Reimagining Retail’s 2024 KPIs: A Data-Driven Approach for Success

As the retail industry evolves, strategies for success have dramatically shifted. Gone are the days of static store layouts, now replaced by a dynamic, data-driven approach that requires ongoing iteration. For retailers to thrive in 2024, a refocusing of key performance indicators (KPIs) is essential. Central to this new approach is understanding and maximizing foot traffic data through the entire path-to-purchase and optimizing fitting room usage to boost sales.

Leveraging Surrounding Store Traffic for Retail Success

In today’s crowded retail landscape, understanding and maximizing the competitive share of surrounding store traffic is crucial. By analyzing foot traffic volume compared to neighboring stores, retailers can benchmark against nearby competitors’ traffic, providing valuable insights into a store's performance and helping retailers understand their relative position in the market. This dynamic approach allows for quick adaptation to changing consumer behaviors, whether it involves adjusting operating hours, introducing new products, or adopting new technologies. Ultimately, this leads to an improved customer experience.

Test-and-Learn Experimentation With Shopfront Conversion

High-performing retailers are now applying a test-and-learn model to their in-store experiences, a strategy long used in online retail. This involves continuous fine-tuning and A/B testing of the physical space. By measuring surrounding store and passer-by traffic, retailers can understand what attracts shoppers to their stores, a measurement akin to online impressions.

This data allows retailers to calculate a shopfront conversion rate. Using this metric, they can gauge the effectiveness of their window displays and make quick improvements based on the insights they glean.

This nimble and adaptive approach can lead to small percentage improvements in conversion rates which ultimately drive substantial impacts on the bottom line.

The Power of Fitting Room Conversion

Many retailers look at fitting rooms merely as a space for shoppers to try before they buy. However, these locations represent a strategic opportunity for increasing sales conversion. High-performing retailers that understand that people who try on an item in a fitting room are seven times more likely to purchase and have a 25 percent larger basket size can unlock a realm of possibilities to boost sales and enhance customer satisfaction.

For instance, a swimwear retailer saw a 15 percent increase in sales conversion rate and a 14 percent rise in average transaction value by leveraging data from fitting room sensors, which enabled it to understand its fitting room capacity and utilization throughout the day, and particularly in busy periods, in a way that had previously been unavailable to the retailer. This was done without compromising the privacy of its customers

Retailers can significantly boost sales by training staff on the importance of the fitting room conversion rate and motivating them to direct shoppers to these areas.

The changing retail landscape demands that we reimagine our KPIs in 2024. Retailers shouldn't lose sight of their previous performance indicators, but by leveraging data-driven insights from foot traffic analysis to inform changes to their marketing promotions, window and store layouts, and fitting room staffing and usage, retailers can not only survive but thrive in the evolving retail environment. A revolution in retail foot traffic is here, and those that embrace change can take market share in an increasingly competitive environment.

Tom Gleeson is the CEO of Kepler Analytics, the only traffic counting solution that enables retailers to accurately measure storefront and fitting room conversion rates.