Even though most final purchases are still completed in-store, shoppers are spending more time online prior to arriving at the POS.
Two specific phenomena are affecting the buying journey today, explained Russell Evans, VP of Marketing at ShopperTrak, in a recent Connected Consumer Series webinar, titled: Tapping Into The Benefits Of Next-Generation Store Analytics:
- Showrooming: When shoppers conduct online research while standing in the store, then complete those purchases online.
- Webrooming: When shoppers spend time researching products online before going to the store.
- Perimeter Analytics = More shoppers;
- Interior Analytics = More buyers; and
- Performance Analytics = More revenue.
To tackle these challenges head-on, retailers need to better understand shoppers and their behaviors. The foundation of that knowledge is built on three pillars: Traffic, conversion and transaction size, Evans noted. Once retailers have a handle on the data related to those three pillars, then advanced analytics can take over.
“Even a small increase in one of the pillars can have a significant impact on the bottom line,” Evans explained. For example, by analyzing the amount of traffic in the store versus sales, a retailer can uncover areas where the store or store associates were underperforming. Effective adjustments can then be made.
Evans shared an example from Godiva to illustrate this concept. In a test scenario, Godiva found that one type of window display drew significantly more customers into the store versus another. By making that adjustment, the chocolatier was able to increase footfall in the store.
Once the shoppers are in the store, the next challenge is increasing conversion. Using advanced analytics, merchants can analyze four key conversion factors: Abandonment, dwell time, shopper-to-associate ratio and queue management.
Evans explained that by improving conversion by just two points, a retailer could see a 9.8% increase in sales.
Finally, retailers should be focused on boosting transaction size. Here, the influencers are: Intercept rate, intercept time, zone counts and loyalty. The bottom line, according to Evans, is: “Enhancing the shopping experience leads to larger purchase sizes.” By improving one or more of these influencers, retailers will be able to increase overall transaction size.
3 Types Of Next-Generation Analytics
Evans described three different types of advanced analytics and how they can boost store performance. In a nutshell: