How to Measure Retail Store Conversion Rate with Square POS

Utilize your existing Square point-of-sale system to measure and track conversion rates for your retailer.

How can you calculate the retail conversion rate?

Retail conversion rate refers to the number of people who bought something from your retailer out of all possible customers you had in store at that particular time.

To illustrate this with an example, let’s assume you are the store manager that drew in 500 customers total over the last weekend, with 250 people making a purchase.

Using the formula for retail conversion rate, which is:

Number of Customers Who Bought Something / Total Number of In-Store Visitors x 100

you could determine that

250 / 500 x 100 = 50%

Meaning your store had a conversion rate of 50% last weekend, which is an outstanding achievement.

Did you know that a 1% increase in your store’s conversion rate can mean a 10% increase in revenue?

Click here to discover how Dor can help you understand your foot traffic data and make more profitable business decisions.

Why is conversion rate important for retailers?

You may have noticed that more and more retailers are beginning to measure the conversion rate for their stores and wondered why that is the case. The most significant benefit to tracking retail conversion rate is that it helps put sales performance into context, rather than focusing simply on the numbers.

To go back to the example above, if you didn’t know that the store you manage had 500 visitors last weekend, you might be tempted to think that 250 sales are a low number. But knowing the conversion rate—that 1 out of 2 visitors to your store bought something—may help you notice that the issue isn’t with merchandising and perhaps encourage you to focus more on getting a greater number of customers into your store through other marketing efforts.

How to measure conversion rate with Square POS

If you’re already using Square as your point-of-sale (POS) solution, you already have an advantage when it comes to measuring your retail conversion rate.

One of the most critical factors in measuring conversion rate is to know how many people actually visit your store, which is only possible with a people-counting solution such as a foot traffic sensor. To get the most bang for your buck, you can opt for an easy-to-install thermal sensor such as Dor’s battery-operated solution.

After installing the people counter into your store, all you have to do is go over to the Square dashboard and start the one-click integration, and you can start measuring your in-store conversion rate right away.

How can you increase the retail conversion rate?

One of the easiest ways to get more people into your store and encourage them to buy something is to offer a special discount—after all, who doesn’t love a good deal?

Using your people-counter, you can determine the slowest times for your store and offer limited-time discounts or BOGO (buy one get one) deals to draw in more visitors during those hours.