Does this sound familiar?
You work hard to attract customers to your store. Still, even after they’re in, many browse without buying anything.
If yes, then you’re not alone.
Many retailers struggle with the same problem, and it’s called a low conversion rate.
Conversion rate is one of the most crucial metrics for any retail business.
It helps you understand how well your store is performing and whether or not you’re making enough money to run it.
If your conversion rate is low, only a small percentage of people who visit your store make a purchase.
But there is good news – 92% of US retail sales still happen offline. This means that you can still increase your conversion rate by learning how to convert online shoppers into customers.
In this blog, we’ll dive into everything you need to know about measuring and improving your retail conversion rate and driving more sales and revenue for your business!
Let’s get started!
What is the retail store conversion rate?
Simply put, the conversion rate is the percentage of traffic to a store that results in a purchase. The conversion rate is calculated by dividing the number of purchase people by the total number of website visitors.
Source: RubyGarage
Alt text – Conversion rate formula
For example, if your store can drive 1,000 people to the store and 100 people make a purchase, your conversion rate would be 10%.
The conversion rate is a crucial indicator of your marketing efforts’ effectiveness. It also helps you identify what you can improve.
Now that you know what conversion rate is and how to calculate it, it brings us to another important question.
Why should you measure retail conversion rate?
While the answer to this question might seem obvious, it is important to understand that there are several reasons why you should measure retail conversion rate.
Find areas of improvement:
If you have a baseline of historical data, it’s easy to see where your store has been performing well and where it has yet to. You can use this data to identify any areas of improvement and focus your efforts on those areas.
Adjust staff accordingly:
Knowing when your customers are more likely to visit and buy, you can adjust your staffing schedule to have enough employees available during those peak times. This will help you maximize your staff’s time and resources.
Understanding customer behavior:
Measuring your retail conversion rate can give insight into your customers’ behavior and preferences. For example, if you notice that customers consistently walk out of the door without buying anything. This could indicate that your prices are too high or your product selection is lacking. You can also use this information to identify seasonal trends in customer behavior and adjust accordingly.
Increase sales:
By measuring and improving your retail conversion rate, you can increase your sales and revenue without spending more money on advertising or other marketing efforts. If you can convert more of your existing traffic into paying customers, you’ll see a direct impact on your bottom line.
How do you measure retail conversion rate?
There are a lot of ways to measure your retail conversion rate, but the most common are:
Sales data:
One of the most straightforward ways to measure retail conversion rate is to track the number of sales made in a given period and divide that by the number of visitors to your store or website. This gives you a basic conversion rate, which you can use as a benchmark for improvement.
Foot traffic:
You can use foot traffic data in a physical store to measure your conversion rate. Simply divide the sales by the number of people who entered your store, and you’ll have a conversion rate for that period.
Point Of Sale system:
A more advanced way to measure sales is through the use of a point-of-sale (POS) system. The data from these systems include customer names and purchase history, which can help you identify repeat buyers or find out what products are selling best. You can also use this information to track how many visitors purchased during a specific period and compare it with previous months or years.
What is the average conversion rate for retailers?
When measuring conversion rates for retail businesses, the average rates can vary depending on the type of store and whether it’s a physical location or an online shop.
The average conversion rate for physical retail stores is typically between 20% and 40%. That means out of every 100 customers who walk into the store, around 20 to 40 make a purchase.
However, this number can vary based on factors such as the store’s location, product type, and how the store is designed.
The average conversion rate for online stores is generally lower, typically around 2% to 5%. However, some online stores with highly optimized websites can have much higher conversion rates, reaching as high as 10% or more.
It’s important to remember that your specific conversion rate will depend on your business, so instead of aiming for a particular benchmark, it’s better to focus on improving your own rate over time.
By testing different strategies and analyzing your sales data, you can gradually improve your conversion rate and ultimately increase your revenue.
How do you improve your retail store conversion rate?
You can use many strategies to increase conversions and grow your business. Some of the most effective ways to improve your conversion rate include:
Use a door counter:
A door counter will help you anticipate the number of customers who walk through your doors on a typical day and plan accordingly. This can be invaluable when determining how much merchandise to order or whether you need to hire more staff.
Optimize staff scheduling:
Scheduling your staff is essential in managing customer flow and ensuring that customers are served quickly. You should also consider optimizing staffing levels at different times and on different days of the week. For example, you might find that Mondays are slow while Fridays are busy; keeping this in mind, you can ensure that you have enough staff during peak traffic hours.
Reduce waiting lines:
Reducing waiting lines is one of the most effective ways to improve customer flow. One way to do this is by using a point-of-sale system that allows customers to pay for their purchases at different stations around your store rather than all in one line. You can also use this system for other tasks like returns and exchanges; simply make sure each station has its own cashier so the process goes faster.
Optimize product placement:
You should also ensure that your products are organized to make it easy for customers to find what they’re looking for. This is especially important if you’re selling a wide variety of items, like clothing or accessories; some stores use an “arraying system” in which products are displayed by category so customers can easily browse their options.
You can also use a high-end retail display that will help you maximize the visual appeal of your products.
Train & motivate your staff properly:
When it comes to retail, the customer is king. This means that you have to make sure that your employees are properly trained in how to interact with customers and how to handle any situation that may come up at work. You don’t want someone who isn’t very good with people working at a clothing store or selling accessories; instead, you should focus on hiring naturally friendly and outgoing employees.
Promote your social media properties in store with signage:
When you have a social media presence, ensuring your customers know about it is important. One way to do this is using signage in your store promoting your social media profiles. For example, if you have a brick-and-mortar clothing store, make sure signs promote your Instagram page or Facebook page above each cash register so that people can see them as soon as they enter the store.
Display online reviews in store with signage:
Another way to get more people to visit your store is by displaying online reviews in-store with signage. This will let customers know that others have had a good experience at your business and can help drive new traffic to your location.
Cross-sell and upsell:
One of the best ways to increase sales is by cross-selling and upselling. For example, if a customer comes into your store looking for a pair of shoes, offer them some accessories that go well with the shoes they are interested in. You can also suggest other similar items or related products that could be helpful for their specific needs.
Cross-merchandising:
Cross-merchandising is a powerful way to increase sales. It’s when you arrange your products so that they complement each other.
For example, if you have shoes that go well with another item in your store, place them next to each other. This will help customers see the new options and could lead them to purchase both items.
Improve your store aesthetics:
Aesthetics is a significant part of retail. You want your store to look nice, which means investing in good furniture, fixtures, and decorations. It can also help hire an interior designer to advise you on making your store more appealing.
Use window displays:
Windows are a great way to showcase your products. Using a variety of displays in your windows can help customers see what you offer and entice them into the store. If you don’t have any display space nearby, consider putting up posters advertising your sale.
Use price matching:
One of the best ways to get people into your store is by offering price matching. If someone finds an item cheaper elsewhere, you’ll match that price and sell it for them. This can be a great way to get customers in the door, but it’s also essential to make sure that what they’re buying is exactly like what they saw elsewhere (color, size, etc.)
Place checkout at the back of the store:
Placing the checkout counter at the back of your store will encourage customers to walk through all of your merchandise before they pay, which can be an excellent way to find new things they love and purchase more than one thing during their visit.
Use flexible payment options:
The best way to get customers to buy more during their visit is by offering flexible payment options. You can allow them to pay with cash, credit cards, or even debit cards. If you don’t offer these types of payment options, then it may be difficult for some customers to make a purchase on their first visit.
Use in-store-only offers or rewards:
Giving customers in-store-only offers or rewards can be a great way to get them to spend more money while they’re in your store. This could mean offering discounts that only apply to purchases made at the store or offering a special reward for each purchase made during a certain period.
Host in-store events or product demonstrations:
Hosting in-store events can get more customers through your doors. This could mean hosting a cooking demonstration, product demonstration, or other types of event that will help educate your customers about how to use the products they buy from you. Another option is to host game nights and trivia nights where customers can win prizes for participating.
Conclusion
The key to getting more customers into your store is making them want to stay.
The longer your customers stay in the store, the more money they will spend. So make sure you have plenty of things for your customers to do while they wait for their orders to be completed.
One way to keep your customers engaged is to let them explore different items in your store and educate them about using them.
You can easily do this with a high-end retail display. The display can be used to show off your products in a way that customers can understand and appreciate. This will help them feel more confident about buying from you, which will increase sales and customer loyalty.
So, order your custom retail display today and improve your store conversion rate.
