Omnichannel

Beyond the standard metrics: Measuring store performance in the digital age

John Kavulich, VP, IoT Solution Sales, Acuity Brands Lighting, Inc., explains why studying the customer journey, and the symbiotic connection between online and brick and mortar sales channels, can tell a retailer significantly more about what is driving store revenue and performance.

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September 10, 2020 by John Kavulich — Vice President, IoT Solution Sales, Acuity Brands

Revenue, sales per square foot, inventory turnover and transaction value are widely accepted measures of store performance. Easily quantified, these factors informed macro- and micro-level decisions long before the digital revolution and automated data analysis. With ever-increasing shopping options, retailers are working harder to gain consumers' dollars, attention and trust. Therefore, savvy industry leaders are expanding their analytical approach to gain an omnichannel perspective regarding store performance. According to a Deloitte survey, 88% of retail leaders are incorporating more mixed channel metrics into their planning, while only 8% of respondents believe their current metrics align with industry changes.

Shopper behavior is shifting as consumer choices increase. In response, industry leaders are expanding their success metrics to include information about consumer behavior and intent. Customer journeys and how well retailers integrate their online with brick and mortar retail models are two examples of these broader evaluation measures.

Customer journey

A shopper's in-store experience is more than their sales receipt. Without today's technology, industry leaders have little insight into the myriad of decisions customers make while navigating a store. Mapping the customer journey reveals how the path a consumer takes through the store impacts purchasing. Armed with this data-rich information, retailers have the power to vastly improve customer satisfaction and store performance.

Foot-traffic patterns, for example, confirm whether shoppers are taking typical routes through the store. These foot-traffic patterns raise a number of questions. Are customers deviating from standard routes or are they searching for impulse items not usually found in the center aisles? Are customers spending more time in specific locations without buying? What if a customer goes through a particular aisle, spends a considerable amount of time there, but leaves without making a purchase?

Answers to these customer journey questions guide operational decisions intended to improve store performance. If traffic patterns prove to have greater consumer interest in certain areas, it's plausible that congestion may be directly impacting sales. Reducing congestion and offering better access to products, especially high-value items, could increase store sales. Further, store teams could create more accurate shopper profiles by looking at what shoppers don't buy, despite spending notable time in specific locations.

Analyzing the customer journey elevates store performance with insights beyond purchasing decisions.

Integrating online with brick and mortar

Last month, we discussed how, even with the steady rise of e-commerce, brick and mortar retail still has an overall stake in our industry. The COVID-19 pandemic forced extended closings, but in a testament to the industry's resiliency, stores optimized their existing online presence to attract shoppers who would typically buy in-store. The data shows consumers are supporting these initiatives; since the beginning of the COVID-19 pandemic, 14% of shoppers tried online shopping for the first time and 56% of established internet shoppers were online more often. Innovative retailers are capturing both market groups by blending online and in-store business plans. Rather than running e-commerce and brick and mortar as separate models, retailers recognized an opportunity to maximize revenue by serving the same customers online and in-store.

Data shows 85% of shoppers choosing Buy Online Pickup in Store frequently make additional in-store purchases. Retailers can capitalize on internet shopping by generating in-store sales when the customer arrives to pick up their order. I am introducing this as BOPIS+, which can potentially integrate two traditionally distinct industry strategies. How can retailers attract more BOPIS+ shoppers to ever-expanding online sales spaces? One option is by triggering POS reminders for popular add-on items. There's a good chance a BOPIS customer forgot to put something in their online cart. An adaptive retailer can turn its BOPIS shopper into a BOPIS+ customer by making it easy to buy forgotten items when they arrive at the store. Depending on how stores choose to track BOPIS+ sales, this metric is a potentially impactful way to improve online and in-store performance.

While the long-standing measurements of retail success are imperative for growth, evaluating store performance for today's omnichannel retailers demands a broader perspective and more specific assessment tools. Technology opens the door to a comprehensive, in-depth analysis by helping retailers capture data previously too difficult to collect.

Studying the customer journey and the symbiotic connection between online and brick and mortar sales channels tells retailers significantly more about what is driving store revenue and performance. Savvy retailers recognize that tracking and optimizing these crucial factors improves the customer experience, which impacts positive earnings.

John Kavulich is VP, IoT Solution Sales, Acuity Brands Lighting, Inc.