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Measuring Traffic: Cyberspace vs. Retail Space

During January’s NRF show in New York, I met Ray Sherman a publisher with Vertmarkets IT Group and he brought up the subject of correlating the intensity of tracking customer traffic to websites vs. how retailers here track (or ignore) their in-store patron traffic data. Ray’s analogy and comments got me thinking and this is what I came up with…

During the late 90s we witnessed the exaggerated hype regarding the “new economy” and website traffic. We learned new words such as impressions, click-through, hit-rates, eyeballs, etc. During this period, I published an article trying to put into perspective what the “new economy” meant. At the time I wrote; “from the beginning of time, if you had a good product or service, a means to promote it and backed it up by delivering excellent service – you had a business. New economy or not – without these elements you have nothing. With them you may have a winner, regardless of if it is brick and mortar or online”. At the time people saw me as lacking vision because I wasn’t buying into the hysteria and demanding that the core fundamentals of good business still had meaning. Since then, the hype has died, the bubble has burst and because the fundamentals have been accepted, online sales are growing and evolving into a mature market. The new economy learned something from the old economy and that is that substance matters.

From the launch of the big internet hoopla (Time Warner’s purchase of AOL) till today (Google’s purchase of YouTube) one thing hasn’t changed – it still is all about catching and maintaining people’s attention. The initial weakness that failed to construct a business model that would convert eyeballs to dollars has been replaced by a strong model that uses the internet’s core strength of counting and tracking as its centerpiece. The internet gurus understand how the processing of data is a crucial business practice.

Is there any doubt that we, the brick & mortar retailers, can learn something from new economy marketers? Regardless of whether you have a website or a store, would it not be prudent to say that you are missing the big picture if all you are doing is simply measuring your sales transactions?

Isn’t it safe to say that even though when I make a purchase on Amazon they follow-up to try and convert me into a return customer, the real focus of their marketing on getting my neighbor, who isn’t a customer, to buy something on Amazon? So too is it true that the people at are focused on tracking their website traffic and enhancing the user experience (based on their analysis of the tracking data) so that we will buy from them and not elect instead to click on Orbitz.

If the online retailers benefit so much from this detailed data, why wouldn’t brick and mortars? Fact is, the accumulated knowledge retailers have today on applying metrics based on store data is unsurpassed, impressive and ever improving. Yet most retailers base their in-store sales strategies on POS data, tracking customer response and subjective data on advertising campaigns, while ignoring the issue of “eyeballs” (how many people visited, how long did the visitor stay, and how many purchased something).

What would it mean to your chain if you could convert 10% of your browsers into buyers? What would it mean to your company if the term “non buyer” didn’t only refer to those who visited your store but those who never even stepped into one of your stores? Now break out the old calculator and start crunching some numbers. Do I have your attention now?

Currently, the bulk of retailers that have incorporated people counting to boost their in-store conversion rates are displaying extremely satisfying results and people counting has evolved into a mainstream practice for the bulk of retailers nationwide. This being said, five years from now the leveraging of traffic counts for impacting conversion rates will be SOP and the doctrines will be commonplace but the critical focus for people counting will be on the retailer’s advertising ROI.

Consider a small budget campaign in the weekly circular targeting 10-20 zip codes. Imagine the benefit if you could measure the precise impact that print advertisement had on your stores in that region. Consider your ability to grow this capability and show metrics that X print advertising dollars = Y% growth in weekend store traffic. What if you could measure the ROI in traffic on a national campaign?

Regardless of your investment in marketing and branding – measuring its effect on your traffic is the best way to understand its efficiency and develop the metrics to improve your message and measure your target audience’s responsiveness.

What could we learn if we compared the number of pedestrians that walked by a storefront to those that actually walked in? We would have the power the online retailers now have when they compare how many page visits did their homepage receive, what was the click through rate to the websites inner pages, and what was the total buyer ratio. The data would enable brick and mortar retailers to make statistically based decisions on store design and get a true estimate of the value of your real-estate.

Integrating the data on how long patrons stay glued to a pop stand in the store or an infomercial on a plasma screen could assist marketers in fine-tuning each campaign to maximize the return, just as webmasters are able to fine tune their web pages for greater “stickiness”.

Merging POS data and actual customer counts allow retailers to adapt practices to convert visitors to buyers – and that could mean big bucks. Getting your marketing and advertising strategies to perform better could mean drawing droves of new visitors to your stores. How would that affect your company’s bottom line? After this article, that should seem like a rhetorical question.