Retail conversion measures the proportion of visitors to a retail outlet who make a purchase. If 300 people visit your store in a day, but only 75 buy something, the conversion rate is 25 percent. To measure retail conversion, you must measure numbers of visitors and understand how to interpret the data. You can use the retail conversion rate to assess the affect of other marketing or operational actions, such as changing store layout, employing more staff, increasing stock levels or running promotions. If a store layout change results in an improved conversion rate of 35 percent, the change represents a successful strategy.
- Count the number of people per day visiting your store by installing a traffic counting system based on sensors or video cameras at the entrance to your store. Use a factor to eliminate partners, children or visitors, such as sales representatives or maintenance staff who do not represent potential shoppers. In a family store, such as a toy shop or supermarket, the proportion of non-shoppers is likely to be high compared with a specialist outlet.
- Calculate the number of purchases over the same measurement period using data from your checkouts. Compare the number of individual purchases with the number of store visitors to calculate the retail conversion rate. If you run a department store in which customers are likely to make multiple purchases from different checkouts, use other point of sale data such as credit card numbers to identify individual buyers.
- Analyze the conversion rates for different days of the week or different times of the day. Compare the rates over a period of time to see if conversion rates are improving or falling. Compare conversion rates for periods when you made operational changes to assess the impact of the change.
- Measure the true impact of marketing campaigns. An advertising campaign may increase the numbers who visit your store, but the retail conversion rate gives the true measure of the success of the campaign – increased sales.
- Assess reasons for a low conversion rate during an advertising campaign. Overcrowding in the store or at the checkouts may have deterred people from completing a purchase. Popular items may have sold very quickly, leaving no stock for later visitors.
Attribution modelling
Attribution modeling is a framework for analyzing which touchpoints, or marketing channels, receive credit for a conversion. Each attribution model distributes the value of a conversion across each touchpoint differently.
A model comparison tool allows you to analyze how each model distributes the value of a conversion. There are six common attribution models: First Interaction, Last Interaction, Last Non-Direct Click, Linear, Time-Decay, and Position-Based.
By analyzing each attribution model, you can get a better idea of the ROI for each marketing channel.
There isn’t necessarily a “best” attribution model. You may choose one as your primary attribution model for reporting and analysis. Different factors, like business goals or buying cycles, can make one model better than another.
Attribution modeling is an analysis tool. Don’t limit yourself to one and stick with it. Compare performance under each model to understand the importance of multiple touchpoints in the customer’s journey.
- Last Interaction Attribution – Last Interaction Attribution is also referred to as “last-click” or “last-touch.” As the name implies, this model gives 100% of the credit to the last interaction your business had with a lead before they convert. For example, a visitor finds your website through organic search. A week later they see a Facebook Ad and click the ad. Later that day, they go to your website directly and make a purchase. The direct traffic, in this instance, gets all of the credit for that purchase. 100% of the value is assigned to that last interaction. This is the default attribution model in most platforms, including Google Analytics. If you are looking at standard conversion reports in Google Analytics, you’re seeing each goal attributed to the last interaction your customer had with your business.
- First Interaction Attribution – First Interaction is similar to Last Interaction, in that it gives 100% of the credit to one click/interaction. First Interaction (also called “First-Click”) gives all of the credit for a conversion to your business’ first interaction with the customer. For instance, if a customer first finds your business on Pinterest, then Pinterest gets all of the credit for any sale that happens after that interaction. It doesn’t matter if the customer found you on Pinterest, then clicked a display ad a week later, and then went to your site directly. Pinterest, in this example, gets the full credit.
- Last Non-Direct Click – The Last Non-Direct Click Model is a bit more helpful than a standard last-click model. 100% of the value is still assigned to a single interaction. But, with last non-direct click, it eliminates any “direct” interactions that occur right before the conversion. Direct Traffic is when anyone goes directly to your site by manually entering your url or clicking a bookmarked link. So this visitor already knows about your company. How did they learn about your company? What prompted them to go to your website directly? By eliminating direct traffic in a last-click model, you can better assign value to the marketing strategy that led to the conversion.
- Linear Attribution – With a Linear attribution model, you split credit for a conversion equally between all the interactions the customer had with your business. For instance, a customer finds you on Instagram, signs up for your email list and later clicks an email link. The next week they go to your site directly and make a $120 purchase. There are 3 touchpoints in this situation. Each touchpoint gets 33% of the credit, or a $40 conversion value attributed to the channel when the purchase was made.
- Time Decay Attribution – Time Decay attribution is similar to Linear attribution – it spreads out the value across multiple events. But unlike, Linear attribution, the Time Decay model also takes into consideration when the touchpoint occurred. Interactions that occur closer to the time of purchase have more value attributed to them. The first interaction gets less credit, while the last interaction will get the most.
- Position Based Attribution – The Position Based attribution model (also called U-shaped attribution) splits the credit for a sale between a prospect’s first interaction with your brand and the moment they convert to a lead. 40% of the credit is given to each of these points, with the remaining 20% spread out between any other interactions that happened in the middle. For example, if a prospect first makes contact with your business through a Google search, looks at your Facebook page, and later signs up for your email newsletter, the first and third touches each receive 40% of the credit, and the Facebook visit receives the remaining 20%.
- Custom Attribution Models – Do you know a particular weight or valuation you want each touchpoint to have? Do you have a very specific funnel that you want to evaluate? You can create custom attribution models in Google Analytics. A custom attribution model lets businesses give a custom amount of weight to whatever touchpoints they think are most important.
Tips for increasing Conversions
You need your entire team to work together to get the most conversions possible. Giving your staff performance incentives gets them involved in conversions and rewards them for their hard work. Ask your employees what they would want as an incentive for sales performance, and help them reach those goals. Make converting customers a team effort by:
- Teaching your staff about conversions: Explain the concept of conversions to your staff, and give them advice on how to finalize sales.
- Setting reasonable goals: Set your conversion targets relative to your current performance to keep employee achievements within reach.
- Asking for employee input: Your staff has one-on-one interactions with customers, so see what they have to say about customer opinions.
These strategies can increase your team’s morale and help them feel involved in your store’s success
