There are plenty of reasons customers enter a retail store, only to walk out empty handed – long checkout lines, out of stock items, no sales associate to help them, etc. Yet, saving those lost sales can be addressed by tracking one simple metric, customer conversion rates.
The customer conversion rate is calculated by dividing sales transactions (number of people who made a purchase) by gross traffic counts (number of people who entered your store). Yet, according to Retail Customer Experience, only 35% of retailers currently track customer conversion rates. That’s pretty low for something that can have such a great impact on sales and is so easy to track. Tracking this information hourly will have the biggest impact.
Tracking traffic counts has to be done at the door and there are numerous third-party applications that can do this. With an integrated retail store management system and the right point of sale software, this information becomes a powerful tool. Increasing customer conversion rates is a great source of revenue many retailers overlook.
The truth is, there are an increasing number of people who enter a store, but don’t buy. In today’s consumer-driven market, customers are harder than ever to please. They have a ‘Delivery on Demand’ expectation from retailers and may very well leave if they can’t find what they are looking for, when they are looking for it. Tracking customer conversion rates may be simple, but what to do with that information can be a challenge. With the right retail store management system, this drop in customer conversion rates can be prevented or improved upon for most retailers.
But how do retailers leverage integrated system data to achieve higher conversion rates and sales?
The first key is to understand why people don’t buy so you know what to fix. Every store is unique, and each store within a chain will have a different customer conversion rate. Observing the customers in your stores is going to give you the best insight into why some customers don’t buy. Are they wandering without ever receiving help? Are they going straight to their target item and finding it out of stock? Are they abandoning their shopping basket at the sight of long check-out lines? Are they showrooming to test out your products and leaving to buy online?
There are many reasons why a customer doesn’t buy. Observing the patterns within your store will help you isolate the reasons that apply to your chain. Additionally, many companies offer professional services and software to aid you in determining the customer conversion patterns within your stores that can integrate into your retail management system.
After identifying the reasons customer conversion is dropping, you’ll want to take a look at aligning your staff with traffic and train/reward them for converting these customers. Traffic counts and conversion rates tend to be inversely related because many customers can’t find help in a busy store, or the lines are too long. Boosting staff for peaks in traffic will ensure more customers can get help and avoid long lines, increasing your customer conversion rate. Also, if you found that customers were leaving due to out-of-stocks, train your staff to assist customers in obtaining items through other channels within your chain. A retail store management system, integrated with point of sale software, that can look up inventory online and in other stores and warehouses will get the customer the item they want without additional effort on the customer’s part, meeting their ‘Delivery on Demand’ expectation while increasing your sales.
Driving customer conversion rates in your stores is an extremely effective way to boost sales. You’ve already worked hard to get these customers in the door – don’t lose them.
-Brenden Jenkins, GM of Retail & eTail Products at NetSuite