We constantly hear about conversion rates and the importance of conversion rate optimisation, but what is the conversion rate in retail, why does it matter, and how can you measure and improve it?
What is the conversion rate in retail?
In retail, a store's conversion rate is the percentage of visitors who made a purchase out of the total number of visitors.
For example, if 100 people visit your store and only 30 of them make a purchase, your conversion rate is 30%. It makes sense to focus on increasing your conversion rate, because the visitors are already in your store; you simply need to turn them into paying customers.
Why is it important for retailers to measure their conversion rate?
Measuring retail conversion rate data is essential to assess the real performance of your stores.
Retail metrics such as sales, revenue per store and total visitor numbers may top your list of priorities when evaluating the success of each store.
However, this can be misleading. Sales figures only show the number of people who make a purchase. They do not take into account visitors who left for various reasons, such as not finding the products they needed, poor customer service or a long queue at the checkout.
To optimise your conversion rate, you need to turn all these people from visitors into customers. To do so, you must tackle the reasons why they abandoned their purchase, and without measuring your conversion rate, you cannot address these issues.
How do you measure store conversion rate?
If you do not monitor or measure your in-store conversion rate, optimising it can prove tricky. To measure your in-store conversion rate, you need accurate in-store footfall data. Once you know how many visitors you received per hour, day, week or month, you can compare these figures with the number of sales made during that period.
Fortunately, people-counting technology has made it possible to measure accurately the number of people visiting physical locations. With our ShopAnalytics platform, you can easily access and visualise your sales and conversion rate metrics.
What is the average conversion rate for retailers?
According to one study, the average conversion rate in retail is between 20% and 40%.
Using this average, it means that around 70% of shoppers leave the store without making a purchase. This means retailers are missing out on a large number of opportunities.
Recently, major retailers have realised that even a 1% improvement in conversion rates can be worth millions of dollars in profit. As a result, more and more of them are using footfall counting analytics. By making simple, lasting changes to staffing, product availability and service based on footfall and visitor conversion data, retailers can measurably improve conversions, units per transaction and average basket value.
How can you improve your store's conversion rate?
Now that you are measuring and monitoring your conversion rate, here are some practical ways to boost customer conversion rates and make the most of your store's footfall.
In addition to people-counting technology, you will find below further solutions that make it easier for retailers to optimise conversion rates.
Anticipate store footfall and make the most of it:
When data from people-counting sensors is analysed using our platform, store managers receive reports describing their store's peak periods. These are the hours with the highest sales potential. You can significantly increase your store's conversion rate during peak periods by offering special promotions, assigning more staff to the shop floor or opening more tills to reduce queue lengths.
Optimise staff scheduling:
Every store has sales assistants who are persuasive and very good with customers. By calculating the hourly conversion rate of all your employees, you can identify the top performers. During peak periods, your best people should be on the shop floor to secure higher conversion. Furthermore, during quiet or slow periods, you can reduce to a minimum the number of people needed to run and maintain the business. This saves operating costs and frees up other staff members for other tasks such as shelf stocking or clearing stock.
Reduce queues:
Queue management systems help retailers run smoothly and offer customers a better experience. Queue management solutions work in real time, and notifications are sent to store managers when long queues begin to form in the store. Store managers can then open new tills to reduce queues and waiting times, resulting in a better customer experience and greater brand loyalty.
Improve product placement:
Heatmap solutions give your store the ability to analyse and predict its customers' favourite products and brands. In addition, you can understand and visualise how your customers move around your store, which sections they visit most and which products they interact with and are most drawn to.
When you understand how your customers move around and interact with products in your store, you can use this information to improve product placement and adjust the store layout. For example, you can place products that sell well together closer to each other to increase the likelihood that customers buy both products instead of just one.
When you know your customers' favourite products and place them close to each other, you improve your conversion rate and create cross-selling opportunities.
By implementing the practices above, you increase the chances that every visitor finds the products they need in your store.
Contact us today to discuss your business needs and how anavid can help you achieve your goals.