How to Increase Footfall in Retail
Retail Feature – Driving Footfall
Retail is probably the one sector that has suffered more disruption than most others. From single channel, to multi-channel and now to omni-channel, Irish retailers are challenged with having to re-invent how they do things. On-line sales are growing as customers become more used to transacting on-line. And Amazon is a ferocious and formidable competitor that has spread its tentacles across all retail segments around the world.
We can’t ignore the positives with on-line retail. Thankfully there is a larger cohort of people who still derive pleasure from in-store experiences that are informative, accessible, inspiring and entertaining. Make no mistake, on-line retailing will not go away. It is a new wave of competition that is here to stay. But so is other competition for disposable spend, such as restaurants, weekends away, holidays, cars and new kitchens.
Many retailers feel beaten up with all the changes and many more have lost sight of their ability to still compete effectively. “The categories that are impacted most in Ireland by on-line are fashions, jewellery and footwear” said Lorraine Higgins, CEO of Retail Excellence Ireland. Yet, I notice that there are new independent stores in these categories opening in Ireland and competing very effectively.
I believe that much of this is to do with mindset and the feeling of being out of control. Over the next three weeks, I will reboot and refresh that thinking and encourage independent retailers to stand back, go back to basics and focus on what can be done to compete effectively.
Back to Basics
The fundamental sales levers for any retailer are locked in this simple formula.
Retail Sales Formula: F x C x A = S
F: The (F) is ‘footfall’. That refers to the number of people who enter your store. C: We know that many customers are browsers and they don’t all purchase something. Retailers can however influence ‘conversion’ which is the (C) in our model. A: Similarly, a retailer can also influence the ‘average transaction value’ for each customer, the (A) above. S: These three factors multiplied, give you your Sales, (S).
For example, imagine if you have 300 customers in a week (F) and 40% of them are converted (C) spending an average (A) of €50 each, that delivers sales (S) of €6,000. These three pillars act as signposts for a retailer to make considered decisions for increasing sales in store.
Tips for Driving Footfall
Starting with footfall, here are some basics to attract new customers.
1. Customers. Be clear on your target customers. In terms of your particular product offering, who and where are they, what are their buying motivations, preferences and expectations? Don’t waste effort or money focusing on people that would never buy from you. What is the best channel for communicating with them?
2. Windows. Exterior façade, shopfront and windows have always been important for retailers. When did you last go outside and look in with customer’s eyes? What messages do they convey? How often do you change your windows?
3. Messaging. Plan your content and your core messages. This should start with what do you want to say. We are living in an age where customers are bombarded with ads at every turn and at every swipe. What can make your ad stand out from the noise?
4. Media campaign. Plan a media campaign with a calendar and a budget. Mindful of your customers, consider a mix of communications channels. And it’s not just about digital. Traditional press, radio, TV or leaflet drops might still be appropriate.
5. Website. A professionally designed website is your digital window to your business. Even if you don’t sell on-line, a regularly updated website should represent your business. Consult an agency and get advice about how to best invest in digital ads and rankings.
6. PR. Consider PR activity. With a well-crafted hook and message, you may be able to ‘earn’ free exposure in various media channels.
7. Influencers. Bloggers can be very influential. Find the ones that are relevant to you and your business and consider making a connection with them.
8. Events. Brainstorm reasons for customers to come and participate or attend some in-store event. It might be a cooking demonstration, a tasting, a book signing, an educational class, a fun activity or competition.
9. Promotions, not discounts. Promotional activity, such as a launch of a new range, or a pop-up store, or a celebrity endorsement can encourage visitors over a period of time. Don’t let your default footfall driver be a ‘sale’ or ‘discounting’. That should be a last resort. Don’t underestimate your ability to attract customers with the other initiatives suggested here.
Attracting new customers is one very important aspect of driving footfall. All of the ideas listed here are being used every day by the most successful retailers in the world. But that’s not all. Remember too that driving repeat custom is also important. The key strategy for repeat custom is to ensure your customers have a great experience when they do indeed enter your store. (I’ll cover that in more detail over the next two weeks).
Your ambition should be three-fold. Get customers to buy from you today, come back again and recommend you to their friends. And that starts with your own mindset.
Alan O’Neill is Managing Director of Kara Change Management, specialists in strategy, culture and people development. Go to www.kara.ie if you’d like help with your business.
Alan’s debut book “Premium is the New Black” will be launched in October.
© Copyright. Alan O’Neill. All rights reserved. 2018