|
In good times and bad, retailers’ sales are, of course, dependent on several basic conditions: store locations, merchandise offered, inventory, proximity of competition, and staffing to name just a few. Beyond these basics there exists three additional, service-oriented ways to improve sales.
1. Sales Increase as Conversion Rates Rise
Today’s typical apparel store retail conversion rate stands at only 18% (82 out of 100 people who walk into a store leave without making a single purchase). While this is a statistic begging for understanding, in harder economic times it makes even more sense to know why shoppers leave your stores without making a purchase. Astute executives also track transaction volume to guard against an apparent but false rise in conversion rate caused by a drop in shopper traffic. To illustrate the dramatic effects of increasing your conversion rate, try using the ICC Decision Services sales calculator (shown below) to calculate the lift in sales you would receive from an incremental improvement in your conversion rate. In the example, increasing conversion from the benchmark 18% to 23% results in a yearly additional $8,176,000 in sales per 100 stores!
Do you know why shoppers leave your stores without making a purchase? Perhaps you should consider asking them by employing a customer exit interview program in select locations. Exit Interviews are conducted on premise, just as customers leave your stores. Trained interviewers intercept customers leaving without making a purchase. The interviewers ask them a series of questions created to explore exactly why they left your store empty handed. Exit Interviews often dispel intuitive explanations. For example, one, big-box retailer discovered they were not losing sales t due to inventory outages, but because shoppers could not find the merchandise they wanted.
2. Sales Increase as Suggestive Selling Is Employed
Our studies show that improving suggestive selling can increase the bottom-line by millions. To effectively increase suggestive selling you need to provide your sales staff with real reasons that customers should buy your merchandise. This will help them to reinforce the customer’s decision process. Next, you need assurance that sales associates follow through with each and every customer. You can further expand your suggestive sales programs by increasing sales through accessories and related products. Obviously, the more merchandise the customer is exposed to, the greater the likelihood that she will buy something. This means active selling, not passive assistance. Sales associates need to be reminded to actively sell and be motivated to follow through.
Do you know how actively your sales associates conduct follow-through selling? Use a Mystery Shopping program to objectively assess the compliance with your selling guidelines. Mystery Shopping utilizes trained shoppers to visit your stores and observe how guidelines are followed. The shoppers are sent into your stores with a list of observables (cleanliness of the store, display conditions, etc.) and a list of actions (approached by an associate, had additional merchandise suggested, etc.). After shopping your store, the shopper accurately documents her/his experience and the extent to which she/he saw each observable and received each action. In the below example, increasing suggestive selling from the benchmark 20% to 50% results in a yearly additional $5,216,400 in sales per 100 stores!
3. Sales Increase as Customers’ Experiences Improve
Sales strategies and selling themes developed at the corporate level very often are not executed at the store level. Most chain executives are so busy and immersed in their jobs that they don’t have enough time to objectively audit the customer experience their stores are delivering. Even when headquarters personnel make the effort to conduct store visits, it is rare that they actually experience their store in the same way that customers do.
Do you know how it feels to be your customer? A Customer Satisfaction Survey provides an direct view from your customers’ perspective. In contrast to the objectivity and process orientation of mystery shops, satisfaction surveys are about perceptions – the feelings of your actual customers. Customer Satisfaction Surveys are conducted by interviewing a sample of your customers to determine their perceptions of your stores and sales associates. The result of a properly conducted and implemented customer satisfaction program is a store-level action plan defining the key drivers of your business – what most needs to be improved to increase your customers’ satisfaction and therefore your sales.
|
