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Make your traffic count!

 25 April 2017     Mark Ryski 

As a store operator, there are a million things you need to know, but there’s only a few you must know. Store traffic is one of them.

Every day people visit your store and while some of these visitors will become customers, others will leave without making a purchase. These unconverted visitors represent the missed opportunity in your store, and if you don’t measure your store traffic, you’ll never even know they came or what your store’s true sales potential is. There’s another thing you won’t know without store traffic data: how well you’re actually performing.

Traffic count versus transaction count
Before we get into the benefits of tracking traffic, we need to clear up a misconception many retailers have about traffic counts versus transaction counts. Some retailers believe the number of sales transactions provide a close enough estimate for store traffic. It doesn’t. To say transaction count represents a reliable proxy for store traffic is analogous to saying that ‘hits’ are a reliable proxy for ‘at-bats’ in baseball. Yes, the two stats are related, but they are not proxies — not even close.

Store traffic is a measure of all the people who visit the store, including buyers and non-buyers where transactions obviously only account for the number of buyers. By using sales transaction counts as a proxy for store traffic, you are significantly under-estimating how much traffic your store actually receives. Here’s the point: using transaction counts as a proxy for store traffic will lead to wrong conclusions; wrong conclusions lead to bad decisions; bad decisions lead to poor results.

Counting ‘ups’ manually
Another approach to counting traffic that’s commonly used in the furniture industry is manually counting ‘ups’. This is especially common in stores where traffic is low. While there are some advantages to counting traffic this way, there are also some real disadvantages too.

First, the advantages. Proponents of ‘up counting’ say it’s a more accurate way to track store traffic since counts generated from people shopping together as a family or group don’t get double counted, instead the group is counted as a singular ‘up’. Also, since manually counting ups is done by store personnel, there’s no need to buy an electronic traffic counting device. Both fair points.

However, manually counting ups has a number of disadvantages. At the top of the list is accuracy and consistency. A manual system relies on store personnel to track counts, but this falls apart when the store gets busy and all your associates are serving customers. Also, manual counting raises the question of what defines an up or count. For example, the human counter may deem the store visitor to be a ‘tire-kicker’ and not a legitimate count, and then exclude the count from the total. This may seem harmless enough, but it’s not – it’s actually a form of data manipulation.

Retailers who capture traffic counts manually definitely have the right idea, but an electronic traffic counter will provide a more accurate, consistent measure of your store’s traffic and free-up your sales personnel to focus on serving customers instead of counting ups.

Click here to read the rest of Mark Ryski’s essay Make Your Traffic Count

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This HGO article was written by:
Mark Ryski
Mark Ryski

Mark Ryski is the author of Conversion: The Last Great Retail Metric and When Retail Customers Count. He is also the founder and chief executive officer of the Edmonton-based HeadCount Corporation.

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Home Goods and its accompanying newsletter - HGO This Week - covers the furniture, bedding, appliances, consumer electronics, accessories, lamps and lighting and floor coverings product sectors of the big ticket home goods market in Canada. HGO is also a forum for the dissemination of market research and hard-hitting articles on best practices for Canadian retailers.

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