The “Why” Behind the In-Store Buy
Stores have once again become an important marketing vehicle and remain the best way to immerse shoppers in your brand vision. However, the number of shoppers visiting stores is still recovering, and it could be a while until it reaches anywhere near pre-pandemic levels. In addition, brands are making tough decisions about their stores, from the right number to location to experience vs. assortment mix. In order to thrive during this period, more than ever the amount of intelligence we have about what goes on in stores needs to evolve beyond what sold, what was featured etc. and really understand “why.”
In this new blog series, I will cover a series of best practices and new KPI’s brands should be incorporating into their everyday processes to ensure they are going into this post-COVID world with eyes (and store doors) wide open. This first edition will cover two fundamental topics even more important after the past year: staffing the right number of people in the right place, and measuring product/fixture productivity.
Do you have the right number of staff and are they in the right place?
Traffic to stores throughout the day had resembled a plateau in most cases because consumers didn’t really have a lunch break or evening commute during which to stop by stores, and many stores had reduced hours. We are starting to see the return of peak hours, which means there are times when more staff should be in the store and on the floor. This time I hope to see brands get it right, and not send staff on break or reduce labor hours all together in the late afternoon, just before the evening rush. I would also expect brands to resource Sundays correctly, which may have less total traffic than Saturday due to reduced hours but have as much traffic per hour.
In addition, stores larger than a shoebox should understand where shoppers are spending their time inside and be able to compare that to where staff are spending their time. Using the dwell time each customer and staff spent in each area of the store throughout their visit/ day, calculate what % of the total time was spent and compare them to each other. If staff are spending 70% of their time behind the register and shoppers spend 5%, there is a lot of time when shoppers are wandering the store unassisted.
Validate product and fixture productivity
All brands know what is selling in each store (right?) and some may be able to calculate sales per square foot or linear foot, but understanding why something isn’t selling once ruling out stock is unfortunately often left to speculation. Is it because shoppers completely missed the fixture the product was on, or did shoppers flock to the product but ultimately not purchase? Both of these reasons could result in exactly the same sell-through number, but would dictate a completely different go-forward strategy. We like to examine productivity within the store using a productivity funnel. A productivity funnel allows you to compare products and areas within a store and across stores.
For at least a relevant sample of stores, start by mapping out which products are where in your stores, and the dimensions the various fixtures make up. If your store has RetailNext’s Full Path Analysis (FPA) technology enabled, your sensors can triangulate the size of your zones, otherwise planograms are a good reference. Every product you place in each area of your store represents an opportunity cost of something else you could not put there. It’s important to understand how much each area of the store is being visited, shopped, and ultimately purchased from.
Compare the % of real estate each product or category has to the % of traffic that visits the area, or areas holding a particular product/category. This represents whether shoppers can find the product and if it’s in a good spot.
Compare that % of traffic to the % of dwells, or shoppers engaging with the product. This teases out the difference between “few shoppers finding the area but when they do, they engage,” and “the product in a highly trafficked area but no one stops.”
Compare the % of dwells to the % of units sold (or sales or transactions depending on what makes the most sense, we find units is generally the most democratic measurement). This represents the product’s ability to convert shoppers engaging with the product into sales.
You can also divide those rates by each other to get a productivity index which is useful as a product with a ratio of % of units to % of dwells of 2, is twice as productive as a product with an index of 1.
Using productivity funnels helps brands understand where in the journey a challenge is occurring and make it easier to decide next steps.
Optimizing when and where you allocate your staff, knowing that you are investing in products that are delighting consumers and being able to react quickly if not is more important than ever. Using the above methodologies is a good first step to set up your stores to win, both for your consumers and your business. Stay tuned for the next edition!
About the author:
Lauren Bitar, Insights Manager, RetailNext