Most retailers have a way of capturing data around who enters and leaves their stores.

Most retailers have a way of capturing data around who enters and leaves their stores. There is such a widespread proliferation of systems, solutions and approaches however, that one could argue the systems themselves have become commoditised and the function they perform is at best taken for granted and at worst completely ignored. Many retailers see the adoption of people traffic counting as a tick box exercise and one that delivers only a rudimentary snapshot of how their stores are performing.

In reality this means that retailers are making significant investments in sophisticated technologies, the benefits of which are never fully realised. This not only puts retailers at a disadvantage but also runs the risk of devaluing the entire traffic counting industry. With competition fierce and margins tight, retailers need to look again at foot traffic analysis. It is also the responsibility of the foot traffic industry to educate retailers on the wealth of business intelligence available to them via their traffic counting data.

Many early adopters of traffic counting technology are now using methods, sensors, software and systems that are unsupported and have fallen behind in terms of their accuracy levels. Thermal imagery for example is often oversensitive to heat and light which can affect the quality of the data captured. Secondly, many of the legacy approaches do not even contemplate capturing the new dynamics of retail. As an example, in an omnichannel environment, with shoppers having the choice of buying in store, online or via their mobiles, it is more important than ever to have a reliable picture of which physical store browsers turn into buyers.

In order to measure sales conversion effectively the initial foot traffic data must be accurate. It is not uncommon for discrepancies between traffic counts to be as high as 20-30%, yet retailers seem prepared to write these variances off as acceptable fluctuations. Surely there can be no clearer indication that the data is not taken seriously enough - continuous inconsistency from an unmanaged service can have a significant impact on how a business can analyse its performance.

Where vendors also fail to deliver is in the analysis of the data and how it can be used to improve store performance, conversion rates and overall operational efficiency. After installing the traffic counting solution it is often left to the retailer to analyse the resulting data. Many take that data at face value, for example: foot traffic was up 4% on the same month last year, therefore we must be performing better. There is often no clear understanding of the link between those entering the store and those that actually make a purchase.

This is in part due to the relatively small investment required to implement traffic counting solutions versus the significant cost in terms of the infrastructure, data warehousing and analytical skills needed to analyse how the data truly reflects business performance. At a time when retailers need to focus on retailing rather than becoming traffic management experts, it is not surprising that the data is not leveraged to its full potential.

With accurate foot traffic counting systems and skilled data analysis retailers can begin to unlock the value of conversion data. Enlightened retailers begin by analysing marketing effectiveness and marketing spend per visit. They then use this insight to improve operational efficiencies, for instance by mapping it to track labour and scheduling - looking at peak traffic and conversion flows to help them plan where and when they position key sales staff on the shop floor. It also enables them to monitor when they are spending too much or too little on staffing.

By extracting the most value from this data, traffic counting can be elevated from the domain of store managers to becoming a board level business intelligence tool. Traffic partners can provide insight to the marketing department on the success of promotional activity while guiding the operations director on store efficiency and even helping to determine store strategies and layouts.

By harnessing data across the retail industry, analysis can provide insight into the performance of specific sectors - for example, how are luxury stores performing across the UK compared to last year? Sharing data and best practices and gaining value from being part of a community adds another dimension to the level of insight to be derived from store traffic devices.

Getting foot traffic analysis right is not as simple as fitting devices to entrance and exit points and glancing through a weekly report. By working together in partnership, vendors and retailers can unlock a wealth of data that can calculate sales opportunities and conversion rates, compare store performance locally, regionally or globally, determine marketing campaign effectiveness and improve labour scheduling efficiency. For retailers serious about improving their store performance this is a far cry from a tick box exercise.

  • Todd Starcevich, chief executive of Europe and Middle East, ShopperTrak