Which metrics to monitor and the tools to help you do so.
There is no doubt that brick-and-mortar retail remains as important as ever. According to Coresight Research, retail store openings outpaced closures in 2021—with openings seeing a 3% increase from 2020. Today’s consumers still want to shop in-person, but with the prevalence of convenient online options, they’re no longer willing to just shop anywhere. As retail shopping habits have evolved, it’s been increasingly important for retailers to refresh their strategies to keep up with shifting demands. From advertising and marketing, to merchandising and in-store layout, many retailers have had to revitalize key aspects of their business. But how do you know what’s working and what’s not? Today, there are plenty of tools to help you measure the impact of your new strategic efforts.
Ultimately, an uptick in sales is the main goal of any new strategy—but there are a lot of different metrics along the way that can help you evaluate and refine your approach. Just because a new approach isn’t immediately translating into higher sales, that doesn’t mean you need to throw out the entire plan. With comprehensive measurement strategies, retailers can more easily identify specific pain points and adjust certain aspects of the program to work more effectively.
Here are a few key metrics to monitor—along with helpful tools for doing so:
It’s simple: the more people in your store, the more opportunity you have to sell to them. But even before a sale is made, foot traffic can be a good measure of how well your marketing and advertising efforts are doing. Are you reaching enough people? Is your message resonating with local shoppers? It can also tell you more about your customer’s organic shopping habits. Does your traffic spike during certain months or stay steady throughout the year? All of this is valuable data that can better inform your marketing budgets.
There are a number of different ways to measure foot traffic in your store. Beam counters are one of the most widely used options. Positioned at the entrance and exit of the store, beam counters utilize sensors to monitor how many people are coming and going. While straight-forward to use, these devices do come with a down-side—they often record inflated numbers, since there’s no way to differentiate between actual customers and employees or accompanied children.
To overcome that difficulty, some stores opt for an even more low-tech option: an employee that counts customers manually. This can be a greeter stationed at the entrance of the store, or someone behind the scenes monitoring surveillance footage.
Of course, looking to foot traffic alone will not give you a full picture of the success of your store. It doesn’t matter if your store is constantly packed if no one is actually buying. By monitoring foot traffic though, you can compare that number against your total sales to calculate your store’s conversion rate. This data point is a better indicator of your overall profits and losses.
What do you do when your conversion rate numbers aren’t where you’d like them to be? You have to dive a little deeper into what’s not working within your store. By exploring how shoppers are engaging with the retail space, you can pinpoint the places where you can improve.
Building on the concept of beam counters, today retailers can use something called “computer vision” to gain more in-depth insights into both foot traffic and shopper engagement. This AI-enabled technology allows “digital camera systems to understand the content of images” to deliver comprehensive customer behavior analytics in real-time. This includes analyzing average shop times and identifying both hot spots and dead zones in the store. With this information, retailers can better optimize their layout and merchandising strategy to facilitate more sales, in addition to determining the proper associate-to-customer ratio.
Another way to do this is through Wi-FI counting, wherein shoppers’ smartphones are connected to the store network to gather information about their movement patterns. A clearer picture of how people walk around the space can help retailers identify which products they’re interacting with the most—and which ones they may be missing. This information can help drive a store redesign or even a merchandising overhaul.
The New “Retail Engagement System”
Designed specifically for the mattress industry, the new Retail Engagement System from Sleep Systems Inc. is a sensor pad that goes under the mattress to measure comfort details of consumers in real time. This data, along with other SKU-specific details, are shared with a cloud-based system to provide retail management with greater insight into which models consumers are engaging with and ultimately purchase. By measuring the frequency with which each model is shown, the duration with which customers stay with each product and a whole host of other data points, the system can help retailers identify their best-selling products. In turn, this data can help retailers “better allocate marketing budgets toward better selling products, enhance merchandising and showroom placement for SKUs and convert traffic into sales,” the company says.
Measuring Across Platforms
In today’s retail climate, there is no way to evaluate your brick-and-mortar efforts without taking into account your ecommerce activity as well. Looking at your in-store and online channels independently ignores the growing number of consumers that shop across platforms. According to McKinsey, omnichannel customers shop 1.7 times more than single-channel shoppers—and they spend more too. Not only do today’s retailers need to make sure their in-store and online channels are working together seamlessly, they also need to make sure they’re putting their evaluation metrics within the cross-platform context.
This is especially true for retailers that sell mattresses. The mattress buying journey has become increasingly cross-platform over the years. Today’s consumers typically start the process online with research, then head to a store to rest-test their options in person. Ultimately, that shopper may end up heading back home and making the final purchase online. A seamless omni-channel retail experience will ensure that retailers retain those rest-testers, even if they’d prefer to buy online.
If a person walks into your store, rest-tests a bed and then leaves without buying anything, that will be reflected in your conversion rate. But if a person walks into your store, rest-tests a bed and then leaves and buys that bed from your website from the comfort of their home—then that’s a win! The question is: do you have the evaluation systems in place to make that distinction?
Placing QR codes on in-store signage can help direct a shopper to where they can buy online—and, with the help of UTM codes and Google Analytics, allows the retailer to track which online purchases came from in-store visits. For a more personal approach, consider sending a short follow-up survey after every sale to help identify the purchase journey.
It can feel a little overwhelming to try to juggle all the different metrics and analytics that are available in today’s world. But by pinpointing and monitoring just a few key data points, retailers can take a more informed approach to enhancing their marketing, merchandising and sales efforts.