KPIs Beyond the Footfall for Successful Brick-and-Mortar Retail
PART 1 - Footfall and Conversion Modules
Nowadays, brick-and-mortar stores and shopping malls alike have numerous ways to benefit from contemporary AI tracking technologies that present endless growth opportunities. These technologies can detect and analyze people’s attributes and behavior in space. Such anonymized data are streamed to the cloud and aggregated to produce comprehensive insights for the client’s management and marketing teams via customizable apps.
Nevertheless, the physical retail industry has yet a lot to learn about what kind of data to capitalize on. Let’s take a look at key metrics we help VIVIDI clients to monitor.
Footfall – a power metric
Data from VIVIDI sensors are delivered in convenient data modules within our customizable app. The first, FOOTFALL MODULE, includes data on the incoming visitors and their demographics such as gender and age. This differentiates VIVIDI AI sensors from the old type of devices, such as infrared beam counters or CCTV cameras. Modern machine learning-enabled intelligent sensors deliver more accurate data and a more comprehensive range of insights.
Footfall, also known under the terminologies such as people counting, and foot traffic, is among the most used analytics not only in the retail industry but the entire physical world. Footfall can be gathered by a variety of technologies, however, accuracy and data delivery depends on the type of technology used. Therefore, it is always important to understand your specific requirements when selecting the vendor.
Footfall not only provides the number of customers entering but also incoming visitors in time to understand peak hours, busiest days of the week, seasonal trends, or store or mall event influence. Moreover, VIVIDI solutions provide historical data and comparisons between localities, as well as trends, and their changes during the time.
Intelligence about visitors’ gender and age help our clients with more personalized services and products that keep customers engaged.
VIVIDI App data print screen from the well-known affordable fashion jewelry retail chain, portraying the typical audience consisting of young females.
Every bounce is a missed conversion
Now, do you ever wonder how many people, pass by your store and how many enter? VIVIDI’s retail or shopping mall clients subscribing to CONVERSION MODULE have these numbers at their fingertips. The module includes data on passersby – potential visitors passing the store (street or hallway), visitors – customers who entered the store including bounced visitors and browsing visitors, and sales – store visitors who made a purchase or had an interaction with the cashier. These data are visualized in a data funnel (see below) enabling them to identify which conversion step is the bottleneck for their business. Alternatively, conversion data can be analyzed via conversion ratios. Concretely, it is the passerby to visitor conversion – the percentage of passersby who enter the store, a visitor to sale conversion, and the bounce rate.
VIVIDI App data print screen of conversion funnel example.
So, who are the bounced visitors, and why this metric is important? Bounce Rate has been a common analytics parameter in the online world but for physical retail, it is fairly new. While e-commerce bounce rate expresses the visitor that landed on a single page on the website and did nothing on the page before leaving. The retail bounce rate is the percentage of shoppers who entered a store, spent less than 10 seconds inside, and left without any action (see the visual explanation in the image below). The 10-second time span is a default value at VIVIDI which can be extended depending on the retail type. Unlike the e-commerce world, shoppers are much more devoted when entering a physical store as it takes more effort than clicking the webpage, consequently, the bounce rate is much lower in physical retail – but still exists. There are many reasons why bounces are happening, including a visibly long line at the cashiers or fitting rooms, or unappealing first impressions at the entryway.
Bounce rate is a great metric for catching various issues that put people off from shopping in your store, but what is even more important is to understand how many and which visitors buy something, which is delivered via the visitor-to-sale conversion rate. This metric shows, how well the store is performing and many of our shopping mall customers utilize this metric to negotiate rents.
In the digital world, the conversion rate is defined by the number of visitors to a website that complete a desired goal, for example, downloading the whitepaper or purchasing an item. In the physical world, it is the conversion of people who come inside and purchase the product, very similar in its nature, but rather different in terms of number. Online conversion rates tend to be lower, around 3% on average. In-store shoppers are more engaged as customers can see products, touch them, try them on, and ask sales associates questions directly to get immediate answers. The brick-and-mortar store conversion rate is estimated between 20% and 40%.
Now that we have described the metrics from the modules that all of our clients subscribe to, we will take a short break before we enter the second part where we will discuss the metrics from HEATMAP, QUEUE, and REAL-TIME MODULES. Meanwhile, we suggest you ask for access to our demo version of the app, to understand the depth of data delivered.
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