Brick-and-mortar businesses have constantly been compared with e-commerce in this technology-driven era. But while many retail transactions are done online these days, physical stores remain crucial for business success.
Still considered as the future of retail, physical stores support face-to-face and hands-on transactions. This is particularly useful for shops selling electronics and other products that customers prefer to try out before buying.
More importantly, brick-and-mortar transactions can provide retail store analytics and valuable insight into consumer behavior through footfall tracking, both of which could make a big difference for your business.
Here, you’ll learn how you can understand customer behavior better with footfall analytics and what use you have for it in the first place.
Why do you need to understand customer behavior?
Before learning how footfall counters help you get inside the minds of your customers, the first thing you must understand is the reason why you even need to do so.
- Understand consumer expectations
Learning how your target customers behave allows you to understand their expectations. If you know what they look for in a product, you will have a better grasp of why they make certain purchasing decisions.
This information is crucial when assessing the type of products that customers want to buy. It also gives your marketing team data they can use to present those products in a way that could convince your target market to purchase them.
Ultimately, this ensures that what you choose to offer will sell in the market.
- Differentiate various types of customers
Customer behavior also helps distinguish one group from others. This allows companies to pinpoint target groups based on the way they behave.
Take note that while your business already has a targeted demographic, variations between these individuals can still emerge, with each group having its own needs and wants. Marketers can use details about these sub-groups to create customized ads, promotions, and marketing programs.
- Reduce customer churn rate
Besides attracting new customers, consumer behavior also helps you keep old ones, thereby reducing the churn rate.
Churn rate describes the percentage of previously loyal customers who end subscriptions or stop visiting stores. This number should be kept low because retaining customers is much more profitable than constantly trying to attract new ones.
- Learn why customers are buying from competitors
Another reason why you need to study customer behavior is to figure out what could give you an advantage over the competition. With this, you can learn:
- whether a customer is buying from competitors
- why customers buy from competitors
- what makes your competitors’ products so special
- what gaps do your customers find between your products and those from similar stores
Knowing all this allows you to face the competition more prepared. Analysis of this data also helps you to come up with a plan to get a competitive edge in the market.
Footfall Count: Why Is It important?
To improve your sales and grow your retail business, you need to find a way to study consumer behavior. And one of the oldest and most effective ones is measuring footfall.
At the most basic level, this system entails counting a store’s visitors the old-fashioned way – with an employee standing at the entrance armed with a manual customer-counting clicker.
Of course, newer, more innovative systems use thermal imaging, infrared beams, video cameras, and facial profiling. All of this allows retailers to gain information not only on the number of people walking in and out of a store but also about how they move around.
In other words, retail footfall analysis helps you understand customer behavior better by:
- Identifying peak traffic periods
In-store footfall analytics determine specific times when the highest number of customers visit a particular store. This can help you plan your staff roster and schedules better to ensure that you have enough people attending to your customers’ needs.
- Mapping customer movement inside the store
Besides determining the number of visitors, newer footfall counting systems also let you know how these people move inside your establishment. Camera- and Wi-Fi-based counters, in particular, can map customer movement through the store.
For those using cameras, mapping is done by capturing videos and images of shoppers as they move through the premises. Meanwhile, Wi-Fi-enabled counters depend on the Wi-Fi signal strength that the shoppers’ smartphones get as they walk around the store.
Once you know how shoppers move around, you can now create a map of the customer journey that shows which sections and aisles shoppers are most drawn to and what they tend to avoid. From there, you can focus on the areas that don’t get much traffic, determine why this is the case, and make necessary changes to make those sections more appealing to customers.
- Measuring walk-bys
Knowing how many people pass by the store is also important in retail.
These so-called “walk-bys” are the people who walk past the store entrance without taking a step inside the store premises. In other words, this is the passing foot traffic that doesn’t convert into walk-in customers.
By knowing this metric, you can rule out the possibility that your location contributes to your store’s poor performance if there are plenty of people passing by. What you can look into, instead, is the possibility that your window displays aren’t as appealing or as welcoming as they should be to convert walk-bys into walk-ins.
- Tracking customer loyalty
Footfall counters are also useful in tracking loyal consumers as some of them can recognize returning customers.
Since they are most likely to make bigger purchases compared to first-time buyers, retail stores must know who they are and target repeat customers in programs that reward their patronage. Business owners should invest on software like Placewise for they have a mobile shopping mall loyalty programs application that can easily forward special offers and discounts through the app to their customers.
- Monitoring customer bounce rate
In online analytics and SEO, the bounce rate refers to the percentage of web users who leave the page without navigating within the website further.
Although slightly different, bounce rates can also apply to brick-and-mortar stores. In in-store footfall analytics, the bounce rate is the percentage of shoppers who leave the shop immediately after entering. These are those who spend about five minutes or less inside without making any purchase.
A high bounce rate for retail stores could mean several things, like the following:
- Your store has too few staff members to assist customers.
- Your employees aren’t exerting enough effort to engage with customers.
For these two problems, you could either adjust your staff roster or train your employees for better customer engagement.
In some cases, customers leave the store early because the shop is messy, dirty, or unappealing. If this is the case, it may be high time for a store revamp.
Know Your Customers
One of the best ways to know your customers better is to take a look at how they behave inside (or outside) your store.
With footfall counter systems as part of your customer analytics, you can boost your day-to-day sales and the company’s overall revenue.