This blog is a little meatier than usual, probably best consumed by hardcore retailers as opposed to those with a flirting interest, or who read my missive for shopping tips.
There will be a short break in broadcast as I go on hiatus (I’ve desperately been looking for a time I could use that word; it makes me feel like Oprah). Yes, on hiatus returning mid-January. So all the very best wishes for the festive season and I look forward to sharing more retail musings in 2014.
Perhaps you are in full festive celebratory mode as the cash registers ring or you are at your wits end as Mariah Carey Christmas Carols play on rotation. But after the indulgence hangover wears off next week and you hopefully relax and enjoy some time in the sun, take a few minutes to mull over how you can continue the retail trading momentum in 2014.
So let’s talk conversion.
Canny retailers focus a spotlight on conversion rates. They are a powerful lever to pull in tough times. The lead into Christmas and Boxing Day/New Year trading often means we are in a head down, bum up bubble but it’s wise to look up occasionally.
Improving conversion rates is the most overlooked trick in the retailer’s book but to turn the spotlight on conversion you need to know where it stands today.
I am constantly surprised by the number of retailers that don’t have a clue about their store traffic statistics. Last week I spent time with a national retail chain who had never even contemplated the concept. My advice for 2014 is if you don’t measure your store traffic, stop and find a way to do so.
Don’t mistake traffic for the other‘t’ word retailers adore, transactions. To find your conversion rate simply divide the number of transactions with the number of shoppers who visited your store. Now you are really measuring the percentage of shoppers who buy, or not, in your store. Door traffic counters are easily accessible and money well spent. I do roll my eyes at the argument “what about staff walking in and out of the store and courier drop offs”. It doesn’t matter. Once you have a stake in the ground you will consistently measure the same metrics. It may not be perfect, but it is much, much more valuable than nothing.
To put a stake in the ground by measuring conversion you will reveal the missed opportunities, the lost sales, and the potential to improve.
Mind the gap
The next step is to understand the ‘not’ shoppers and give them reasons, opportunity and access to become true shoppers and make a purchase.
Do you really know why shoppers leave your store empty handed, or with a lighter basket than they should? What shopper insights do you invest in or what observation techniques are you using to identify the gaps in a shopper’s in-store path to purchase.
Some of these gaps will literally be gaps where product should be. It simply isn’t on the shelf. Mark this one up to poor inventory or buying management. I am a frequent shopper at local wine stores and don’t mind a bottle of two of Proscecco. It seems I am not alone in developing a sudden passion for Proscecco as my neighbourhood shops are selling through weekly and look at me quizzically as I leave the store, nothing in hand, to continue my search. A missed sales opportunity and failure to recognise a trend; it’s not like I haven’t told them. Hello people, you cannot sell fresh air or Chardonnay to someone who doesn’t want it.
Other gaps are due to confusing, poorly thought through in-store layouts and poor merchandising.
‘I can’t find it’ is a phrase retailers should not hear from customers (or staff for that matter). On a trip to a local pharmacy I went in search of a new fragrance advertised. But lo and behold, the tester was behind the counter under lock and key, so it was easier to go to a department store I could easily navigate with total control.
Hard to come by, difficult to communicate with or absolutely impossible to find sales assistants pose serious challenges to converting browsers to purchasers. Checkout obstacles such as queues too long or frustratingly flawed self-checkouts can put off even the most determined shoppers.
The good news? Many of the stumbling blocks to better conversion rates are easy to observe and remove. Uncover the gaps and you uncover sales potential.
A nugget of gold for Christmas from me to you ……..Just be there
Of all the retail principles, the simplest is being there when shoppers are. Don’t calculate how many staff you need by looking at sales data. Instead look at store traffic and assess the sales potential if more browsing shoppers can be converted to paying customers. Arrange sales staff lunch breaks outside of shopper lunch hours. Track if your traffic pattern is affected by school drop-off and pick-up times or drive time and adjust your staff roster so they are there when it counts.
Ready, Aim, Fire
If you are serious about improving results set yourself some targets. Each store has its own conversion rate which varies by retail sector, location and sales staff performance. Whatever that rate is today, record it, share it with your team and aim to improve on it. Collectively understanding the impact that improved conversion rates will have on business and motivating everyone to pull in the same direction will give you a much higher chance of success. Equip your team with the strategies and tools to maximise sales and then measure, acknowledge and reward their success. Boosting morale goes a long way to boosting sales.
An example in the flesh…………..Cloves and mint sauce
They are not every day grocery items, but still, if they are not on the shelf, you can’t sell them. During my time within a major supermarket retailer, the fledgling online shopping business provided insights about why people weren’t buying. Most often the product was out of stock. Simple fix. On top of that we also implemented rules for precious seasonal retail events to maximise conversion including a ‘Top 50 things we must have in stock at all times’ list. Cloves, trifle sponge, cranberry jam and mint sauce are just a few Christmas products for which there are no substitutes. By always having these products in stock conversion rates and, I like to believe, shopper satisfaction were the winners.
With focus, most retailers find a trick or two to improve their conversion rates and the changes required to do so come without significant cost. It’s worth putting the spotlight on conversion rates in your stores. You’ve got everything to gain.