Tech Guest Viewpoint: Getting Smart About Department Store Traffic
Industry estimates show in-store conversion rates (percentage of visitors who take the desired action to purchase) are below 30% and dropping. This means 70% of store visitors leave without buying. Never before has there been greater competition for sales and a smarter, more connected consumer base.
Today’s department stores, often regarded simply as a pathway into the mall rather than a destination site, are faced with stiff competition from fast-fashion retailers and are challenged more than ever to capture the wallets and loyalty of mall shoppers. To enhance, engage and boost customer loyalty and drive true conversion, progressive retailers are quickly realizing the value of gathering critical traffic data to drive changes across the retail environment, enhance the customer experience and ultimately increase profitability.
Unlike box stores nestled within the mall, large department stores anchoring the mall feature multiple entrances, some of which face the parking lot while others lead into the mall itself. As a result, gathering and analyzing key data like intra-flow traffic compared to traffic departing into the mall are of significant importance.
In addition, gathering insights around directionality at elevators and escalators, which departments garner the most and the least traffic, where shoppers are converting, and store dark spots, can fuel meaningful changes across the retail ecosystem. This information becomes even more meaningful when combined with other key data sources including security, workforce management, and inventory intelligence.
For example, armed with insight into hot spots and peak traffic areas, retailers can integrate this insight with their workforce management solution to better align staffing to those hot areas and thereby increase conversion.
One key area for traffic intelligence to make an impact is within the fitting room. Often undervalued as a revenue generator, retailers now have the opportunity to transform the fitting room into a profit center for customer engagement. It is here that the three key elements – customer, inventory and associates – come together at the point of buying. If a department store can affect the decision between consumer and inventory, supported by superior customer service, retailers will convert shoppers and increase profitability.
Integrated traffic and inventory data provides a clear picture of what is happening inside the fitting room itself - what inventory goes in, how long the shopper stays, what inventory is bought, and how to enhance the experience through personalized customer service. As a result, department stores are empowered to better staff fitting rooms to ensure a positive customer experience thereby increasing the likelihood of conversion, and also minimize potential loss.
Furthermore, by comparing traffic, sales and average conversion metrics, retailers can see the true “big picture.” For example, if department stores drive traffic through the same promotional tactics but then measure those patterns (and presumably the increase) and align floor sales staff to provide better customer service, answer customer buying questions, etc., this will ultimately drive higher conversion and sales.
While many department stores today may collect traffic data, most do not know how to leverage this information to make true changes across the store environment. As a result, these retailers are missing out on the opportunity to not only gain market share but also to improve brand perception and increase customer loyalty.
As more and more specialty and fast fashion retailers entice shoppers to their stores with warm personal service and inviting store environments, department stores are challenged to compete. By more strategically harnessing the power of traffic intelligence to better serve customers, department stores can re-establish themselves as a “destination” site at the mall, rather than a simple pathway to competitors.