How To Increase Sales By Counting Store Visitors

Updated: Feb 28, 2020

Physical retail loses on average 8% per year to the online retail machinery. The convenience of shopping through your hand phone and receiving the goods at the doorstep is so momentous that a century-old retail industry is disrupted to its core.

However, the physical shopping experience has a very unique and invulnerable trump card that the online industry can never replicate. The physical experience of walking down the high street or going with the family to the mall and being inspired by new products, trying on clothes, snacking on delicious F&B offerings, and the social aspect of mingling with other fellow humans, are all reasons why physical retail will always remain in our daily lives. But physical retail will certainly become smaller and those who don't want to wall off the plate need to become smarter. Because only those who constantly improve the physical shopping experience will be around tomorrow. How to improve? That's the wrong question.

First of all, you need to establish a metric that enables you to compare. Otherwise you don't know if you are improving. If the Store Manager changes a product display, how does he/she know if store visitors spend more time inside the store? If the Store Manager employs additional cashier staff, how does he/she know if the conversion rate increased?

count people and time spent per zone
How much time do store visitors spend in each product segment?

No, Sales as a KPI is not enough

The sales metrics (i.e. number of sales transactions or the amount of sales per day) is an insufficient key performance index (KPI) as it only measures the final outcome but ignores the sales funnel. If you only review sales as your store performance indicator, you exclude the actual performance of your store - what happens inside your store. How well is the store attracting people from outside into the store? How well are the products and product departments arranged to increase basket size? How good is the store layout and the checkout operations to ensure a smooth shopping experience?

Successful Store Managers want to understand what happens inside the black box - because it's the inside store action that generates the sales outcome. They understand the impact of having operational KPIs which address the entire sales funnel of a physical store.

Technology to the rescue

Yes, of course there is technology which is able to provide those missing operational KPIs. These are tech gadgets which can count and quantify key aspects of a store's operational performance, such as number of visitors, average time spent per customer, number of returning customers, and average customer cashier queuing times. This technology is today called In-Store Analytics, or in simpler words a people counter, even though it does so much more than just counting people.

There are 7 key different technologies that can count people. Each technology has its benefits and downsides. Our article 7 Technologies That Count People will give you a good overview with all pros and cons. Some technologies are old and not good enough anymore, like the Active Infrared or Break-Beam sensor which was a big deal 15 years ago because you could count people. But today, we need more. How much more?

What do Store Managers really need to grow sales

In order to understand how shoppers convert to customers, Store Managers needs to know, monitor and improve these KPIs:

  • Number of visitors per store (most basic!)

  • Number of visitors per area/department at which time and day

  • Average time spent per visitor per area/department

  • Pass-by traffic (how many people are passing by outside your store)

  • Entry conversion rate (how many people from the outside enter the store)

  • Average customer queueing time (at the cashier counters)

  • Recurring visitors (how many customers are returning and how often)

  • Path-to-purchase (in which order do customers walk through the store before purchasing)

The most suitable technology for getting the above KPIs is WiFi tracking or so called Probe Request sensors as they are most accurate, inexpensive and fulfil the actual requirements needed. If you have a bigger budget and privacy concerns are not an issue for you, then you can consider cameras with face recognition software - this will give you the additional advantage of knowing our customers' demographics such as age group, gender, race.

Once you have selected your operational KPIs and the supportive technology in place, you can start improving the store - change product displays, window decorations, promotion posters, cashier queues, product selection, etc. After each change, monitor the relevant KPIs for 1-2 weeks and you will know if you improved something, or worsened it. This shall be a continuous effort of improvements and fine-tuning.

You will notice that operational improvements will lead to a sales improvement.

Watch this space for our next article where we will discuss the impact of cashier queues on your sales performance, and how people counters help to improve. Do you know the average queueing time of your customers? Do you know how many customers a cashier staff can process?

Do you know your average customer queuing time?
Do you know your average customer queuing time?

#instoreanalytics #retailanalytics #peoplecounter #customercounter #retailhacks #salesgrowth #storeoperations

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