Store managers using the Vend point-of-sale (POS) system can easily utilize their existing setup to measure the conversion rate for their retailer.
How can you calculate the retail conversion rate?
For those who might be unfamiliar with the term, the retail conversion rate is essentially the number of people in your store who were “converted” into customers by making a purchase, expressed as a ratio of all visitors to your store at a given time.
The formula for calculating retail conversion rate is:
Number of People Who Made a Purchase / Total Number of Visitors to Your Store x 100
For example, imagine your store welcomed 300 customers last Friday, and 100 of them made a purchase. The conversion rate for your store last Friday would be:
100 / 300 x 100 = 33.3%
Considering the industry average conversion rate is 20 percent for brick-and-mortar stores, you could say that your store performed especially well last Friday, with a conversion rate of 33.3%.
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?
Conversion rate is a crucial metric for store managers who want to track their store performance over time. For instance, if you were the store owner in the above example, you might think that making 100 sales last Friday would mean you could achieve the same performance this week. However, suppose you were to track the conversion rate for every Friday in the past month.
In that case, you might notice that your store hardly ever gets 300 visitors in one day—making last week an anomaly, as perhaps there was a tour bus in the vicinity and the passengers on that bus all happened to want to buy something from your store. In other words, tracking conversion rate consistently over time gives you a more holistic view of your store’s performance.
How to measure conversion rate with Vend POS
Assuming your store already utilizes the cloud-based Vend POS, measuring conversion rate is easier than you might have thought it would be.
First, you’ll need to get a people counter to measure foot traffic or the number of people who walk into your store. One of the easiest solutions to employ here is a thermal sensor such as Dor’s battery-operated one.
Once you’ve installed your foot traffic sensor, you simply need to pull up the Vend POS dashboard and do the one-click integration to begin measuring foot traffic and calculating your conversion rate.
How can you increase the retail conversion rate?
One of the best assets you have as a retailer is your staff, so it’s essential to train them well.
Ensuring that your staff is always friendly and helpful without being overbearing can convert even the most frugal store visitor into a repeat customer.