How to Improve Conversion Rates in Your Retail Store

Have you ever seen someone walk into your store, look around, and walk right back out without purchasing anything? We all have. And, here’s the bad news. You’re not going to make any money from window-shoppers. What you need to do is learn how to improve your conversion rates.

Obviously, your goal as a budding modern-day retailer is to try and optimise your retail store to encourage more conversions. However, it’s easier said than done though, isn’t it? We agree. So, we’ve written up a short how-to guide to explain what you’re missing out on, and offer some ideas to improve your chances of converting your customers. Let’s get started.

• What is a conversion rate for retail?
• How to work out your conversion rate
• How to increase conversion rate

What is a conversion rate for retail?

Your conversion rate is the percentage you get when you divide the number of purchases by the number of people who came into your store. In order to figure this out, you will need to get a counter installed at your door (if you don’t already have one).

Whenever you’re calculating a conversion rate for your brick-and-mortar store, you should know that it is a close approximation rather than an exact number. Your store will often have people coming into your store that don’t exactly count, i.e., your employees, children, people shopping in pairs, couriers, and potentially even riders from Deliveroo or Uber Eats (depending on your business).

How to work out your conversion rate

Working out your conversion rate sounds trickier than it actually is. All you’ll need is a customer counter (sometimes called a ‘people counter’ or ‘footfall traffic sensor’) and a point-of-sale system that can show you the total number of sales you have made in any given time period. We recommend Lightspeed Retail. However, we’re a tad biassed. Here’s how to do it:

• Gather footfall data for a month.
• Take the total number of sales completed during that month.
• Divide your total sales by the total number of visitors.
• Multiply that number by 100 (to get the percentage).

Example: You have 2,000 visitors to your retail store across the month of June. In that time, you make 400 sales. 400 sales ÷ 2,000 visitors = 0.2. 0.2 x 100 = 20. In this example, your conversion rate would be 20%.

Once you figure out your current conversion rate, you can set yourself a goal and start using the following techniques to achieve it. You should note that if your starting conversion rate is really low (think 15% or lower), you should check your marketing. You may be mis-marketing your store, and bringing in shoppers expecting something completely different than what you offer.

How to increase conversion rate

Improving your conversion rate can be done quite easily by focusing on optimising your store layout, employees processes and behaviour, and providing retail offerings to your customers to have them in a buying frenzy. Here are our favourite ideas.

1. Set up your store for success

Focus on how your store is set up. Where are the displays? How long does the queue usually look? Does the store look packed to the rafters? Or, is it easy to find things?

Unless you are a discount retailer like TK Maxx, you don’t want your store looking like your customers will need to hunt through racks and racks to find things. Instead, set up clean displays that make it easy for shoppers to find unexpected items they just have to have.

Here are some ideas:

• Use your “power wall” wisely. If you’re in the UK, Australia, or New Zealand, use your left wall to make a big statement because customers naturally turn to the left when they walk in. However, if you’re in the US (or a country where people drive on the right-hand side of the road), your power wall is located on the right, since most of your shoppers will have a tendency to turn right when they enter your store.
• Remove excess merchandise from the floor (i.e., only have a few items of each size or product on the floor) to keep the store from looking cluttered.
• Mind your decompression zone. What’s a decompression zone you ask? It’s the first five to fifteen feet inside your front door. Shoppers who are in this part of your store are prone to distractions, which is why most experts agree that retailers should keep the decompression zone simple and uncluttered. Avoid placing too many products or fixtures in this area, as people will likely just walk right by them.

2. Hide your queue

Customers can be easily spooked if they see a lengthy queue. The good news is that there are a number of ways to fix this.

Put your registers in the back. You’ll notice that many stores do this. Or, get rid of the registers altogether and go mobile. By allowing your employees to ring customers anywhere on the floor, you’ll get rid of your queue altogether. Of course, if that doesn’t work for your business, simply adding mPOS systems will help you reduce your queue, at the very least.

Lightspeed Retail allows retailers to process sales anywhere they’d like. Simply download ‘Lightspeed’ onto your iPad or tablet, log-in, and you’re ready to start processing sales wherever your customers are. You can find out more about Lightspeed Retail here.

3. Staff according to traffic

Many stores will schedule their staff according to hours where the most sales are made, rather than the amount of traffic walking through the door. By switching to heavily staffing when there are many customers in the store, your employees will be able to more effectively help everybody, which will likely result in an uptick of sales.

4. Recognise that your employees play a huge role in boosting conversions

This point is part and parcel of the previous point. Not only do you need to be well-staffed, but it’s essential that you train your employees well. In terms of increasing your conversion rate, there are some important things your staff can be taught to do:

Have them greet and engage each and every customer in the store

It’s fairly rare for a shopper to engage an employee out of nowhere when they need assistance, so have your staff establish the relationship.

An easy method to ensure that your staff is greeting everyone is to have someone work the front zone specifically to greet people. You could ask your staff to wait near the front of the store, so they can greet people whilst “just happening” to be folding and tidying up near the front. This method can seem less intrusive than having someone stand at attention staring at people as they walk into your store, which, as we’re sure you’ve experienced before can make you feel uncomfortable, and sometimes pressured.

Train your staff on how to prompt customers to share what they’re looking for

The bulk of this is to ensure that they don’t ask yes or no questions. For instance, “Can I help you find something?” will most often be met with “No.” But, “What are you looking for today?” requires the shopper to engage with the question a bit more, even if the answer is negative.

Put in the effort — and mean it

Once your staff member has identified the customer’s wants/needs, train them to go above and beyond in solving these problems. When your employees are putting in a huge amount of effort, they will:

1. a) Most likely come up with a great solution and
2. b) Convince even iffy shoppers to make a purchase.

And, even if your staff is well-trained at this, you can always incentivise them to help you reach your objectives by offering them a prize for meeting the goals. This normally comes in the form of commission which gives employees a percentage of every purchase they help to make. But, you could also offer prizes, additional annual leave, or recognise their effort, commitment, and brilliance with salary increases or even promotions.

5. Give free samples, nibbles, or drinks.

Whenever a business offers you a free sample, you feel obliged to do something for them. This isn’t just our opinion, but rather that of Dan Ariely, Behavioural Economist at Duke University. Dan says, quite simply, that: “Reciprocity is a very, very strong instinct.” Which means that if you’re in a position to offer free samples to your customers, they recognise that you’re going above and beyond, appreciate their custom, and will feel more motivated to return the favour and buy something from you.

If you’re selling something that can’t be given away as samples, then find something else to offer. Several retailers are now serving drinks to get people to come in and linger.

6. Use social proof

Social proof means showing your customers that other people have bought or want to buy your products. The most obvious example is when an online store offers reviews of a product on its page. You can replicate this in your store as well.

In Amazon’s physical locations, for instance, each printed product tag contains a snippet of a highly starred review from their website, clearly demonstrating that others have bought and loved the product.

7. Create the feeling of scarcity

Scarcity is a well-known psychological trick to increase an item’s perceived value. Scarcity makes something seem special to a customer. There are a number of ways you can make things feel scarce in your store.

• Reduce the amount of merchandise on your floor. Not only does this make the floor feel de-cluttered, but it can make customers think that the item on the floor is the last one in stock.
• Train your staff to let customers know when something really is the last one that you have. It’s an easy sales line that can help them close a deal. Nothing would make a customer jump at buying one of our clothing items faster than knowing it was the only one left *and* it happened to be in their size.
• Run limited-time promotions to provide a temporary boost in your conversion rate and artificial scarcity. By limited-time I mean very short, not several days or a week. A great example is doorbuster sales on Black Friday. These sales typically only last until noon and/or until the products sell out. Running a one-day-only sale will create a sense of urgency for your customers, making them feel like they don’t have much time to get that amazing deal.

8. Get customers to invest time with you

The more time a customer spends in your store, the more likely they are to purchase something. The Wall Street Journal actually says that you can see up to a 40% sales increase from encouraging your customers to hang around.

9. Have a backup plan for products you don’t have in store

Give your customers no excuse not to spend money with you. Have a plan for customers looking for an item that your physical store is out of. You could do this by ensuring that you offer free shipping on any item whenever they’re out of stock in your store. This can discourage customers from walking away from a purchase. The associates can also ring customers for that purchase right from the floor on a mobile device so that the customer experiences minimal frustration. Have everything emailed over to them with their confirmation purchase, receipt, and estimated delivery date for the item in question.

10. Offer flexible payment options

Sometimes, a limited budget is the only thing keeping a customer from purchasing. If this is the case, consider being more flexible with how you accept payments. For example, you offer instalment options.

If you’d like to get paid upfront (and who doesn’t) then offer a “buy now pay later” option through a solution like Klarna. Klarna enables customers to pay for their purchases in instalments. When customers purchase goods with Klarna you receive payment for the items upfront while your customers pay in three instalments over the course of 30 days. It’s interest-free and when paid on time there are no extra costs for your customers.