Jun
24
2013

RETAIL CONVERSION – THE COFFEE TABLE THEORY

Retail Conversion – The Coffee Table Theory

When evaluating retail conversion across your estate, you’d be wise to think about this metric as a leg on a coffee table.

Sure, like a single table leg, retail conversion analysis is important – but it’s actually not very useful on its own.  In fact, there are three other ‘legs’ of information that you require in order to truly understand the impact of conversion in your stores:

1) Store visitors

Your ability to convert customers is completely dependent on the number of visitors that you have.  So take a good look at this data and seek an accurate record of visitor activity through all of your stores and across all trading hours.  High conversion rates in a low-visitor number store should not be considered more successful than a lower conversion rate in a much busier store.

2) Store sales

Conversion is a measure of the number of transactions made by store visitors.  However, the conversion rate does not take into account the actual revenue.  Therefore, alongside conversion, it is also important to consider the actual revenue taken in each transaction: your average transaction value (ATV) per paying customer.   High conversion rates combined with low ATV demonstrate higher customer service levels but lower profitability

3) Your Staff

Your ability to convert store traffic into paying customers is directly linked to the store experience. This includes your product form and availability but also your ability to service those customers – either through a smart self-service kiosk or, more likely, your in-store staff.  Insufficient staff levels will impact retail conversion rates as customers have to queue longer. Longer queues lead to shoppers abandoning  their purchases or generally experiencing poor customer service levels.  This scenario is also not good for staff morale – overworked staff is another precursor to unhappy customers.  That said, the opposite situation isn’t healthy either – having an abundance of staff introduces substantial cost to your store for the sake of improved customer service and at the price of efficiency.

To complete this analogy, a successful, practical and useful coffee table is one where you get the right balance across all of these legs.  Understand your opportunities and limitations by considering all four metrics together.  This analysis will help you to work out how to achieve your optimal profitable conversion rates throughout your retail estate.


  1. No comments yet.

  1. No trackbacks yet.