Philippine Retailing Magazine Q4 2020 (Digital Edition Only) - Page 8

Conversion rate
FEATURE

The 5 most important new KPIs of retail and how to improve them

Whenever we talk to our retail clients about their plans for a new store , or revamp of an existing space , they always hyper focus on these two key performance indicators ( KPIs ).
This makes perfect sense . They are two important measures of how well your retail business is doing after all .
The problem is they ’ re not the most important measures for today ’ s retail world .
They ’ re not even the most crucial for retail stores . To focus only on them is to overlook the fact that things other than the number of people who come into a store impact the sales made . The online and the offline can no longer be separated .
While footfall and sales per square foot still have their place , retail needs a wider set of KPIs that measure how people are actually shopping and discovering and interacting . Without the right KPIs you won ’ t know if you ’ re on track to achieve your business objectives .
Below are 5 of the most important new KPIs you need to be tracking and how to improve them :

Conversion rate

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This one should be a given but it ’ s surprising how often retailers fail to track conversions correctly . Yet , this metric is only becoming more and more important due to the sheer number of ways customers can now discover , engage with and buy from you .
Fundamentally your conversion rate measures how many customers who come into your store or onto your website actually make a purchase .
If you ’ re getting a lot of traffic but a small number of conversions , then it ’ s clear that something is wrong in your approach .
How to improve it :
• Identify key elements that impact conversions such as products being out of stock .
• Identify ways to solve those issues such as placing an online order for an in-store customer or offering store collection for an ecommerce one .
• Build relationships with customers through multiple channels . This is particularly important for getting repeat customers .
• Focus on being helpful rather than ‘ salesy ’. That means no pushy staff members or constant pop-ups .
• Make sure you are providing customers with the information they need to convert .
• Minimise the number of steps it takes to make a purchase .
• If one store location has a higher conversion rate than others look at whether that store is doing anything different that could be rolled out across your portfolio .
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