Study: How to boost store conversion and traffic
Retailers are always asking how they can increase the numbers of shoppers who visit and buy goods at their stores.
According to a study from store traffic and conversion measurement provider HeadCount, “In-store Traffic and Conversion Study: Retailers Find Keys to Impressive ROI,” the answer lies in combining data-driven coaching with analytics.
HeadCount conducted seven discrete experiments spanning four retail verticals and more than 600 stores to measure the effect of data-driven coaching of store managers and the application of analytics on store traffic and conversion. Managers were provided with customer data and given specific instructions on how to interpret and apply the data to their store activities. In particular, researchers focused on traffic productivity, or sales generated per traffic count.
Aggregate results across all seven experiments showed the test group had a net sales productivity improvement of 537 basis points compared to the control group. That is equivalent to a $0.67 sales gain on every traffic count logged.
Across the four individual retail verticals that were included in the study, housewares had the highest net sales productivity improvement of 772 basis points, or $.1.01 sales gain per traffic count. Following were consumer electronics (652/$0.81), interactive media (441/$0.56) and apparel (210/$0.26).
Researchers also tested a short-form daily traffic and conversion scorecard which laid out the previous day’s traffic and conversion trends by hour, indicating where loss was occurring. The scorecard was given to store managers every day at 9 a.m. Test managers reported this “push” reporting was much more convenient than pulling data from the Web or gaining access to it via a portal, making the scorecards much more likely to be reviewed.
Big Lots makes big splash with profit growth, healthy sales
Another value retailer has posted a stellar first quarter, outshining traditional department stores and many specialty stores. Big Lots Inc. surpassed Wall Street expectations with net income and revenue performance that one major presidential candidate might term “huge.”
The discounter reported net income of $38.66 million, a 20% gain from $32.31 million the same quarter a year earlier, or 82 cents a share (excluding some items), topping the 70 cents projected by analysts. Big Lots also raised its annual forecast for earnings to as much as $3.50 a share. It had previously targeted no more than $3.35.
Net sales rose a better-than-expected 2% to $1.31 billion from $1.28 billion. Same-store sales increased 3%, the ninth consecutive quarterly increase.
“I'm very pleased with our first quarter results,” said David Campisi, CEO and president of Big Lots. “First quarter comps increased for the ninth consecutive quarter and were at the high end of our guidance range. Jennifer (Big Lots’ core customer persona) continues to respond positively to our strategic focus on ownable and winnable merchandise categories, improved merchandise presentations and more consistent in-store execution.”
Big Lots forecast same store sales growth from flat to 2% in the second quarter and low single digits for the full fiscal year. The retailer also expects full-year total sales to be up slightly.
Chargebacks 101: What E-Commerce merchants should know
Credit card chargebacks are a costly reality for online merchants. Chargebacks occur when customers contact their credit card issuers to dispute charges. If an issuer deems a dispute valid, the e-commerce merchant is required to pay the amount owed for the transaction plus a chargeback fee from the processer – which can range from $15 to $100.
Chargebacks represent a loss to retailers’ bottom line, especially if they occur on a consistent basis. For that reason alone, it’s critical to keep chargebacks to a minimum. However, it is not just about the chargeback itself and the monetary consequences that can occur. Retailers must also consider the negative impact on the customer experience and how chargebacks can impact their relationship with credit card processing companies. For instance, too many chargebacks can affect retailers’ ability to work with credit card processing companies, thus affecting the payment options in place for customers. Therefore, it’s important to understand what chargebacks are, why they occur, how to manage them, and most importantly, ways to reduce them.
What is a Chargeback and Why Does it Occur?
E-commerce merchants can face chargebacks for many reasons, initiated by the merchant, bank or by the cardholder. One of the most frequent examples of chargebacks is when a purchase has supposedly been made by a customer, but is actually a criminal who has entered another person’s payment credentials. In this case, the victim whose bank card has been used for the fraudulent payments will file a claim to have the illegally withdrawn funds returned. When this happens, the bank initiates chargebacks to retailers after receiving documentation from cardholders that the specific transactions were fraudulent. In addition to the reversal of fraudulent payments, online merchants are assessed an additional fee by their own processing banks.
Aside from fraudulent transactions, customers may also dispute charges – issuing a chargeback – in any of the following ways:
• The customer did not receive the goods or services purchased
• The goods were defective or arrived not as described
• Buyer’s remorse – such as a product not arriving as expected or the buyer regretting making a purchase
How to manage chargebacks
The best way to manage chargebacks is through a case management system. Each chargeback that is received has a unique case number whether it is from PayPal, Visa, MasterCard, Discover, or American Express. Each of these providers has its own case management system, but there are also all-in-one case management solutions if one finds it tedious to check each tender. During particularly busy retail seasons, such as the holiday season, it’s important for retailers to ensure they have a trained and dedicated team to handle and expedite disputes. By focusing on recovering lost funds, retailers can ensure they don’t lose excessive funds from chargebacks.
How to lower chargebacks?
Once a chargeback has been initiated, it’s the retailer’s responsibility to respond to the chargeback notice. This process can be cumbersome, so retailers should reference the following ways to help lower chargebacks:
• As mentioned earlier, one of the primary causes for chargebacks is buyer’s remorse, so it is important retailers have a clear contact phone number on the website for customers to call. If customers are not sure if they made a purchase, they may reach out to the store or customer service team to find out more information on what the purchase included. This can lead to a chargeback not being issued if the retailer can solve the cardholder’s problem ahead of time.
• Retailers must respond to chargebacks as quickly as possible. This adds a lot of value and is part of the overall customer service experience any business should offer.
• Retailers should always ensure they receive full authorization for an order. This can be done by verifying you have received authorization for the proper dollar value of the order. To prevent improper authorization chargebacks, which are initiated by banks, an online merchant should get authorization for each package they ship out from their store/warehouse. If you receive authorization for an order and do not ship it out within seven days you need to get authorization again before shipping out the order.
• It’s vital not to charge the customer until the items are shipped. There is a difference between an authorization hold and the customer being charged. The customer should not be charged until the goods leave the warehouse, or the services have been provided.
• Refund information on receipts or packing slips should be included in every shipment. Retailers should make it easy for customers to find the refund policy and procedures online. Being able to return an item is less costly and time consuming for customers than retailers having to file a chargeback. This also creates a better customer experience by making it simple and easy for customers.
• When the chargeback is received, verify the customer’s address by calling the Voice Authorization Center for the specific tender. Retailers also should verify the customer’s name on file, their address, and the phone number.
• Retailers should receive a signed proof of delivery for each package that is shipped. Also, collect and keep a record of the tracking number used for each package to show the specific tracking from warehouse to the customer’s door.
• If providing goods or services online, retailers should clearly and accurately describe the products or services. Also, a customer testimonial section or a “Contact Us” section for a potential customer to reach out and learn more prior to a purchase can help to lower chargebacks. Examples of services that are sold online are remote computer diagnostics, online consulting, website purchases, digital products, and website memberships.
Chargebacks can be a costly nuisance retailers operating in the card not present space. While chargeback cases can be won, it’s important that retailers understand the many ways chargebacks can occur and the detrimental cost incurred by frequent disputes. Thankfully, there are preventative measures to reduce chargebacks, benefiting not just the retailer’s bottom line but the overall customer experience.