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    February-2013  


With Store Traffic Down, Small-Business Leaders Need to Sell More Efficiently

This recessionary era has seen many ups and downs for small businesses.

One area particularly vulnerable has been store traffic or.more precisely, lack of store traffic.

Coupled with the rise of online shopping, store traffic is often cited as the reason retail-sales results are sagging.

Every retailer has faced declining store traffic at some point during the past four years.

While they often feel as if they are alone, they’re not.

Mark Ryski, founder of HeadCount Corp., says store traffic wanes for many reasons, including poor general economic conditions, aggressive competitive activity, changing consumer preferences and even the weather.

Whatever the reason, if traffic is down, Ryski says, it’s a bad sign. It means the store has fewer in-store selling opportunities, and management needs to take action to drive prospects back into the store.

Unfortunately, it could take time (and likely money) to understand the traffic trouble and find a remedy to restore it. 

Ryski suggests focusing a business’s efforts on driving higher in-store conversion rates can help make the most of a difficult traffic situation, but first, small-business leaders need to make sure a traffic problem actually exists.

Is traffic really down, or are transactions down?

Many retailers still use sales-transaction counts as a proxy for store traffic, and while these two metrics are related, they are not at all the same.

Store traffic is a measure of all the people who visit the store, including buyers and non-buyers while transaction count represents only buyers.

While transaction counts may be down, traffic may actually be up! The decrease in transaction count could simply be a result of the store’s failure to convert the traffic into transactions – people visit the store, don’t get served, or don’t want to wait at checkout and simply leave without purchasing. In this case, the store has a conversion problem not a traffic problem.

So, if there is no counting of actual traffic-count data for the store,  management needs to get data. Relying on just transaction counts will not do.

Should traffic surveys find traffic is actually down, Ryski suggests focusing on converting as much of this traffic — diminished as it may be — as possible. Ironically, less traffic can actually be an advantage for some retailers.

Less traffic, more sales?

Store traffic and conversion rates tend to be inversely related, so when traffic goes down, it’s not uncommon to see conversion rates go up. It makes sense if one thinks about it. When the store is busy, it’s sometimes hard for associates to deliver a great service experience, conversion rates fall. But when the store is less busy, associates have more time to luxuriate customers with service and should be able to convert more visitors into buyers.

When traffic sags, don’t despair, rally sales associates around the “conversion cause” and turn a traffic challenge into a conversion opportunity.

What to do?

Other experts suggest taking a hard look at what sales associates are doing.  Look at the staffers who are ringing up the most sales.  Identify the “closing arguments” that seal the transaction.  Reward sales personnel who generate the most revenue.  Surface staff-morale issues and look at the day-to-day managers.

Solicit comments from customers and offer incentives for them to tell you why they bought or left without buying.

Talk with other merchants and ask for their input. Their answers may be surprising.

Above all, don’t panic.

Ryski is author of Conversion: The Last Great Retail Metric and When Retail Customers Count. For more information, please visit www.headcount.com.

 


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