Customer traffic Vs.

Customer conversion
INCREASE CONVERSIONS - ENHANCE SALES

Contents
1. Customer traffic 2. Customer conversion rate 3. Bottlenecks to conversion 4. Improving conversion rates 5. Conversion strategies - Collateral or link sell - Selling accessory - Up-selling - Cross selling 6. Incremental sales performance equations 7. Best practice moving on 5 Ps to 6 Ps, futuristic approach

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Customer traffic
Customer traffic Transaction counts Customer traffic- the total number of people came to the store (buyers and non-buyers) Transaction count- the number of people who made a purchase

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Conversion rate- most critical retail performance metrics

Ex- A store logged 500 traffic count and 200 sales transactions, conversion rate = 40% (i.e. 200/500*100)

Bottlenecks to conversion
Sales staff effectiveness Staff levels Visual Merchandising POS availability Cashiers effectiveness Promotional strategy Product mix, availability and price Buying group size Competitive environmentCopyright 2013 JDA Software Group, Inc. - CONFIDENTIAL

Improving conversion rates

1. Understand why people dont buy
- long queue at the tills, fitting rooms - inexperienced sales staff & cashiers ineffectiveness

- appearance & grooming, product knowledge, professionalism, compensation plan - out-of-stocks

- impact-less visual merchandising and the list goes on.

2. Align staff to traffic not to transactions

- Matching staff schedules Vs. traffic volume timing in store - Pay particular attention to lunchtime Dynamic roster - unplanned staff breaks seriously drags down conversion rates

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Improving conversion rates

3. Look for conversion leaks - plug the holes
- high traffic low conversion rate - low traffic high conversion rate - take control of peak trading hours by day and by week

4. Set conversion targets by Dept.

- define goals & targets for each dept. - every store is unique - set conversion targets uniquely - 1 store profitable at 15% conversion rate another may be underperforming at 30% conversion rate - trick is to move conversion rate above stores performance
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Improving conversion rates

5. Make conversion a team sport - best way to improve conversion is to ensure all staff
understands what conversion is and that each of them helps influence it - collective team effort: Sales staff Cashiers Vendor staff Visual Merchandisers Other in-store staff - dont think of conversion as merely a business metric - measure how well the whole store is doing at helping people buy - discuss targets and share results - get staff excited about moving the conversion needle and it will significantly improve results

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Customer conversion strategies

1. More buying customers
- customer visit a store and many even consider buying - increase conversion by breaking down the barriers to making a purchase

2. Sales from other business units

- influence customers to visit and buy from your other departments or brands during their visit

3. Secondary shoppers
- influence those who accompany your primary shoppers

4. Circle of influence
- influence customers to invite their circle of friends to your brand

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Customer conversion strategies

Collateral or Link Sell
Focus on selling co-ordinates
- ensure staff and customer is made aware of the range and brands in the store - having reasonable width in product line empowers to sell co-ordinates inducing further buying - Ex, footfall in 1 store is 300 customers/month and if a salesman can induce 25% of these customers to buy 1 more additional product, this generates an extra sale of 75 pieces

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Customer conversion strategies

Sell at least 1 accessory per bill
Accessories
- accessories are presently the least focused-on by many of Retailers/Stores. - have clear focus and target on accessories e.g. caps, belts, handkerchiefs, socks, ties, flip-flops, etc. - if sales staff do suggest any accessories to customer .i.e. handkerchiefs, caps, belts, undergarments etc. the customer many a time, will not resist. - it is a Win - Win situation for both sides.
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the

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Customer conversion strategies

Up Selling
Up selling: Sell higher-price-point products
- customers are price-sensitive, stock aspirational products are at higher-price-point that

- the trick of the trade is to create such zone for the customer whereby they feel comfortable with the presence of products at both ends of the price spectrum - a salesman should be able to highlight all the F.A.B elements to customer in pleasing, honest and convincing manner - most customers will graduate to aspirational products if they believe that the decision was entirely theirs
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Customer conversion strategies

Cross Selling
Cross Selling
- guiding & helping customers on availability of other brands & merchandises with in the branch and other branches as well, to suit their needs - in case of out of stock check availability with stores and direct the customer, if feasible initiate store to store transfer - suggest co ordinates from other brands to suit customer needs

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Incremental sales performance equation

The following equation identifies the three key variable that generates sales result: Retailers should know how and which lever to press

In order to generate 50,000 sales store has to convert 50% of 1,000 people who visited the store and has an average sales value 100

50,000 = 1,000 X 50% X

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100
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Incremental sales performance equation

If the retailer wants to drive sales up to 75,000, there are number of different ways this can be achieved:

1. Increase traffic volume

Drive the traffic volume up by 50% to 1,500 (through advert or promo) and maintain 50% conversion rate and 100 average sales then ..

75,000 = 1,500 X 50% X 100

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Incremental sales performance equation

2. Increase conversion rate

Drive the conversion rate up to 75% (through sales training, staff availability, approach and clear strategies) even if traffic and average sales remains constant..

75,000 = 1,000 X 75% X

100

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Incremental sales performance equation

3. Increase average sales

Increase the average sales from 100 to 150 (through offering new higher-end product line, increase add-on sales, link sell) even if traffic and conversion remains constant..

75,000 = 1,000 X 50% X

150

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Incremental sales performance equation

4. More than one variable: If the retailer can positively impact more than one variable the result is a multiple effect dramatic impact on sales

Increase the conversion rate an additional 10% (.i.e. from 50% to 60% and drive the 500 incremental traffic (.i.e. from 1,000 to 500) holding the average sales at 100 then

90,000 = 1,500 X 60% X 100

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Best practices
Customer count & conversion
The 5 Ps of Retail business: -People: Do you have right people? -Place: Right store locations and products placement? -Product: Do you have the right products to sell? -Price: Is the product rightly (competition) priced? -Promotion: Do you have right promotion strategy?
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Best practices
Futuristic approach- John Lewis
The 6th P is Pixel (Technology)
Companys background - John Lewis is U.K one of the largest retailer - opened 1st store on Londons Oxford Street in 1864 - presently runs 37 stores (29 Dept. store, 8 smaller format ) - annual turnover US $ 5.2 billion - J.Ls strategy: lead U.K market in omni-channel retail - on-going sales growth is highly dependent on combined inshop and on-line experience by keeping customers engaged

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Best practices
Futuristic approach- John Lewis
- Challenges Make the online and in-shop environments synonymous to capture more cross-channel shoppers - Solutions Pilot-test a virtual fashion mirror, Cisco StyleMe, to differentiate the instore experience, create cross-channel shopping behaviors and demonstrate John Lewis' passion for innovation - Results 1,402 customers used StyleMe - an average of more than 40 customers daily Customers of all ages enjoyed the experience, with 67 percent giving it a positive assessment
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Cisco S tyleMe Virtual Fashion Mirror.flv

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June 2012 J.L tried and installed CISCO StyleMe

Thank You for your time!

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