How to Use Footfall Analytics to Improve Customer Service

Published on 25 Sep 2017

Footfall measures the number of people who enter a shop or business in a particular period of time.^[5]Despite one-click shopping, 90 percent of all retail sales are still transacted in stores. That means plenty of feet are trekking to retail outlets to make purchases.

This might sound odd, but understanding those feet is key to improving customer service and, in turn, your business.

How do we do that? By gathering data and conducting a footfall analysis.

What is Footfall Analytics?

Footfall analytics is a fancy way of counting people who visit your store. The traditional way is to have an employee at the door as a footfall counter, clicking an old-fashioned customer counter.

Footfall analytics, however, relies on the latest technologies to count and track customers. In other words, a footfall analysis counts feet; it’s counting people.

Sounds simple, right?

You may ask, “Why bother? Why should I have a footfall counter?”

Well, retail footfall counters don’t just tell businesses how many people walk by their store and how many enter.

They also provide insight into what customers browse, how they browse, customer psychology, whether they walk out frustrated — and everything else that can be determined by counting people.

Footfall analytics is collected data that can be used to create a great customer experience.

Let’s use a real-world example to illustrate this.

The Kamppi Shopping Centre in Helsinki Finland is one of Europe’s largest malls, with over 100,000 people scouring its winding hallways every day. Before employing a footfall counter, mall manager Heli Vainio — and the mall’s marketing division — assumed that most customers shopped in the evening.

Makes sense. People are off from work in the evening so they stop to shop in-between their commute home. But our intuitions often lead us astray.

Once the Kamppi Shopping Centre set up people counter sensors and began collecting and analyzing footfall data, they discovered that most customers were actually shopping on their lunch break.

The results surprised the team but they were able to use the data to reorganize their approach to improve their retail customer experience:

“With customer analytics like this, we understand customer behavior with much higher granularity and are able to improve our decision-making regarding marketing, layouts, tenant locations, and much more.”

Instead of expending most of their resources in the evenings to meet customer’s needs, Vaino and his team reorganized their strategy to meet the needs of customers at lunch.

They were able to deliver excellent customer experience thanks to footfall analysis.

How Do you Gather Footfall Data?

How did the Kamppi Shopping Centre gather footfall data? Well, it’s more obvious than you might think.

WiFi & Bluetooth Footfall Devices

Smartphones are key to collecting footfall data. They act as a people-counting system.

WiFi and Bluetooth-enabled smartphones emit a ping as they search for a router or device to connect to. Footfall analysis counts and tracks those pings to tell businesses where they’re coming from to their store.

The data is completely anonymous so there’s no fear of violating customer’s privacy.

Not only does collecting smartphone data act as a people counting system and display footsteps, footfall data gives a detailed layout of store traffic. This helps you build an image of what your customers look like and how they shop.

For example, there is an apocryphal story in the data-mining community concerning Wal-Mart. Harvesting their footfall data, Wal-Mart discovered that young American men who bought diapers on a Friday were also likely to buy beer.

Diapers and beer. The unholy marriage between these two items would go unnoticed if it wasn’t for footfall analytics.

Then again, what could be done with this information?

Wal-Mart could have moved the diaper display closer to the beer to smooth buyers flow through the store. Perhaps this will incentivize customers who show up to buy diapers to buy beer as well, once they spot a cold refrigerator within their peripheral vision.

Even placing them closer together in a product list might generate some positive results.

A campaign in the spirit of “Buy a pack of diapers, get 10% off your next purchase of beer” may sound wacky — but hey, you should never ignore the possibility.

While this potential Wal-Mart promotion never emerged, businesses can adopt similar measures when they discover correlations.

The point being, you need to make the most out of data. When used properly, footfall data informs businesses how to improve the retail customer experience.

People Counting Sensors at Entrances

Footfall counters for retail don’t just use smartphones. Some stores employ a people counter sensor above their entrance to track the number of customers entering the store and passing by.

Sensors draw a far more accurate picture of overall store traffic since they don’t rely on customers who forgot to turn off their WiFi and Bluetooth signal.

Though sensors typically don’t track customer flow through a store, they do provide valuable footfall data.

So, what can we learn from footfall sensors?

A people counting system using sensors lets businesses know when a potential customer was close to using a service but decided to decline.

(This is called a reneging customer behavior.)

People counters may even tell you when a customer was close to entering your location but then reconsidered. Maybe the storefront wasn’t attractive enough for them?

Storefronts set the tone of a customer’s shopping experience, and footfall data helps businesses tweak their appearance to suit their customer’s expectations.

Footfall analytics also lets businesses know when customers leave a store without making a purchase.

At some electronic stores like Microcenter, customers expect assistance from employees. But if there aren’t enough employees at peak hours, customers stomp out the door.

A retail store traffic counter tells managers their peak hours so they can schedule the appropriate staff to meet customer demand. Thus, people counting systems may even prevent poor customer service from affecting your sales.

Engagement

No long-term relationship ever feels complete without engagement — and customer-business relationship is no exception.

Ultimately, footfall analysis is about using data to improve customer engagement. The data is akin to having a conversation with your customers about their shopping habits.

Albeit, since it’s impossible for a mall to gather feedback from all visitors, footfall data talks for the customers. Knowing your customers better means being better able to cater to their interests.

Let’s imagine your store is launching a new line of personalized selfie sticks. Well, when do you want to launch your promotional campaign?

Do you want to pour resources into promoting the “Fab-Selfie-Stick” at lunch, when customer counters tell you your primary demographic is people between the ages of 30 and 55?

Selfies are primarily taken by millennial customers between the ages of 18 to 29, and our footfall data shows that this group makes up the majority of weekend visitors. Therefore, it makes far more sense to run the campaign on Saturday, then say Wednesday at 1:30 PM.

Footfall data provides points of information telling businesses when to market products, whether that be to cater to a demographic or perhaps to capture the most number of eyes at peak traffic hours.

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Footfall analytics can’t tell businesses how exactly to conduct themselves. But people counter sensors and footfall traffic data does provide ample information for guiding decisions.

That information can be used to greatly improve the retail customer experience. Because by improving the lives of customers, businesses improve themselves.

Qminder is a customer management system that swears by these words. Where others may promise business success at the expense of customers, we understand the intrinsic mutual link between a customer and a business.

Footfall analytics is a major part of Qminder’s service, and it has already helped many businesses grow and expand using numbers that are backed up by real-time statistics.

Join the ever-growing family of Qminder users and make the most out of a 14-day free trial.

Analyze Your Footfall With Qminder

Get valuable service and experience insights from successful businesses.

Increase footfall and convert customers to sales.

Footfall is the bread and butter for any store manager – intrinsically linked to driving sales in retail and improving conversion rates, the more people that come into your store, the more chance they will buy something.

Our retail consultants can also measure the impact of Brand Awareness; window displays and matching staff scheduling with footfall peaks and troughs – so you can identify footfall drivers and make the necessary changes and improvements to improve total retail store performance.

Get in Touch

In our experience, the main methods to drive footfall include:

• Good Customer Experience – More and more retailers are offering experiences in store to encourage repeat visits. In fact, 40 percent of shoppers said improvement in the customer experience would make them spend more with a company.

• Showrooming – Retailers who continue to have physical stores are building a complete multi-channel experience for customers. In fact, 70 percent of shoppers prefer to buy online with retailers that have a bricks and mortar presence.

• Promotions –  38 percent of consumers look for coupons or vouchers before shopping. As consumer spending slows, the importance to grab a bargain increases and the informed shopper expects something back in return for loyalty.

• Weather – Changing weather conditions can have a strong impact on your bottom line. Whether you are a shopping mall, fashion outlet or garden centre, what the weather is doing will affect customer buying behavior and shopping patterns. Retail winners are those that can be flexible quickly.

• Trends and Events – An election, the birth of a royal baby or a sporting triumph can influence customer buying behavior. Once you have people counting systems in place, retail analysis can help you forward plan using historical data to establish footfall driving trends and patterns, so you can schedule staff based on fact, not guesswork.

Here at Ipsos Retail Performance we understand the complex challenges and factors that influence footfall. Each month we publish a Retail Traffic Weathermap, which shows the volume of footfall entering retail stores as a true reflection of high street performance and economic confidence.

We look at regional changes, year-on-year changes and give monthly forecasts for what the future holds which is invaluable for retailers wanting to gauge longer term trends and comparative performance.

 If you are a shopkeeper or own a retail establishment, strip mall or restaurant, you might have heard the expression footfall traffic. While you know that it must have something to do with passersby, you might still be unclear as to what footfall means. You know that it has something to do with… well… feet. However, footfall is not the same as footsteps. When considering footfall vs. footsteps, you must keep in mind that footfall specifically pertains to people counting or shopper counting. Market research giant Ipsos defines footfall as “the measurement of people entering a shop or shopping mall”. Now that you know what footfall means, why is measuring footfall important?

Why footfall matters

There are two key elements to why footfall is so important: what footfall tells you, and what footfall means in terms of conversions. First, footfall tells you how successful your marketing strategy is, in terms of drawing prospective customers’ attention. A high number of people walking into your store is an indicator that your advertisements, marketing campaigns, and window displays/product placement are effectively drawing large numbers of potential customers into your store or shopping centre. Conversely, a low footfall number can indicate an unsuccessful marketing campaign. This knowledge is important, as not knowing these footfall figures can result in revenue loss of up to 15%. The other reason that footfall data is so important is that it allows businesses to know many of these customers walk away having purchased your product.

Footfall and conversion rates

As a store owner, you are aware that your profits hinge on conversion. Conversion, in a retail context, is the process of turning a prospective customer (e.g. someone that is walking by your store, or who is perusing your sale rack) into a sale. More specifically, retail conversion measures the proportion of visitors to a retail outlet who make a purchase. So, to know your conversion rate, you first have to know how many visitors your store has each day. For instance, if 500 people visit your store, and 50 make a purchase, your conversion rate is 10%. If you only know the total number of sales, but do not know your footfall figures, then you are missing a key piece of data that allows you and your team to know how effective your sales strategy is at turning a “maybe” into a “yes”. Footfall data helps retail teams approach their sales and conversion strategy armed with accurate and up-to-date information about the shoppers that enter their stores.

Conclusion

Now that you understand what footfall and conversion mean in a retail context, you will surely appreciate why it is so important to measure footfall. Footfall traffic is a key indicator of how effectively you draw in potential customers, while conversion rates help you to better understand how effective your team is in turning footfall into sales. Footfall counters are one way of helping your store capitalise on opportunities for sales throughout the day; some footfall counters can further your knowledge of your customer base in ways that improve conversion rates dramatically.

Optimizing customer shopping experience has always been a fundamental focus of in-store marketing. In order to achieve long-term goals and to stand out from all the competitors, retailers are seeking innovative and efficient ways to understand their customers’ behavior.

Real-time information about customer traffic flow in your store can be used for conversion rate and occupancy calculation. With the integration of other customer-associated data, including demographics, pathway and interest zones, the marketing strategy and store performance can be substantially enhanced.

The solution can be flexibly achieved on three platforms, counting cameras, counting software and standalone counting server, meeting your installation requests.

TRACKING CUSTOMER COUNTS IS THE ESSENTIAL FIRST STEP.

By Mark Ryski | July 2012 | Expert Insights

Same-store sales are looking a little flat and you need to find ways to deliver better results. There’s still a scent of the financial melt-down lingering, but you survived that crisis and it’s time to start getting the sales needle to move in a positive direction.

There are only three ways you can drive sales in your stores: (1) encourage more prospects to visit your store; (2) increase your average ticket and (3) increase your conversion rate — that is, sell to more of the prospects already visiting your stores. These are the folks who visit your store but don’t buy.

To a great extent retail sales has been a two-trick pony: drive more prospect traffic and increase average ticket. Driving more prospects into your stores usually requires an advertising or promotional investment of some kind, and increasing average ticket, well let’s just say that most retailers have been and continue to focus on this one — but what about conversion rate? Driving conversion rate is the third trick every retailer needs to learn — it’s another source of sales opportunity that most retailers today completely overlook.

Before I get into the ways you can drive conversion, I need to confirm that you actually track traffic and calculate conversion rate in your stores. First, you need to actually track prospect traffic. This is not the same as transaction counts. Lots of retailers are confused about this. Transaction counts represent the number of people who made a purchase; traffic counts represent the total number of people who came to the store including buyers and non-buyers. Conversion rate is simply calculated by dividing sales transactions by gross traffic counts. For example, if you logged 500 traffic counts in your store and there were 200 sales transactions for the day, your conversion rate would be 40% (i.e. 200/500).

As you can see, without traffic counts, you can’t actually calculate conversion rate.

The fact is, if you don’t track traffic in your stores, you can’t calculate conversion rate. If you can’t calculate conversion rate, well, you can’t improve it. So for the roughly 35% of retailers who actually track traffic and conversion rates, here are five ways you can improve conversion rates in your stores.

1. Understand why people don’t buy: one of the most important things a retailer can do to improve conversion rates is to understand why people don’t buy. Long till line ups, can’t find sales help, out-of-stocks, poor merchandising, the list goes on. There are reasons why people visit your store and don’t buy and you need to understand it. Every store manager should spend some time observing visitors in his/her store. Resist the temptation to help; just observe the behaviors. Watch customers as they move through your store, and it won’t take long for you to identify some actions you can take to turn more visitors into buyers.
2. Align your staff to traffic not transactions: Sounds simple enough, but one many retailers overlook. Staff scheduling is tricky at the best of times, but aligning your staff resources to when prospects are in your store will help you maximize your chances of converting more of them into buyers. Pay particular attention to lunch time, when store traffic can be way up, but staff lunch breaks can seriously drag down conversion rates. Associates need to eat, but customers need to be served. Matching staff schedules to traffic volume and timing in your store will help improve your chances of converting more.
3. Look for conversion leaks and plug the holes: Traffic volume and conversion rates tend to be inversely related. That is, when traffic is high, conversion tends to go down or sag. When traffic levels are low, conversion rates tend to go up. It’s not hard to understand why this happens. When the store is busy, till lines are longer and it’s harder to get help from an associate. The opposite is true when the store isn’t as busy. So, if you want to improve conversion rates, look at the traffic and conversion patterns in your store by day of week and by hour to look for when conversion rates are sagging — these sags represent the times when sales are being lost.
4. Set conversion targets by store: having goals and targets are important if you want to improve results. If you don’t have a conversion target for your store, you need to set one. It’s important to remember that every store is unique and conversion targets should be set uniquely by store. One store might be doing well with a 15% conversion rate while another may be under-performing even though it has a 30% conversion rate. The trick is to move your own conversion rate up relative to your store’s performance.
5. Make conversion a team sport: it takes the collective effort of all staff to help turn prospects into buyers. From the cashiers and sales associates to the merchandisers — everyone in the store plays a role. So don’t think of conversion as merely some business metric, but rather a simple measure of how well the whole store is doing at helping people buy. A good way to help improve conversion is to ensure all your staff understands what conversion is and that each of them helps influence it. Ask your staff about why they think people don’t buy and what the store can do to improve conversion rate. Discuss targets, get them to buy-in and share results. Get them excited about moving the conversion needle and you will significantly improve your chances of actually doing it.

Everyday prospects visit your stores with the intent to buy, but leave without making a purchase. Getting your store to capture even a few more of these lost sales can have a significant impact on overall sales results. Improving your in-store conversion rate is not hard to do, but it does take focus and attention — the suggestions above will help you drive conversion in your stores.

If you don’t track traffic or measure conversion rate in all your stores today, simply put, you are missing out on an entirely new way to drive sales. You can’t improve conversion if you don’t measure it. The retailers who are focused on driving conversion rate have a significant advantage over those who do not.