Retail Conversion Rates
Your first step is to count how many people visit the store each day. There are two ways to do this:
- Have employees count visitors manually.
- Install sensors that measure footfall.
When doing this, it is important to estimate the number of people who cannot be counted among customers but are entering and exiting the store regularly, such as:
Couples and families should also be counted as one customer. You will need to examine the people (and groups of people) who regularly enter the store to work out your average customer count.
In a toy store, you might see a couple come in with their two children and make one purchase. Counting this as four people making one purchase will negatively skew your figures. You need to count these groups as one “customer” to provide you with a more accurate conversion rate.
Using data from your cash register, track the number of purchases made during the same time period as when you’re counting your shoppers. Then, simply compare the number of single purchases to the number of shoppers. The answer is your retail conversion rate.
In a department store such as Myer, shoppers might make purchases at different registers throughout the store. If this is the case, then instead of counting per purchase you will count data such as credit card numbers to measure the number of individual buyers.
Comparing Conversion Rates
Compare conversion rates from different days, weeks and months to see how they’re trending. Ensure you compare conversion rates before and after making changes within the business. Doing this allows you to see how successful those changes are.
Just as you compare conversion rates before and after changes in your business, you should also compare rates before and after marketing campaigns. Over time, this will confirm which campaigns are working for you.
Conversion rates can go down during a marketing promotion. This can happen for many reasons, such as:
- Overcrowding, causing people to leave before they get to the checkout.
- The most desired products selling out early, causing shoppers to leave disappointed.
Say McDonald’s had a promotion with 28,000 free Big Macs offered on a first-come-first-serve basis. If 60,000 people arrive throughout the day, the remaining 32,000 people could leave with nothing, severely damaging the restaurant’s conversion rate for the day.