Magazine Article | August 22, 2006

Tally Store Traffic, Double Conversion Rate

Source: Innovative Retail Technologies

By interfacing traffic counting and POS data, Liz Claiborne Canada drove sales.

Integrated Solutions For Retailers, September 2006

After retailers begin selling products online, they oftentimes receive traffic reports to see how many potential customers visited their Web site versus those who made purchases. Applying this same theory to your brick-and-mortar stores can help drive sales, schedule staff appropriately, and identify the effectiveness of advertising techniques. This is what Eric Champagne, VP of information systems, information technology, and logistics, at Liz Claiborne Canada, Inc. accomplishes with his traffic counting system.

Liz Claiborne purchased Mexx Canada, a clothing retailer, about four years ago, and in January 2006 Mexx was rebranded Liz Claiborne. Mexx was using a traffic counting solution by St. Michael Strategies (SMS) with a few KPIs (key performance indicators), because it wanted to maximize the purchase potential of those entering its stores. “The system physically counts the traffic entering and exiting our stores with laser beams or overhead infrared curtains,” says Champagne. “Once the traffic counts are combined with the total number of sales and the average sale amount, we use the information to identify trends that drive sales. We don’t use the system as an excuse to justify days with low sales; we use it to strategically sell more.”

Liz Claiborne Canada uses a GSI (Gemmar Systems International, Inc.) POS system called Retail-1 Store. Store managers at all Liz stores spent at least 45 minutes per day keypunching information to combine the data from the traffic counter and the POS data. “The process was very labor-intensive for store managers,” states Champagne. “Plus, the data from 102 store locations was sent only once a week to the corporate offices. We wanted to merge this data automatically and supply store feedback to corporate more frequently.” As a result, Champagne investigated approaches to integrate the scheduling, traffic report, and POS data. SMS created a graphical interface called TMS Enterprise to merge and report the data based on the way Liz wants to use the information with store managers. Because of this interface, Liz corporate now receives data from all 102 stores every hour.

Since the data is transferred to corporate more frequently, this enables store managers to spend more time driving sales versus entering data. Additionally, the corporate office monitors conversion rates and KPIs for all stores and regions every hour. Two corporate full-time employees, who are also available to assist store managers with scheduling questions, perform this monitoring.

Increase Conversion Rate From 8% To 18%
“While the system is capable of handling scheduling at the store level, I prefer that store managers use their gut feelings to make business decisions about scheduling,” says Champagne. “Store managers can call the corporate offices for assistance in identifying trends and making better decisions. Corporate employees have exposure to data trends and scheduling situations from all of our stores.” Furthermore, Liz uses KPIs to justify its store budgets, so with this timely information, managers are more likely to achieve their goals because they lower the number of scheduled employees and increase sales. Initially, stores were averaging an 8% conversion rate using Liz’ traffic counting approach. It now achieves an 18% conversion rate (which took 5 to 6 years to achieve), and the new interface enables Champagne and his team to move even faster.