Conversion Rate Optimization: Mitigating the Effect of Reduced Traffic on Retail Stores
Fewer people are visiting brick-and-mortar stores as the e-commerce revolution rages on. People are finding it easier to shop from their homes and this trend has an adverse effect on retail stores’ visitor count. In response to reduced store traffic, retailers initially focused on creating new marketing campaigns in a bid to boost traffic. It, however, did not work.
Shortly after, a number of retailers realized that there was another way. Instead of just trying to attract more people to their stores, why not make the most of the visitors they received daily. Instead of focusing on increasing store traffic, why not improve conversion rates?
What it means to improve a store’s conversion rate
“A store’s conversion rate is the percentage of visitors that made purchases in comparison to the number of total visitors. If 100 people visit your store and only 30 of them make purchases, your conversion rate is 30%. Conversely, if 50 people visit and 30 of them buy something, you converted 60% of your visitors. So, rather than work to increase the number of store visitors, it is easier and more profitable to ensure that more visitors make purchases.
It is easier because the visitors are already in your store, you only need to convert them to paying customers. And it is more profitable because the higher your conversion rate, the higher your sales figures, and the bigger your profits.”
How to measure and monitor conversion rates
“You cannot optimize your conversion rate if you have no way of measuring or monitoring it. And to measure the conversion rate, you need accurate store traffic data. When you know how many visitors you received per day/week/month, you can compare the figures to the number of sales completed in that timeframe.
Thankfully, people counting technology has made it possible to accurately measure the number of people that visit physical locations. These devices are placed at entrances and the best of them measure at an accuracy of over 98%. When you compare sales figures with visitor data, you get a measure of your store’s conversion rate. Now that you have a means of measuring it, you can track conversion and see how it improves as new changes are implemented.”
Why sales data alone is not enough
“Some retailers use only sales figures to estimate store traffic; this is wrong and misleading. Sales numbers only show how many people made purchases. It doesn’t account for those that left because they couldn’t find the products they needed, because customer service was poor, and/or because the checkout queue was too long. To optimize the conversion rate, you need to convert all of these people from visitors to customers. This requires you addressing the reasons they abandoned their shopping and you can’t do this if you failed to account for them from the start.”
Practical ways to optimize the conversion rate
Now that you are measuring and monitoring your conversion rate, here are some practical ways to boost customer conversion and reduce the effect of lower store traffic. In addition to people counting technology, below are additional solutions that make it easier for retailers to optimize their conversion rates.
- Anticipate store traffic and make the most of it
When data from people counting devices are analyzed using V-Count’s Business Intelligence Platform, store managers are given reports that outline their store’s peak periods. These are the hours that hold the most sales potential. You can significantly increase your store’s conversion rate during these periods.
- Optimize staff scheduling
Every store has attendants that are persuasive and very good with the customers. By calculating the hourly conversion rate of all your workers, you can identify the best performers. During peak periods, your best performers must be on the sales floor to ensure higher conversion. Furthermore, during off-peak periods, you can maintain a skeleton crew. This frees other workers up to get activities like stocking shelves and taking inventory out of the way.
- Reduce queues and wait-lines
There are queue management systems that help keep retail stores clutter-free. These systems work in real time, and notifications are sent to the manager when long lines are starting to form in the store.
- Improve product placement
Imagine being able to predict the favorite products (and brands) of all your customers. Not just that, you also know the order in which they move around in your store. Heatmap technology makes this possible. Data from heatmap devices can be analyzed to show how customers move around in your store, which sections they visit most, and the products they interact with.
This information can be used to improve product procurement. Also, when you know how your customers move around, you can adjust store layout and reduce the distances between products that sell well together e.g. wines and chocolates. When you list your customers’ favorite products and you place them close to each other, you do not only improve your conversion rate, you also create cross-selling opportunities.
By implementing the practices above, you increase the likelihood that every visitor will find the products that they need in your store. By deploying high performing associates during peak periods, you minimize the number of visitors that leave without buying something. Finally, with queue management systems in place, you ensure that cart abandonment is reduced to the minimum.
To learn more about people counters, heatmap solutions, the Business Intelligence Platform and other retail management tools mentioned above, visit V-Count.com. V-Count is the leading provider of visitor analytics technology. Stores all over the world are using our solutions to optimize their conversion rates, and you should be doing the same.