April 13, 2022
Retail foot traffic is one of the most valuable metrics that business owners have at their disposal. Information derived from foot traffic analysis can provide valuable insights into how successful a business is, or if it needs some changes to meet modern challenges. Here are some ways to perform retail foot traffic analysis, and what the value of that traffic is.
Jump to a sectionRetail Foot Traffic: The Essential Guide”
Foot traffic analysis is meaningless if you’re not using it to better your business. Before you can start making improvements, though, you need to understand where your business is succeeding and where it’s struggling. Foot traffic analysis might provide you with the numbers, but what do those numbers mean? Here are some key performance indicators (KPIs) that can help you determine if your business is as successful as possible:
Track conversion rates by counting how many of the people who enter your business leave with purchased products. A reasonable conversion rate will depend on your industry, though research shows that 20-40% is a healthy average in retail environments. Conversion rates are also more stable than foot traffic measurements – foot traffic can fluctuate wildly due to outside factors like local events and holidays – making them a consistent measure of your success. If you’re paying rent for a high-traffic area but not converting foot traffic into sales, it’s time to dig deeper into other KPIs to find out what’s wrong.
Building owners will want to keep an eye on capture rates. A capture rate is a percentage of foot traffic entering a store in a building like a mall, which is an important metric when leasing out stores in your building. A low capture rate indicates that you aren’t leasing to the right businesses for your target demographic, making your building less lucrative for potential leasees.
What do visitors see when they walk through your store? Many will notice your staff and what tasks have them preoccupied. After all, your staff is your main differentiator from ecommerce platforms. Their role will only become more critical as time presses on, as evidenced by a report from CBRE indicating that the retail experience of the future will be “high tech fitting rooms” that are vital for “branding purposes and essential customer interaction.” Meeting those needs is predicated on how well-trained your staff is.
Visitors want helpful salespeople that make them feel heard and validated, and they want access to them as soon as the need arises. If you’re understaffed during high foot traffic hours, your visitors can’t get the help they need. If you’re overstaffed, you’re burning money on labor and may give off the impression that your employees are “lazy.”
Retail is unpredictable, so it’s unlikely you’ll have perfectly optimized staffing at all times. But foot traffic analysis will give you a relatively accurate prediction of your peak hours, so use that information wisely. Staff up for high volume times and leverage the lulls to your advantage, for example by training your staff on product knowledge during lulls.
Higher foot traffic comes with some downsides, as it means there’s a higher chance of visitors breaking things or dirtying up your business. Maintenance is crucial to keeping a business or facility running, and neglecting it can end up costing you more money in the long run. If your store uses interactive demos, there’s a good chance that something will eventually break down or be stolen. Retail foot traffic analysis can help you determine which areas of your store are getting the most visitors, and therefore which areas need to be cleaned and maintained the most. Presentation is important: clean displays and functioning demos will go a long way with customers. The same goes for entire buildings, which can have a hard time shaking perceptions of being unclean despite your best efforts.
Additionally, retail foot traffic analysis can help inform your product flow. Customers tend to look left then right when entering a store; coupling that with retail foot traffic data can help optimize product placements and digital signage locations. It depends on which products you carry, but optimizing product flow around foot traffic can help with sales in those rare instances when no salespeople are available. If your signage is effective and your high-margin products are placed where people are most likely going to grab them, you’ll have an easier time driving results when no employees are available to help.
A happy customer is a customer who is more likely to return. The pandemic has seen more people turn to ecommerce, but consumers still enjoy shopping in physical retail locations. And studies have shown that physical stores provide better retail therapy than online stores, meaning customers are happier after making a purchase at a brick-and-mortar location.
The goal is to provide consumers with the best retail experience possible, but that’s easier said than done. Tracking KPIs will help you ensure that your customers are having the best experience possible. It makes their wants and needs more apparent, helping you address any issues that arise. Luckily, modern tools have emerged that offer business owners valuable insights into who is visiting their store, when people are visiting it, and what might have influenced their behavior.
Resonai’s Vera platform is one such toolset with the added benefit of being easy to use. It helps business owners and property managers perform retail foot traffic analysis, making it easier to design product flows, provide personalized assistance to customers, and keep track of your store’s or building’s maintenance needs. Are you ready to learn more? Get in touch with Resonai today and set up a free demonstration.
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