Data drives business strategy. Business decisions ought to be based on hard data. Making business decisions without using data is like driving blind in a sandstorm. You can make it out unscathed, but you’re much more likely to ram yourself up against a post or a wall.
For those in retail, foot traffic is one of the most vital pieces of information when doing business. At its core, it is the answer to the question, “How many people visited your store?” And you get the answer by using people counting technology.
People counting yields a wealth of valuable retail insights. The following are some of the essential retail analytics that footfall counting provides and the different ways by which you can utilize them.
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Naturally, people counting systems provide foot traffic data. At the most basic, the answers to the following questions comprise foot traffic data:
- How many people entered your store for the whole day?
- How many people entered your store at a given period?
- How many people were inside your store at a given time?
- When do you have the most traffic?
Why is it important to know your foot traffic or people count? Well, people coming into your store are potential customers. When you have more traffic, you have more potential customers, and the more people you can potentially convert into sales.
Foot traffic or people count is also the basis for calculating conversion rates. Conversion rate is simply the number of transactions divided by potential customers.
Strategizing Based on Foot Traffic Data
Armed with foot traffic data, you can do the following:
1. Work to increase foot traffic.
Knowing your current foot traffic, you can devise strategies to increase it. And why would you want to increase foot traffic? Because more foot traffic leads to more revenue.
Specifically, a study by Perdikaki et al. published in Manufacturing & Service Operations Management in 2012 reports that increasing the per-hour average foot traffic by one unit increases the per-hour average sales volume by USD 9.97.
2. Evaluate marketing campaigns.
By observing your footfall data after launching a marketing campaign, you can evaluate your campaign’s effectiveness. Did more people come into the store after the campaign? What was the extent of the increase in foot traffic, if any?
3. Make correct staffing decisions.
If you know when people are coming in to shop, you can allocate your staff appropriately. During peak hours, you can make sure most staff are on the floor assisting customers. You can assign them administrative tasks during off-peak hours. Likewise, you can employ part-timers to assist your full-time personnel on peak days.
Accurate staffing is vital in retail. The same study by Perdikaki et al. indicates marginal returns to traffic increase from $10.00 to $11.32 when labor increases by one standard deviation. Naturally, your customers will have a better overall experience when you have a sufficient number of people on the floor to assist them.
Advanced people counting systems will measure footfall patterns or people movement.
Using data collected from customer movements, advanced machine learning algorithms will tell you whether potential customers go left, right, or straight once they’re through the door. It will also let you see where customers go, pause, spend the most time in, and how they are using your retail space.
It will tell you about long queues, where they are, and when they form. And, using supplementary information from operations, you should be capable of telling why there are queues in the first place.
Strategizing Based on Footfall Patterns Data
The following are things you can do based on your footfall pattern data:
1. Optimize your layout and staffing to improve conversion.
If you notice that a particular in-store display draws a lot of people, perhaps you can rearrange your store layout to put engaging in-store displays near the back of the store.
It should still be prominently visible from the front of the store, of course. People coming in must see it immediately. However, by placing it at the back of the store, you invite your customers to a journey through your other merchandise and encourage them to buy on impulse.
Alternatively, you can place a series of enticing displays throughout your store to encourage customers to move through your store in a particular way.
By knowing how people move through your store, you can be strategic about staff placement. If you notice customers falling away (exiting your store) right after fitting, perhaps you should assign staff around fitting rooms. They can encourage customers, provide feedback, and encourage them to fit more and, eventually, buy.
2. Optimize your space to improve customer experience.
Looking at footfall patterns, you’ll be able to detect in-store congestion and other potential customer hotspots. You can decongest these areas, provide more staff to assist in different hotspots and, overall, improve the customer experience in your store.
3. Adjust your conversion data.
Intelligent people counting systems should be able to detect people who go in through one door and go right out your other door. These people, obviously, are not potential customers. They are commuters who are simply using your store as a convenient point of transit.
You should also be able to detect those who come in groups but have only one basket. Only one is likely a potential customer; the rest just came along for the company.
By identifying commuters and shopping groups, you can adjust your foot traffic then calculate conversion data based on that adjusted traffic data. This should yield more accurate conversion statistics, which should be more useful when devising effective conversion strategies.
Footfall counting systems will also help you measure dwell times. Dwell time is the average amount of time people spend inside your store, and research shows that the longer the average time people dwell in your store, the higher your sales.
Strategizing Based on Dwell Time Data
Knowing your average dwell times, you can do the following:
1. Improve customer experience to increase time spent inside your store.
If the average time spent inside your store is positively associated with sales, then you need to work on increasing the average time shoppers spend inside your store.
For instance, since congested spaces discourage long dwell times, you can optimize your store’s layout to ensure no area is congested. You can also install self-service kiosks to improve customer experience.
Offering timely assistance to customers can also increase dwell times. You need to consider how your staff can help increase dwell time in your staff allocation decisions.
You can also equip your staff with iPads loaded with a cloud-based POS system. They can rove around your store or stay in specific high-traffic locations to help customers with their pricing and stock availability inquiries. They can even check out customers on the spot.
2. Increase average sales value.
If your store has great dwell times, congratulations! That doesn’t mean you don’t have to do anything anymore, however.
You can work on improving your customers’ average in-store spend, for one. You can train your staff in upselling and cross-selling. You can also offer discounts on bundled purchases.
By increasing the average value of each transaction, you can maximize the positive effect of your dwell times on your sales.
Measuring for Success
People counting yields valuable, actionable business insights. It tells you about your foot traffic, in-store footfall patterns, and dwell times, among other information. And based on these data, you can implement business decisions that have a favorable impact on your bottom line.