Store Traffic Analysis

One of the strongest trends in retailing is traffic analysis and people counting. Due to the tremendous capabilities of technology, many retailers are now counting people entering their store and comparing their traffic counts with sales movement. This analysis allows retailers to determine if they need to focus efforts more on increasing traffic, or increasing sales within the store.

There are many types of technologies that aid stores in people counting, which is the process of counting individuals as they enter a retail store. Sensors, infrared rays, laser technology and more allow retailers to maximize marketing efforts. Technology placed at the store entrances allows for the counting of people as they enter the retail store. Advanced technology can even give retailers information on the flow of people as they move within the store. This can greatly enhance product and salespeople positioning.

If a retail store is having trouble generating or growing traffic flow, the marketing issue would seem fairly clear. The retailer wants to advertise or communicate with its markets to drive traffic to the store. Getting people to the store does not always guarantee sales or optimized sales. Many retail research companies report store traffic conversion, the ratio of sales to traffic, as being around 18-22 percent. This means that roughly one in five customers entering a typical retail store will purchase from that store on a particular visit. This percentage is surprising to many retailers.

Some stores obviously will have higher demand and some will have lower based on the nature of their businesses. Car dealerships and more expensive or risky investments will probably be lower, while one-stop shop department stores probably have a higher conversion ratio. However, a retailer’s conversion ratio is an important statistic to use for sales growth. If a retailer knows it is currently operating at around a 19 percent conversion ratio, it will want to set a goal to increase this for the coming months and years. Perhaps twenty percent conversion would be a good goal for the next month. While this may not sound like a significant difference, simple math can show the impact this small percentage increase would have. If a medium-size department store has 10,000 customers in a particular month, a 19 percent conversion rate says that around 1,900 of those customers will buy. Next month, if the total customers are 10,000, and conversion grows to twenty percent, 2,000 customers will buy. This is an increase of 100 purchasers. Depending on the products or volume of purchases, this could increase monthly sales from hundreds to thousands of dollars.

Once retailers determine their goal for sales conversion, they must develop and implement a plan to make this happen. There are many options, including: Better sales training, more incentives, better product positioning and in-store marketing, sales promotions, better service, and product guarantees. Advanced monitoring showing traffic flow within a store can be helpful with this as well, as it can indicate effective positioning of salespeople and products.

Many researches suggest that around seventy percent of product purchase decisions are made at the point-of-purchase. Analysis of store traffic inflow and movement can give a retail greater insight into the best methods for sales and customer growth. Retailers can determine where to invest their time and resources by analyzing traffic to their stores, and sales success once customers are there. Additionally, many retailers use traffic information for scheduling as it can be a more accurate depiction or required assistance than actual sales volume.