Welcome to the newest post in our blog series, Darren’s Great Ideas! for Independent Operators.
What Is Your Conversion Rate?
So, what is your conversion rate? At the National Retail Federation event in New York City in 2003 me and my mentor attempted to quickly figure out what type of currency the others around the round table discussion were going to use for their conversion from American dollars and why converting American sales dollars into a different currency was so darn important. Well, as goofy truckstop operators trying to learn fundamental retail practices, we soon discovered conversion rates in this conversation was about converting browsing customers into paying customers. In fact a recent article by Marianne Wilson discussed the importance of focusing on your conversion rates stating, “traditional wisdom says that the quickest, surest and most cost-effective way to increase store sales is to improve each stores conversion rates."
Some operators within our industry may have been speaking about this for some time. I know I have for over a decade. I also know it is very difficult to apply this concept and the appropriate traffic counting equipment to truckstop & travel center retail operations, but it remains a significant factor for retailers in general. Knowing when customers are in the facilities and where they are within the facility, is key information and still impacts sales growth and opportunities.
“Retailers often focus on increasing the volume of shoppers they bring into their stores, when they should be paying more attention to the results obtained from shoppers already in the store,” explained Michael Bunyar of SMS Store Traffic. “If you currently sell 20% of your traffic, increasing the conversion rate by 1% can increase sales by 5%."
Previously I've written about creating a suggestive sell program and have identified the power of increasing average ticket. For exampe is you sell an extra large candy bar at your locations, at the example rate of $1.59, to every 4th customer in an operation that averages 900 customers a day would result in $130,578 in additional sales annually! That is serious sales from a single SKU.
I still don’t think sophisticated systems are required in certain environments to determine this information and deploy resources effectively to impact sales and service. Engage customers fueling on the gasoline and or diesel lanes by promoting food items inside or really significant promotional opportunities in other categories. Ensure every sandwich sold includes a fountain drink and a bag of chips, every meal in the restaurant has desert, every pack of cigs sold includes a lighter and every cup of coffee has a pastry.
Customers who enter your facility just for the restrooms should be keenly aware of the retail opportunities within your operation. While this is certainly easier said than done, it is worth the effort. So what is your conversion rate?
/// Read more Darren's Great Ideas for Independent Operators posts here.
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