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Getting Aggressive with Traffic Counting

Tapping into the data to increase conversion — and sales

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The quickest, surest and most cost-effective way to increase store sales is to improve each store's conversion rate.

It's estimated that more than 50% of North American specialty retailers have installed traffic monitoring/counting systems in some or all of their stores. But many retailers have failed to take advantage of the fact that the data these increasingly sophisticated devices generate can help them improve performance and capitalize on sales.

"Most retailers have not used traffic counting data very aggressively. Even the people who are successful using it often only tap into a fraction of its potential to impact sales," said Michael Bunyar of SMS Store Traffic, Chambly, Quebec City, which provides traffic-counting equipment, software and services to stores around the globe.

Traditional wisdom says that the quickest, surest and most cost-effective way to increase store sales is to improve each store's conversion rate, and that is still true, according to Bunyar.

"Retailers often focus on increasing the volume of shoppers they bring into stores, when they should be paying more attention to the results obtained from shoppers already in the store," he explained. "If you currently sell 20% of your traffic, increasing the conversion rate by 1% can increase sales by 5%. It's not a stretch to say a store could increase sales by 20% by maximizing how they use the traffic data to drive up conversation rates."

Experts agree that how a retailer applies the data gleaned from a traffic-counting device is key to fully tapping into its potential.

"The selling point is not the traffic-counting device. It's the solution," said Eric Champagne, VP IT and logistics at Liz Claiborne/Mexx Canada from 1997 to 2011.

Champagne was an early adopter of traffic-counting technology. During his time with Mexx (and later Liz Claiborne after it acquired Mexx), he succeeded in doubling his chain's conversion rate over a three-year period using a traffic-counting solution from SMS.

"By working with SMS, we developed much more knowledge about how to use the system and how to use the key performance indicators to really drive sales up to a new level," Champagne said. Initially, some store managers felt wary about the system, worrying that it had "Big Brother" overtones.

Champagne, however, was convinced the new tool could help double sales.

Introducing store managers to the benefits of the system began with a discussion about what they could change, and what was out of their hands as it related to increasing store sales. Ultimately, according to Champagne, the managers came to understand that they could directly affect their closing ratio and average dollar per transaction using information provided by the system, which provides combined traffic and sales information they can use to guide their sales efforts.

The SMS program identifies key traffic patterns at each store on a daily basis. The patterns, according to Champagne, vary from store to store, but are very consistent on a week-to-week basis.

"Within a few weeks of collecting data, you can forecast how many people will come into your store on a Wednesday afternoon at 2:00," he said.

Once the patterns are identified, managing the stores to increase sales becomes much easier and more effective. In most cases, the answer lies in providing more effective customer service during the key traffic periods identified by the software.

"When we are able to forecast incoming traffic, we can get the store ready and staff it accordingly. That's how we were able to increase sales dramatically using the numbers," Champagne said.

This can occur in a number of ways, from altering staffing to providing more consistent customer service, to training, to setting more specific performance targets and standards. Another example is to ensure the top-selling associates are scheduled during the peak traffic periods.

By presenting the data generated from the traffic-counting devices, "You can show your top salespeople that if they work these specific 16 hours each week, they are going to make more commission for working the same amount of time," SMS' Bunyar explained.

At Liz Claiborne, this translated into an increase in closing ratio from 8% to 16%, despite the same amount of traffic.

The quickest, surest and most cost-effective method to increase store sales significantly remains improving each store's conversion rate.

© 2014