Has the internet changed the nature of the way shopping occurs in stores these days? more
Facebook Places, Foursquare and just about every Social Networking seems to be focusing on location these days. But the problem is they all rely on some sort of check-in, whether it be manual check-in by the user or using the latest GPS/Geo-fencing based check-in.
Paco Underhill, noted author of exhaustive studies on retailing, explains why you need to start collecting In-Store Shopping Metrics:
1. When Paco Underhill asked a senior executive of a multi-billion dollar retail chain - “How many of the people who walk into your stores buy something?” The execs answer was: “Pretty certain that the number was near 100%!” After all, the executive reasoned, “our stores are shopping destinations, and people don’t go there unless they have at least a few specifics things to buy.” However the correct answer: 48%! And this was based on hundreds of hours of study, including, among other things, counting the number of shoppers who walked out vs the number who purchased. As a saving grace, Paco, told the executive that his chain was doing very well. For non-grocery retailers … the apparel, accessory, electronics, white goods, those numbers are typically less than 48%.
2. His 2nd question to the senior executive was - “What is the average time, a non-buyer spends in a particular department/store vs a buyer?” Answer: Cosmetics Dept (Non-Buyer: 2 min; Buyer: 2 min 30 seconds); Toy Store (Non: 10 min; Buyer 17 min); Electronics (Non: 5 min; Buyer 9:30 min). So time-spent is critical to money spent. And one of the key things which increases time-spent is interception rate which was his next question.
3. His 3rd question: “Do you know the interception rate … and the impact it has on spend?” Interception rate is the percentage of customers who interacted with a sales associate. They did a study for clothing retailer and found the interception rate to be 25% .. so 3 out of 4 customers did not interact with a sales associate … according to Paco this is dangerously low.
4. His final question: “What is the average wait time for checkout … and lost sales due to long checkout times?” Anecdotal evidence” A housewares retailer VP was startled when he saw a video of a lady who had spent 22 minutes shopping, had a cart full, and abandoned the cart and exited the store when it dawned on her that she was in cashier hell.
In the world of retail where most items tend to be a commodity – there is truly only one way to differentiate and that is delivering exceptional customer service it’s the final frontier!
