customer traffic vs. customer conversion ks

7/29/2019 Customer Traffic vs. Customer Conversion KS

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Customer traffic Vs.Customer conversion

INCREASE CONVERSIONS - ENHANCE

SALES


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Copyright 2013 JDA Software Group, Inc. - CONFIDENTIAL

Contents

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1. Customer traffic2. Customer conversion rate

3. Bottlenecks to conversion

4. Improving conversion rates

5. Conversion strategies

- Collateral or link sell

- Selling accessory

- Up-selling

- Cross selling

6. Incremental sales performance equations

7. Best practice moving on 5 Ps to 6 Ps, futuristic approach


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Customer traffic

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Customer traffic Transactioncounts

Customer traffic- the totalnumber of people came to thestore (buyers and non-buyers)

Transaction count- the numberof people who made a purchase


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Conversion rate- most critical

retail performance metrics

Ex- A store logged 500 traffic count and 200 sales transactions,conversion rate = 40% (i.e. 200/500*100)


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Sales staff effectiveness -

Staff levels -

Visual Merchandising - POS availability-

Cashiers effectiveness-

Promotional strategy-

Product mix, availability and price-

Buying group size-

Competitive environment-

Bottlenecks to conversion

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1. Understand why people dont buy

-long queue at the tills, fitting rooms

- inexperienced sales staff & cashiers ineffectiveness

- appearance & grooming, product knowledge,professionalism, compensation plan

- out-of-stocks

- impact-less visual merchandising and the list goes on.

2. Align staff to traffic not to transactions- Matching staff schedules Vs. traffic volume timing in

store

- Pay particular attention to lunchtime Dynamic roster

- unplanned staff breaks seriously drags downconversion rates

Improving conversion rates

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7/22Copyright 2013 JDA Software Group, Inc. - CONFIDENTIAL

3. Look for conversion leaks - plug the holes

- high traffic low conversion rate

- low traffic high conversion rate

- take control of peak trading hours by day and by week

4. Set conversion targets by Dept.

- define goals & targets for each dept.

- every store is unique - set conversion targetsuniquely

- 1 store profitable at 15% conversion rate another may beunderperforming at 30% conversion rate

- trick is to move conversion rate above stores performance


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5. Make conversion a team sport

- best way to improve conversion is to ensure all staffunderstands what conversion is and that each of them helpsinfluence it

- collective team effort: Sales staff CashiersVendor staff Visual Merchandisers Other in-store staff

- dont think of conversion as merely a business metric

- measure how well the whole store is doing at helping peoplebuy

- discuss targets and share results

- get staff excited about moving the conversion needle and itwill significantly improve results


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1. More buying customers- customer visit a store and many even consider buying

- increase conversion by breaking down the barriers to makinga purchase

2. Sales from other business units- influence customers to visit and buy from your otherdepartments or brands during their visit

3. Secondary shoppers

- influence those who accompany your primary shoppers4. Circle of influence

- influence customers to invite their circle of friends to yourbrand

Customer conversion strategies

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Collateral or Link Sell

Focus on selling co-ordinates

- ensure staff and customer is made aware of the range andbrands in the store

- having reasonable width in product line empowers to sell

co-ordinates inducing further buying

- Ex, footfall in 1 store is 300 customers/month and if asalesman can induce 25% of these customers to buy 1 moreadditional product, this generates an extra sale of 75 pieces


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Sell at least 1 accessoryper bill

Accessories

- accessories are presently the least focused-on by many of theRetailers/Stores.

- have clear focus and target on accessories e.g. caps, belts,handkerchiefs, socks, ties, flip-flops, etc.

- if sales staff do suggest any accessories to customer .i.e.handkerchiefs, caps, belts, undergarments etc. the customermany a time, will not resist.

- it is a Win - Win situation for both sides.


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Up Selling

Up selling: Sell higher-price-point products- customers are price-sensitive, stock aspirational products thatare at higher-price-point

- the trick of the trade is to create such zone for the customerwhereby they feel comfortable with the presence of products atboth ends of the price spectrum

- a salesman should be able to highlight all the F.A.B elements

to customer in pleasing, honest and convincing manner

- most customers will graduate to aspirational products if theybelieve that the decision was entirely theirs

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Cross Selling

Cross Selling

- guiding & helping customers on availability of other brands &merchandises with in the branch and other branches as well, to

suit their needs

- in case of out of stock check availability with stores and directthe customer, if feasible initiate store to store transfer

- suggest co ordinates from other brands to suit customer needs

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Incremental sales performanceequation

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The following equation identifies the three key variable thatgenerates sales result: Retailers should know how and whichlever to press

In order to generate 50,000 sales store has to convert 50% of 1,000 people

who visited the store and has an average sales value 100

50,000 = 1,000 X 50% X 100




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If the retailer wants to drive sales up to 75,000, there arenumber of different ways this can be achieved:

1. Increase traffic volume

Drive the traffic volume up by 50% to 1,500 (through advert or promo)

and maintain 50% conversion rate and 100 average sales then ..

75,000 = 1,500 X 50% X 100




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2. Increase conversion rate

Drive the conversion rate up to 75% (through sales training, staff

availability, approach and clear strategies) even if traffic and average

sales remains constant..

75,000 = 1,000 X 75% X 100




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3. Increase average sales

Increase the average sales from 100 to 150 (through offering new

higher-end product line, increase add-on sales, link sell) even if traffic

and conversion remains constant..

75,000 = 1,000 X 50% X 150




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4. More than one variable: If the retailer can positivelyimpact more than one variable the result is a multiple effect

dramatic impact on sales

Increase the conversion rate an additional 10% (.i.e. from 50% to 60%

and drive the 500 incremental traffic (.i.e. from 1,000 to 500) holding the

average sales at 100 then

90,000 = 1,500 X 60% X 100



Customer count & conversion

The 5 Ps of Retail business:

-People: Do you have right people?

-Place: Right store locations and products placement?

-Product: Do you have the right products to sell?

-Price: Is the product rightly (competition) priced?

-Promotion: Do you have right promotion strategy?

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Best practices



Futuristic approach- John Lewis

The 6th P is Pixel (Technology)

Companys background

- John Lewis is U.K one of the largest retailer

- opened 1st store on Londons Oxford Street in 1864

- presently runs 37 stores (29 Dept. store, 8 smaller format )

- annual turnover US $ 5.2 billion

- J.Ls strategy: lead U.K market in omni-channel retail

- on-going sales growth is highly dependent on combined in-shop and on-line experience by keeping customers engaged

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Best practices



- Challenges

Make the online and in-shop environments synonymous to capture more

cross-channel shoppers

- SolutionsPilot-test a virtual fashion mirror, Cisco StyleMe, to differentiate the in-

store experience, create cross-channel shopping behaviors and

demonstrate John Lewis' passion for innovation

- Results 1,402 customers used StyleMe - an average of more than 40 customers

daily

Customers of all ages enjoyed the experience, with 67 percent giving it

a positive assessmentJune 2012 J.L tried and installed CISCO St leMe 21

Best practicesFuturistic approach- John Lewis

Cisco StyleMe Virtual Fashion Mirror.flv


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customer traffic vs. customer conversion ks

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