Canadian Retailer - March/April 2009 - (Page 50)

C LO S I NG T I M E: YOU A S K E D U S Every day, Retail Council of Canada’s Customer Service team receives phone calls and e-mails from members across the country with questions about every aspect of the retail industry. If you’re not sure where to turn when you need answers about government legislation, privacy issues or anything else affecting your business — contact us! It’s just one more way Retail Council of Canada works hard to be your Voice of Retail. How your store measures up “I’m an independent retailer who’s been in business for a couple of years, and I think I’ve got a handle on how to buy the right product and hire the right people. But I keep hearing words like ‘traffic’ and ‘conversion’ and why measuring them is important to smaller retailers. Can you explain why?” At its simplest, traffic refers to all the people who come into your store or visit your Web site. Your conversion rate is the number you get when you divide the number of people who come into your store by the number of customers who end up buying something. For instance, if 100 people enter your store on a given day and 50 of them are paying customers, then you have a 50% conversion rate. (Obviously, the goal is to reach as high a conversion rate as possible; destination retailers, such as supermarkets or gas stations, are more likely to have higher conversion rates because they sell necessities and are part of a consumer’s weekly shopping cycle.) Even if you are not a large retail operation, measuring traffic and conversion is important for planning purposes for a number of reasons: • First, having an idea of how many people come through your doors is a basic benchmark for determining the effectiveness of your advertising and promotional campaigns. If traffic shoots up the day after you announce a new sale, then you can be confident your message is reaching your customers. But if you see no uptick in traffic, it may be time to reconsider your marketing strategy. • Measuring traffic also helps you determine which outside factors, such as weather or road repairs, have an impact on your sales over a given period of time, and what you should do in response. • Traffic analysis can help you optimize your workforce by figuring out which parts of the day, week, or month you are more likely to see a greater number of customers visit your store. Once you’ve done that, you can then ensure you have just the right number of staff on hand customers when need them most… and when they don’t. • You can also use traffic and conversion data to decide if your store’s operating hours are in sync with shopping behaviour. If you find very few customers drop by in the first hour of operation or later in the evening, then you can use the data to determine the pros and cons of changing your hours. • Finally, if you have multiple locations, traffic and conversion analysis can help you size up each location to determine which one is the best performer and why. For example, if one of your locations has low traffic but very high conversion rates, it can help you figure out if that address is the right location for your store, or if there is something special the staff at that store is doing that you can export to the other locations. Traffic and conversion are not the only ways in which retailers of all sizes measure performance. Aside from the more obvious benchmarks of sales and margins, retailers often measure average ticket sales, which refers to the amount of money paid for each individual item; average basket sales, referring to the number of items a customer walked out of the store with; and AUR (or average unit retail), which refers to the average price per unit sold in a given period of time. It may sound complicated at first, but arming yourself with the knowledge that these measurement methods can provide will in the end give you a much better sense of what’s working and what isn’t — and once you know where the weaknesses in your operation may lie, you can get to work on fixing them that much faster. You’ve got questions about retail? We’ve got answers. Call our Customer Service Team at (888) 373-8245 or e-mail customerservice@retailcouncil.org. Learn more When Retail Customers Count, by Mark Ryski of HeadCount Corp. (and don’t forget that RCC members receive an exclusive discount with HeadCount on monitoring equipment, data analysis and management reports; visit www.retailcouncil. org/membership/benefits/ headcount.asp for details.) 5 0 | C A N A D I A N R E TA I L E R | M A R C H /A P R I L 2 0 0 9 | www.retailcouncil.org/cdnretailer http://www.retailcouncil.org/membership/benefits/headcount.asp http://www.retailcouncil.org/membership/benefits/headcount.asp http://www.retailcouncil.org/membership/benefits/headcount.asp http://www.retailcouncil.org/membership/benefits/headcount.asp http://www.retailcouncil.org/cdnretailer

Table of Contents for the Digital Edition of Canadian Retailer - March/April 2009

Canadian Retailer - March/April 2009
Contents
Publishers Desk
Shop Talk
Store Design - And Now For Something a Little Different
RCC Member Issues - A Delicate Balance
Cover Story: The Green Team
Business & Finance - Staying Afloat
Special Human Resources Supplement
Retail Neighbourhood Spotlight
Focus on Accessibility & Diversity
Advertisers’ Index
You Asked Us

Canadian Retailer - March/April 2009

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