Traffic & conversion measurement
Introduction to People Counting: Why Measuring Traffic and Conversion Is Healthy for Your Business
As retailers become increasingly aware of the power that comes with measuring and optimizing stores, one of the earliest and most basic capabilities we see adopted is people counting, also known as traffic and conversion. This capability is one of the fundamentals of in-store analytics and well worth understanding.
The idea is pretty simple. To truly monitor how well your stores are doing, you need to start by knowing how many people come into them at any given time. If Store A and Store B each sell the same amount on a given day, does that mean the stores themselves are equally effective? Do both store managers deserve the same level of praise? Not necessarily. What if Store A is in a highly trafficked airport terminal and Store B is in a quieter, slower airport terminal? What if it turns out that the number of people who walked into Store A is double that of Store B? Will you still think that the managers of both stores were equally effective, or will you suspect that maybe Store B actually realizes its potential better than Store A does?
That is the basic promise of people counting. Technology solutions are installed that can detect when people enter and exit your store – and contrary to the old, outdated laser beam counters of yesteryear, modern day people counters can tell the difference between someone who is coming in and someone who is going out. Now you can measure traffic (number of store visitors) and conversion (percentage of store visitors who make a purchase of some sort). In the above example, we would see that Store A had half the conversion rate of Store B. That’s the kind of information headquarters can use to identify where to put its focus to improve overall chain-wide performance.
Imagine being able to see the conversion rate of every location for any given time period, all in a single report or interface. Retailers who have adopted universal traffic and conversion measurement can do exactly that. This metric becomes an invaluable tool for understanding the potential and performance of your various stores. It can help score management performance, identify stores for investment, and point the way to new prospective locations for expansion. You could easily identify the bottom 5% of your stores and give those managers extra training to bring up their numbers. Or identify the top 5% for special recognition or to look at them for best practices you can roll out throughout the enterprise.
Or imagine looking at your conversion rate by time period. What would you do differently if you found out that your conversion percentage went down on the weekends as opposed to week days? What if you found out it went down in the middle of the day compared to the morning and evening? What would you do if you found out that your conversion dropped when you had the highest traffic of passengers in your stores? Or what if it turned out that your conversion rate was lower during the peak travel periods (holiday season) than the rest of the year? Would this knowledge be useful to you? Would you make changes to staffing, store hours, training, or promotion to improve your performance during these times? Most retailers would.
If you do make the move to add people counting capability to your stores, be aware that not all products will give you the same capabilities. To get the full benefits available, you should choose a system that:
- Measures the direction of travel (inbound vs. outbound)
- Ties into your point-of-sale system for automatic calculation of conversion rates
- Works in large open entrances (as are commonly seen in airport stores) in addition to discreet doorways
- Can independently track employees and remove them from traffic numbers for a more indicative picture of true shopper counts
- Includes tools to instantly show you key factors like year-over-year comparisons, aggregated averages by day or week and hour of the day, and average lines
- Integrates with staffing and/or time & attendance software to automatically compare employee presence to store traffic levels
- Presents results in powerful and easy-to-use tools like data mining dashboards, customizable reports, and mobile applications
- Provides traffic in real time
About the author
Hanan Fraysse is a long-time professional in the luxury retail industry & travel retail. For more than twenty-two years she has held sales, marketing, and business development management roles for the likes of L’Oreal Luxury Division, Unilever, Tumi & L’Occitane, and her focus areas have included international business development, e-commerce, and most recently travel retail. Hanan is presently Regional Director for the EMEA and Travel Retail for RetailNext, the leader in real-time store monitoring. She can be reached directly at email@example.com.