Online retail knows everything about you, but stores are not even sure you were there.

The old saying is "build it and they will come." One of the greatest challenges for retailers today is they are not exactly sure if you will come, or in fact track if you did. Traffic X Conversion = Sales. While much of the current focus on "consumer experience" has been to improve conversion performance, comparatively little has been done to track and improve store traffic. In contrast, online retailers know an amazing amount about you as a consumer, how you shop, where you went on their web site, shopping cart traffic, closed sales and how you left their online store. Most retail stores are barely able to count if someone came in.

In working with retailers around the world, I'm amazed at how retailers are collectively improving on measuring financial results that count. Beyond the basic financial metrics of volume, revenue and margin, most retail chains are measuring assortment and inventory performance through metrics like Inventory Turns, Stock to Sales Ratios, and many are moving toward GMROII – Gross Margin Return on Inventory Investment. Even the smallest retail chains are measuring some form of "Market Basket", at least in terms of ratios of profitable accessories attached to a core item like a PC or Tablet.

However, when it comes to measuring consumer traffic in store, most retailers either don't track it, or they are using the same archaic technology from twenty years ago. The standard retail way to measure footfalls is "Beam Break" technology. Most retailers have a main front door, so they install an infrared beam across it. As each consumer walks through, they get a count, and they simply divide by 2 to account for traffic in and out of the store. I would estimate that 96% of retailers simply do not know: where those consumers went once inside, if they looked at any of the merchandising or promotions, or what their journey looked like while in the store.

Why footfall traffic is a critical retail metric, especially for stores

Retail stores are literally in a life and death struggle with ecommerce for consumers. Both retailers and their vendors are spending increasing amount to remerchandise the stores, offer promotions to incent consumers to come, train staff to engage consumers in new ways, and generally improve the overall shopping experience of consumers. After making all of these investments, the typical metrics to measure results are increases in revenue, improvements to gross margin dollars and/or increased sales over "comps".

The critical question: If there are no increases in sales or profits, was the fail due to lack of conversion based on better a consumer experience, or simply a lack of consumer traffic? Or conversely, if retail financial performance improves, how much of the gain is due to better footfalls of the right consumers, and how much is due to store execution? Given the declining margins and increasing pressures for ROI, both retailers and vendors who fund store based initiatives need more precision in measuring footfalls and the dynamics that drive store traffic.

Is that mannequin staring at you? High-tech tracking of footfalls

Obviously, footfalls through the front door tells you if consumers came, but doesn't provide any insights into where they shopped in store, what they looked at, or how long they might have stayed. There are number of high technology solutions available for retailers to track detailed footfalls and traffic patterns in store.

Heat map sensors: Some retailers have installed sensors in floors or ceilings to literally track a "heat map" of where consumers are present in stores. Heat maps can be constructed by day of the week and time of day to watch traffic patterns.

Smart displays: There is a variety of new technology that can be incorporated into interactive signage and merchandising displays. RFID sensors can measure what is touched and how long. Special cameras fitted into the displays can count how many stopped to look, their gender, and relative age (child, adult, "old").

Spy Cams: The latest technology enables incorporating very small cameras in a variety of places, including the eyes of mannequins. The mannequin cam can literally record a host of traffic details on whom, how long … and a host of other variables that exceed comfortable limits of consumer privacy.

You don't have to have high tech to measure footfalls & traffic right now

The general excuse I hear from retailers is that they don't have the money, time or resources to invest in high tech gear to track traffic. While the solutions mentioned above can be costly, there are a host of low tech alternatives available that provide much better insight than "beam break" counter technology on the main door.

Observation: While this involves some manual labor, it is extremely simple to do manual traffic counts in key areas of the store. With random sampling across time slots and days, the data can be very accurate and provide amazing insights into both traffic patterns, as well as what consumers are looking at.

Process/Procedures: We have worked with a number of retailers to incorporate consumer logging into product demos, service procedures and solution/consultation forms. While this won't track all footfalls, it can provide invaluable insights into the consumers that are most engaged and have the most purchase intent.

Security Camera Logging: Almost all retailers incorporate security cameras overhead. By doing systematic sampling of timed photos, it is possible to get highly accurate counts of footfalls and traffic for very specific areas of the store.

Mobility – Checking In: I have included this one under "low tech" since it does not require expensive store remodeling or hardware. By using applications such as Four Square or Side Kick, retailers can track consumer response to specific promotions and whether they in fact checked in at specific store location. It is perhaps the wave of the future as consumers change their behaviors and shopping traffic patterns.

Measuring footfalls is a metric that has been long neglected by most retailers. Yet, it is perhaps one of the most critical for store survival and development going forward. No matter how much a retailer spends to improve experience in key areas, it matters little if consumers don't make it through the door to discover what's happening throughout the store.

Come meet Chris at this year’s Retail Customer Experience Executive Summit! Registration is now open and early-bird pricing is in effect.

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