The best advice ever given to retailers: ‘If you want to increase your sales, know your target customers.’ Today’s success-focused retailers may do well to use this knowledge to design more effective strategies, to boost sales and customer satisfaction.
Store sales are looking a little flat and you need to find ways to deliver better results. There’s still a scent of the economic and financial recession lingering, but you survived that crisis and it’s time to start getting the sales needle to move in a positive direction.
There are only three ways you can drive sales in your stores: (1) encourage more prospects to visit your store; (2) increase your average ticket and (3) increase your conversion rate — that is, sell to more of the prospects already visiting your stores. These are the shoppers who visit your store but don’t buy.
To a great extent retail sales has been a two-strategy game: drive more prospect traffic and increase average ticket. Driving more prospects into your stores usually requires an advertising or promotional investment of some kind, and increasing average ticket, well let’s just say that most retailers have been and continue to focus on this one. But what about conversion rate? Driving conversion rate is the third strategy every retailer needs to learn — it’s another source of sales opportunity that most retailers today completely overlook.
Conversion rate is simply the percentage of the customers who leave with a purchase to the customers who come into a store. It is simply calculated by dividing sales transactions by gross traffic counts. 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).
Here ia another example:
First, you need to actually track prospect traffic. 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. As you can see, without traffic counts, you 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. Here are some of the 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 your store and don’t buy and you need to understand it. Every retail business owner, leader and manager should spend some time observing visitors in his/her store. Resist the temptation to help; just observe the behaviours. Watch customers as they move through your store, and it won’t take long for you to identify some actions you can take to turn more visitors into buyers.
- Align your staff to traffic not transactions:
Sounds simple enough, but one many retailers overlook. Staff scheduling is tricky at the best of times, but aligning your staff resources to when prospects are in your store will help you maximize your chances of converting more of them into buyers. For instance, not paying 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 you want to improve conversion rates, look at the traffic and conversion patterns in your 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. These are your sales opportunities that must be tapped into to maximize store sales!
- Set conversion targets by store:
Having goals and targets are important if you want to improve results. If you don’t have a conversion target for your store, you need to set one. 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 under-performing even though it has a 30% conversion rate. The trick is to move your own conversion rate up relative to your 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 your staff understands what conversion is and that each of them helps influence it. Ask your 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.
Everyday prospects visit your stores with the intent to buy, but leave without making a purchase. Getting your store to capture even a few more of these lost sales can have a significant impact on overall sales results. Improving your in-store conversion rate is not hard to do, but it does take focus and attention — the suggestions above will help you drive conversion in your stores.
If you don’t track traffic or measure conversion rate in all your stores today, simply put, you are missing out on an entirely new way to drive sales. You can’t improve conversion if you don’t measure it. The retailers who are focused on driving conversion rate have a significant advantage over those who do not.
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