Every retailer should adopt new KPIs or risk losing sales

Adrian James

New retail KPIs to prevent losing sales

Within the past nine months, I’ve met more than fifty Regional Managers for chain stores. I always ask the same question: What are the top factors causing variance in the performance of the stores in your patch? The explanations differ a lot.

Most point to location as being the biggest issue, citing the composition of stores around their outlet, poor foot traffic, or the prosperity of their region. The second reason for variance is typically the aesthetics and format of the store, including signage, stock carried, window displays, opening times, layout, etc. The final category discussed are the staff themselves, the staff training or even a poor store manager. Taking all this on board, for determining the reasons why some stores perform and others don’t, it is obvious that there are a large number of variables at hand.

Breaking myths in measuring store performance

It is not possible to quantify or qualify every variable retailers see across their store estates to determine the effect on conversion but there are a great many we should consider. Take store location as an example. Measuring the conversion from passersby to store visit using Wi-Fi analytics is very straightforward. We look for the number of smartphones that pass the windows within a few meters and see how many of them come inside. This allows us to compare effectiveness of window displays, traffic volumes outside the unit or even the presence of staff in making the premises more inviting.

Building a set of KPIs to measure how a store is performing facilitates benchmarking across stores in your chain -- something which is old hat to digital marketers. Setting KPIs is a board level discussion based on data from EPOS, footfall, primary research and Wi-Fi Analytics. The primary KPI will always be revenue but the addition of conversion and other metrics gives a better picture, including conversion of fitting room to till visit, repeat visitors, footfall to promotion, and the average dwell time in store to conversion.

It’s time for brick-and-mortar to regain vitality

Some of these metrics are applicable to all retailers, some are not. But once a retailer settles on a set of metrics for their business, it takes the ‘gut’ out of decisions and gives senior management insight into store performance in a uniform way. Lets take an example. An electronics retailer has the usual sections, home appliances, audio, laptops, tablets, vision, etc. We know the dwell time is different per category and from the EPOS data we can work out the average time spent before conversion per category. If we know that Store X, Y and Z have an average dwell time of 7 minutes per conversion to till in white goods, then we can benchmark it against Store A which has an average dwell time of 12 mins per conversion. Why is it that Store A has a higher dwell time for conversions, do people convert to higher values against this dwell time? Or if they don’t have higher dwell times, what is it in the store that is causing people to leave quickly and not convert? 

Changing some of the identified variables from the other stores (path, staffing hours, etc) may produce better results in this store and get the conversion rate up. But the company must buy into this way of working. To some it is arbitrary, to others logical, but this type of measurement must start from somewhere. 

Physical retailing is suffering right now but simple changes can move the dial and build customer experiences that convert. Now is the time for change in retailing and building metrics for measurement is the first step.

Black Friday Revisited: was 2015 any better than 2014

Take a fresh, data-driven perspective to omichannel retail conversion by joining our discussion on LinkedIn: A New Take on Omnichannel Conversion

WALKBASE BRIEFLY

Walkbase provides a retail analytics solution for improving the impact of marketing on physical stores and personalising in-store shopping experience.

BOOK A MEETING

NEWSLETTER SIGNUP

FOLLOW US