As marketers we are often faced with a mountain of potential metrics and data points to focus on and it can be daunting deciding where to invest our time and energy. After nearly two decades of working in the retail industry, here’s our rundown on the essential metrics you should be tracking to measure the success of your retail campaigns.
Sales Performance Metrics
In-Store Conversion Rate
Conversion rate in retail is the percentage of purchases made by visitors. It’s calculated by dividing the total number of sales by the total visitors and multiplying by 100 to give you a percentage.
In-store conversion rates are a foundational metric that each store should be tracking. Without understanding the conversion rate of each store it is difficult to make informed strategic decisions in any retail campaign.
When you understand your baseline conversion rate you will be able to successfully measure the performance of in-store campaigns by looking at the changes to conversion rate. A higher conversion rate during a retail campaign indicates that the campaign is effectively engaging your customers.
There are many things that can influence your conversion rate. Look at how changes in signage, product placement, branding and POS impacts your conversion rate to better optimise your store’s performance.
Average Transaction Value (ATV)
Average Transaction Value is another essential metric to monitor alongside your conversion rate. It is the average amount spent by customers per transaction. You can choose any period of time to measure ATV but ideally it should be the same period you measure your in-store conversion rate as the two metrics are linked.
Retail design and in-store campaigns play a significant role in influencing customers’ purchasing decisions and successful campaigns will promote a higher average transaction value for the duration of the campaign.
To analyse and optimise ATV through design, consider monitoring customer behaviour and buying patterns within your stores. Are there specific product categories or areas that consistently generate higher-value transactions? By understanding the link between design elements and buying patterns you can strategically place high-value products or create enticing product displays to drive increased transaction values.
Sales per Square Foot
Sales per square foot is considered a critical metric all retail marketers are recommended to understand. It shows the efficiency and profitability of retail spaces and indicates how effectively it is being used to generate sales.
To work out your sales per square foot begin by mapping your retail space and where your products sit. Use your in-store conversion rate and average transaction value metrics to determine which areas of your retail space are driving a high volume of sales and which areas aren’t.
Once you’ve identified areas of your space that are underperforming you can make changes to those areas to promote buying behaviour, such as enhancing product placements, changing the types of products in those areas or launching an in-store retail campaign to drive more footfall to under-served areas. You may also decide to alter your entire retail space to improve customer flow.
Return on Investment (ROI)
Return on Investment is often overlooked by busy marketers but it’s the clearest indicator of success or failure in retail campaigns. By measuring the profitability of your campaigns individually you can begin to see what types of campaigns are having the impact you want on your customers and which are missing the mark.
When calculating your ROI it’s important to remember all costs associated with your campaign including time & labour, external supplier costs, and any investments you have made in technology or collateral that supports the campaign. If you are accurately tracking the other metrics in this guide you will be able to see the uplift generated by your campaigns which you can use to calculate your overall ROI.
Customer Engagement Metrics
Footfall
Footfall is the number of visitors inside your store and is an important metric for understanding the overall attractiveness of your retail space and allows you to assess the impact of your retail campaigns.
Footfall can be influenced in a number of different ways and not all of them are within a retailer’s control (such as the weather). IPOS specialises in creative campaigns to increase retail footfall, using in-store designs and online brand campaigns. Targeted campaigns linked to product launches of store promotions can have a big impact on increasing footfall, especially with a unified campaign that starts in the retail window and extends in-store.
Tracking footfall requires an investment in technology like footfall counters or video analytics. Alternatively many retailers partner with specialist companies that record and analyse footfall patterns.
Dwell Time
Dwell time is the amount of time customers spend inside your store and is a good metric to monitor as it will show how effectively your retail space is capturing and holding attention. Longer dwell times generally indicate that your retail space is engaging customers’ interest which increases the chances they will make a purchase.
Creating an inviting and comfortable environment for customers can enhance dwell time. Consider factors like cleanliness, noise, lighting, store layout, product arrangement, and interactive elements. Integrating interactive elements within your retail space can significantly enhance dwell time. These elements can range from digital displays and touchscreens to immersive experiences or hands-on product demonstrations. Interactive features not only engage customers but also provide opportunities for them to interact with your brand and products on a deeper level. This experiential approach fosters a sense of connection and discovery, prolonging the time customers spend in your store and can lead to greater brand affinity.
Customer Experience Metrics
Customer Satisfaction (CSAT)
Satisfied customers are more likely to become loyal brand advocates and share their positive experiences with others which makes CSAT a vital metric to evaluate. Measuring customer satisfaction allows you to make informed decisions to improve or build upon your retail strategy.
Measuring customer satisfaction can be done through in-store surveys, digital POS feedback stations or online. Many retailers will collect an email address to provide digital receipts and include a survey to gather feedback.
Net Promoter Score (NPS)
The net promoter score looks at how likely someone is to recommend a brand or experience which makes it a powerful metric to track. High net promoters are generally loyal customers and potentially brand advocates that will recommend you to others. Retail design and the in-store experience can have a big impact on turning customers into high net promoters which is why ‘experiential’ design has become such a key feature in retail campaigns.
Measuring NPS is usually measured at the same time as CSAT so uses the same methods to capture data. By analysing the CSAT and NPS together you can gather actionable feedback on specific elements that positively or negatively affect customers’ loyalty and advocacy, allowing you to refine your brand strategy and create experiences that inspire customers to become net promoters.
Using Metrics to Empower Decisions
Embracing these foundational metrics and putting strategies in place to capture data will empower you to make strategic decisions that are more likely to have positive impacts on the success of your retail initiatives. When IPOS launches campaigns with our retail partners we make sure that we get performance feedback across these metrics so that we can continually improve retail campaigns. If you’d like to learn more about how to effectively measure the success of retail campaigns then get in touch today.