Online stores measure their full sales funnel. Isn't it time brick-and-mortars do the same?
When Amazon compares brand performances, do you think they only look at sales? Wouldn’t it make sense for them to look at the number of visits on a brand’s page and compare it to the total number of visits on the site? Well, they do!
However, up until very recently, even the most advanced brick-and-mortar brands weren’t analyzing store performance the same way. Historically, retailers measured performance using only door counts and sales metrics. Only since Placemeter launched its platform are brick-and-mortar networks able to analyze the foot traffic in front of their stores.
When you look at how hard brick-and-mortar retailers have to fight against e-commerce, you can clearly see how this new layer of data will dramatically change the game.
Start where your customer’s journey really begins: your storefront
Have you ever walked past Dylan’s Candy Bar with your children? Didn’t their bright, sweet displays make the kids pull your arm to the entrance? What about a Starbucks? You likely noticed their familiar design and considered a coffee.
These stores have learned how to represent their brand in a way that’s memorable, recognizable, and effective at attracting their audience. Do your stores do the same?
Up until now, you could only measure what was happening inside of your store: where customers were going, what they were looking at, and how much they were buying. While this information is valuable, it doesn’t tell you anything about how you’re getting those customers in your store in the first place.
By looking outside of your store and measuring how many people are passing by, then comparing that number to how many people actually come in, you’ll understand exactly what it is that makes passersby become shoppers.
We call this number your Walk-in Rate. It’s a completely new, obviously necessary key performance indicator for retail.
Test first on pilot stores, then spread the perfect storefront throughout your network
All of your storefronts are built based on the same design. But what if you want to change your visual merchandising for the season? What if you want to promote a major sale or event? Will you change all of your storefronts at once? How will you measure the impact?
Just as e-commerce sites test different page layouts, brick-and-mortars can test the ideal storefront design (think: changing color, signage, and displays). To do this for your stores, pick pilot locations and measure your walk-in rate before and after making changes.
Remember, you want to look at a ratio (the number of people who enter your store compared to the total number of people who walk by it), and not an isolated number without context. If you only study the number of visits, you’re missing a big part of the story — weather, local events, street closures, and scaffolding can have a huge impact on pedestrian traffic, and therefore on store visits, without having any direct link to your storefront changes.
Use this data at a network scale to optimize opening hours and close under-performing stores
Managing hundreds or thousands of locations isn't an easy job. Making sense of each store’s data isn’t easy either. Some stores can be very successful, whereas others can encounter serious difficulties.
You can measure store manager and employee performances your conversion rate. But what if this conversion rate is comparable to that of your other stores, and yet the store’s revenue is still under your target?
You’ll need reliable data on that location’s performance to take action. If the sidewalk traffic passing by the store isn’t good enough, you can justify relocation or change your opening hours.
Comparing performance through your entire sales funnel, with all the context you need, enables you to make better and more understandable decisions.
Boost ROI at new locations
Now that you know everything about your existing stores you’ll be able to see, in advance, the traffic you need to break even.
Selecting new stores location will be much easier: quantify pedestrian activity at each of your potential locations, over a month or more, and profile the traffic depending on the hour and day. Make sure it’s matching your requirements — if you’re opening a coffee shop, you want traffic in the morning, but if you’re a clothing store, you probably want to see more people in the early afternoon.
With this knowledge, you’ll make a low-risk, data-backed decision sure to transform into revenue, that can also help convince franchise candidates.
Pop-up store performance: make a secure investment and measure brand awareness
When used as stages for sample sales, pop-up stores require central locations with high foot traffic. Shops stocked with seasonal merchandise, which are highly dependent on pass-by traffic, also need to make sure that traffic in their location will meet expectations before investing huge amounts.
When an e-commerce platform decides to go on the field to increase its brand awareness, the goal is not to dramatically increase sales, it’s to create engagement and make sure their brand is exposed to the highest number of people. Not everyone will enter the store, but that’s okay. Pedestrian traffic in front of the store is the essential measure of success in this situation.
Are you ready to think outside the box?
Big data is everywhere. Retail analytics has become a buzzword. But somehow, before Placemeter, there was no way for retailers to measure the top of their sales funnel.
To measure storefront attractiveness, to select new locations, to compare stores performances across a network, or to measure pop-up stores’ performances, retailers now have the solution to make data-driven decisions and increase their chances of maximizing their revenue.