Increase Conversion Rate Through Traffic Counting

Used with permission from Integrated Solutions for Retailers magazine

Every retailer strives to increase sales, and traffic counting is a reliable tool that can help achieve this goal. In the retail environment, traffic counting systems are used to calculate the conversion rate, which is the percentage of store traffic that makes purchases. The conversion rate is the key performance indicator (KPI) of a store's performance. Liz Claiborne Canada's Eric Champagne, vice president IT, IS (information systems), and logistics, and Ariane Boisclair, sales and traffic analyst, needed a way to increase sales through traffic. Specifically, they needed a solution that would monitor and forecast traffic to better staff the sales floor and in turn, increase the conversion rate. Headquartered in Montreal, Liz Claiborne Canada is a clothing retailer that operates 145 brick-and-mortar locations throughout Canada. Champagne began analyzing Liz Claiborne Canada's conversion rates over 12 years ago. "Years ago, traffic was simply used to explain bad results on Monday morning," says Champagne. He soon realized that in order to capitalize on the relationship between traffic and sales, he needed to implement a traffic management solution in each store.

In order to bring this theory to fruition, the retailer upgraded its traffic counting solution. Champagne continued his relationship with the vendor, and in 1999, the retailer implemented SMS' T-Rex laser counter hardware and traffic managementsoftware (TMS) application. The laser beam can span an entranceway's width from 6 feet to 20 feet. The T-Rex is located in every doorway accessible to customers. If the stores have escalators, the T-Rex is located at the top or bottom depending if they are going up or down. In mall locations, the retailer implemented mall detectors, which count the traffic walking by the store versus the traffic coming into the store. Each store location is able to view its own conversion rates and other KPIs, including average sale, customer per staff hour, transaction per staff hour, and performanceon- traffic ratio. Based on these KPIs, sales managers increase floor staff to accommodate forecasted increases in traffic patterns.