Conversion rate analytics to Retailer's rescue

by Deepak Sharma on Sunday, March 23, 2008

Retail Store Ops blog has a post on how retailers are adopting sophisticated traffic counting systems and developing conversion rate analytics to track how many shoppers are actually making purchases.

Given the economic slowdown and increased pressures to show top and bottom line growth, missing out on capturing customers while they are in a store is becoming an opportunity retailers can no longer afford to miss. Major retailers such as Virgin Megastores, Marks & Spencer, and Crabtree & Evelyn have served as a few of the early case studies for the benefits of measuring and improving conversion rates.

There are some interesting numbers thrown in the blog post. For example,

Virgin has credited the analysis with uncovering variations of up to 20% in average transaction values between stores, as well as a 15 point difference in conversion rates between its highest and lowest performing stores.


Once retailers start collecting the performance analysis from individual stores, they are often surprised by the results. “If you were to ask a retailer how many shoppers they convert, the assumption is typically north of 50%,” said David Smyth, Vice President of sales operations for Experian FootFall. “In reality, the average conversion rate ranges between 20% and 40% for most retailers. Using that average, that means about 70% of shoppers are leaving the store without buying anything. That means retailers are leaving an awful lot of money on the table.”

So you can understand the importance of Conversion Rate Analytics. Even a 1% improvement could potentially mean millions of dollars. But conversion rate analysis is more difficult then what it is for Online stores. Many retailers measure the sales and try to deduct the store performance on the same. Factors like store traffic are ignored in these cases.


Yeah You are right, in India itself the conversion rate is below 40 % in most of the stores. The reason behind that is Store Design, Assortment variety and skilled salespeople. Besides that the mindset of the Indian shoppers they visit most of the time for just entertainment & window shopping. They still think malls & stores are for high prices.

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