Counting Heads

There are a myriad of reasons to count customer heads in retail real estate, not the least of which is to increase sales. And in the downturn, many retailers are finding it easier to make the most of the traffic they’re getting rather than try to bump up the customer numbers.

For Montreal-based Liz Claiborne Canada Inc., a division of New York City-based Liz Claiborne Inc., compiling traffic data in its physical stores was driven by three objectives: scheduling staff, driving sales and measuring the effectiveness of marketing programs.

In about 2002, after Liz Claiborne Inc. acquired Canadian apparel retailer Mexx Canada and rebranded the stores under the Liz Claiborne banner, the company expanded an existing vendor partnership with Montreal-based St. Michael Strategies to implement a variety of SMS sensor technologies designed to collect and analyze traffic data.

The system, comprised of three types of sensors, counts customers as they enter and exit a Liz Claiborne Canada store.

“The system physically counts the traffic entering and exiting our stores with thermal imaging cameras and infrared beams,” said Eric Champagne, VP information systems, information technology and logistics at Liz Claiborne Canada.

The three-pronged technology includes infrared side-mounted beams placed at store entrances, which are then augmented by overhead infrared “curtain-style” sensors when side-mounted beams can’t be structurally installed due to door frame construction issues. For high-traffic, wide-entrance stores, overhead thermal imaging cameras fill the bill.

All of these sensors “talk back” to a common data collector located at each store, which then sends collected data back to Liz Claiborne’s IT location every hour. That data is analyzed and reported on using SMS’s Web-based TM S Enterprise software product, and reports are returned to the stores, again on an hourly basis. Traffic-related metrics collected include traffic total or per entrance, conversion rate, customers per staff hour and performance on traffic.

“Once the traffic counts are combined with the total number of sales and the average sale amount, we use the information to identify trends that drive sales,” explained Champagne. “We don’t use the system as an excuse to justify days with low sales; we use it to strategically sell more.”

According to Champagne, Liz Claiborne corporately monitors conversion rates and key performance indicators (KPIs) for all stores and regions every hour, and store managers can call the corporate offices for assistance in identifying trends and making better decisions.

“Corporate employees have exposure to data trends and scheduling situations from all of our stores,” said Champagne. “Furthermore, Liz uses KPIs to justify its store budgets, so with this timely information, managers are more likely to achieve their goals because they lower the number of scheduled employees and increase sales.”

Initially, said Champagne, stores were averaging an 8% conversion rate using Liz’ traffic-counting approach. It now achieves an 18% conversion rate.

Liz Claiborne operates about 150 stores in Canada, and the original implementation of the SMS traffic-counting technology was completed in a single year. “We now add new stores as they open,” said Champagne.