but leave without making a purchase. Getting a store to capture even a few more of these lost sales can have a significant impact on overall sales results. Improving in-store conversion rate is not hard to do, but it does take focus and attention – the suggestions above will help drive conversion in your stores.

If a manager doesn’t track traffic or measure conversion rate in all stores today, simply put, they are missing out on an entirely new way to drive sales. He argues a manager can’t improve conversion if he or she doesn’t measure it. The retailers who are focused on driving conversion rate have a significant advantage over those who do not.  

Mark Ryski is the founder and CEO of HeadCount, a leading analytics firm specializing in store traffic and conversion serving retailers across North America. He is also the author of Conversion: The Last Great Retail Metric. For more information, visit www.headcount.com.


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