Harnessing the Power of Surrounding Store Traffic to Boost Profits

In the ever-changing and competitive world of retail, understanding customer preferences isn’t enough anymore. 

As more and more shoppers return to stores, retailers are shifting their attention to analyzing in-store traffic. But, what about the shoppers who haven’t yet entered the store? Historically, retailers haven’t had insight into the number of potential shoppers for their location. 

Surrounding store traffic, a concept gaining traction among high-performing retailers involves the analysis of foot traffic outside of the store. This allows retailers to gauge their share of traffic relative to nearby stores, providing valuable insights into their relative position against their competitors.

While a lot of research happens online before someone enters a store to purchase, there’s still a significant proportion (35%) of people who head to stores, just to shop. This leaves a substantial opportunity for retailers to tap into these shoppers’ discretionary spend. By understanding the patterns and preferences of not just their customers, but also those shopping at neighboring stores, retailers can develop more informed strategies to attract and convert more foot traffic into sales. 

Understanding this can help retailers calculate their share of overall shoppers in the area, an essential metric in understanding how much business is potentially gained from, or lost to, nearby competition. This insight is crucial in benchmarking against competitors and understanding a store’s relative performance compared to its location.

The analysis of surrounding store traffic also aids in evaluating strategic decisions. Retailers can assess the competitiveness of their current strategies and experiment with different store formats, experiences and product offerings. This data-driven approach allows for a more targeted investment in stores, store types or regions that show potential for increasing market share. 

The real-time nature of this traffic analysis is another advantage. It enables retailers to make informed decisions about store tactics, marketing approaches, visual merchandising and promotional activities. This involves continuous fine-tuning and A/B testing of the physical space. By measuring surrounding store and passer-by traffic, retailers can understand what attracts shoppers to their stores, a measurement akin to online impressions.

Lastly, when combined with existing in-store foot traffic data, retailers finally have a holistic view of the entire shopper journey and store performance. By combining in-store and surrounding store traffic data, retailers can identify where potential customers are dropping off during their shopping journey. With this data, they can then begin to analyze why they dropped and refine their customer engagement strategies accordingly.

Having greater visibility into the total traffic opportunity of their stores can help retailers take more effective actions to entice shoppers to enter their stores versus surrounding competitors. With this data, retailers now have a comprehensive view of store performance, encompassing not just the in-store experience but also the broader context of consumer behavior and competitive dynamics. 

As the retail landscape continues to evolve, understanding and capitalizing on surrounding store traffic will be essential for retailers aiming to thrive in this competitive environment.