Your Business: Boost your conversion rate
Focus on Retail: Leading change management consultant Alan O’Neill has advised top Irish andinternational retailers on how to enhance their businesses. In this series he explains his formula: footfall x conversion x average transaction value = sales. This week he explores how to boost conversion rates and turn browsers into spenders
Intel sponsors an annual conference in Lisbon for technology retailers from across Europe. I was invited to speak at one a couple of years ago on the changing customer and disruption in retail. As part of my research in advance, I mystery-shopped several technology retailers across Europe. I was surprised that for such a sophisticated sector with deep pockets, their professionalism in 'converting' browsers to spenders needed much improvement.
As I mentioned last week, online retailing is indeed a great threat to traditional retail but I am firmly convinced that 'bricks and mortar' retailers can compete. We hear much about customers researching before they enter a store. The great piece of news here is they do indeed go into bricks and mortar stores. Retailers can maximise that opportunity to romance the customer into buying in-store rather than on-line.
Last week, I shared the fundamental sales levers for all retailers that are locked in this simple formula.
Retail Sales Formula: F x C x A = S
'Footfall' (the number of customers entering the store) multiplied by 'conversion' (the percentage of those that actually buy rather than just browse) multiplied by 'average transaction value (ATV)', equals sales. This formula gives a retailer pointers for where to focus their efforts. Dare I ask, is footfall really down? Or do retailers actually mean that they're not 'converting' quite as many? Either way, retailers have two more factors to focus on with 'conversion' and 'ATV'. For example, if footfall drops, it may be possible to still achieve your targets by putting even more focus on 'conversion' and 'average transaction value'. Selling is after all, a numbers game.
When I talk to independent retailers about converting browsers to spenders, many express concern that it's 'pushy'. Let me deal with this immediately. I hate pushy selling. In fact if I get even a whiff of pushy selling in my own shopping trips, I get defensive. Last week I offered some ideas to drive footfall. This week I'll share some tips - the three Cs - on how to convert more of those browsers into spenders in a non-pushy way.
Your People are your Greatest Asset for Converting Browsers to Spenders
One of the biggest challenges for retailers the world over is to get their salespeople to sell and not just serve.
As I mentioned earlier, the biggest disappointment for me when I mystery-shopped the tech retailers was how the sales people interacted with me. Enabling and empowering salespeople has to be the single biggest differentiator from online.
1 Connect: On entering the store, customers should be made to feel welcome. Do that by smiling, making eye-contact with every single one and saying hello. This is not being pushy. This is what you'd do if a friend came into your home. You can still allow the customer to browse at their own pace and then return to them when they seem to be paying more attention to a particular product. Do not say 'can I help you?' - because you'll deservedly get a 'no' almost every time and if you engage again after that 'no', well that's being pushy.
2 Consult: When the customer is clearly ready to be approached, go forward and then ask how you can help. The best salespeople are those that ask the right questions. When I hear of supposed great salespeople that can 'sell coal to Newcastle' I get very wary. I immediately think of Arthur Daly, the fast-talking pushy salesman. Using open-ended questions, take time to establish your customer's needs. This helps to build personal trust and rapport in a way that can't happen online.
Then present options to the customer that match their needs, focusing on the benefits of your options. In other words, what will your product do for your customer? For example, Velcro straps on a child's shoe is a feature. But the fact that the children can close their shoes on their own, is the benefit. And the language of benefits is more enticing than features.
If you get objections about colour, size, price or whatever, remember an objection is not a rejection. The customer is letting you know that something in your proposal is not quite right. They aren't necessarily saying they won't buy anything. Ask them what in particular they are not happy with and then show an alternative.
3 Conclude: When the customers indicate that they are happy with your proposal, don't be shy about 'closing' the sale. Take time to thank and reassure the customers that they have made the right choice and tell them about your after-sales service. Wrap or bag the purchase with care and wish the customer well.
Don't forget… Firstly, as online retailers continue to improve, they recognise that they miss the human interaction that bricks and mortar retailers can give. They try to emulate that with pop-up screens to engage in webchat, or to get customers to call them. Bricks and mortar retailers have a distinct advantage to make the customer's experience a personable and memorable one. But customers are more savvy and well-researched, so product knowledge is a greater priority than ever before for retail salespeople. Their confidence and ability to convert will be shattered if the customer seems to know more than they do about their product.
Secondly, research thankfully shows that low prices are not the only buying motives. Retailers should not underestimate their ability to sell against a price disadvantage. While researching for this series of articles, I interviewed many independent retailers. I believe that professional sales training is a missed opportunity that as the market changes, has to become a top priority.
What seems like common-sense in the tips above, is not common practice I'm afraid. Retailers, prioritise your own people and give them the tools they need to compete effectively.
Case Study: Graham Shoes
'It’s important they’re properly measured, this gives us an edge'
Sarah Jessica Parker in Sex and the City and I have at least one thing in common. We both love Jimmy Choo Shoes. While her passion is for wearing them, mine is for helping the company to sell them. Jimmy Choo is a luxury brand where price is obviously not the main driver of sales. The styling, the fit and the brand appeal makes it an aspirational brand across all demographics.
Yet even with an amazing product range, the company recognises that product alone is not enough of a differentiator. I saw this first-hand all across Europe, where some stores outperformed others.
Of course there are lots of factors that influence sales but in Jimmy Choo’s case, I know it depended on the local general manager and how they went about ‘converting’ visitors to spenders.
Graham Shoes is a multi-brand shoe retailer with stores in Dublin, Carlow, Kilkenny and Clonmel. Founded by Tom Graham in 1970, it is now run by brothers Steve and Gary Graham.
The business has come a long way since the early days. In order to protect Irish shoe manufacturers back then, a licence was needed to import Italian shoes into Ireland.
Over the years, the company has diversified its offering to include shoes for women, men and children. It sees itself as a mid-market retailer, with women’s shoes priced between €50-70, ankle boots from €60-100 and boots from €80-120.
While online is obviously a big disruption for the footwear industry, the other challenge is that we have all become more casual in how we dress. Sportswear is now a huge category and that has enabled international branded sports retailers to compete with traditional shoe stores.
Even schools have relaxed their rules and now allow black trainers to be worn in school.
Nevertheless, Graham’s Shoes is punching above its weight and is holding its own in each store it operates. Childrens is now a really important category in which the company has developed a niche. Customers travel from far and wide to Graham’s destination stores because of the instore experience.
“As children’s feet change so quickly, it’s obviously important that they are properly measured and fitted with shoes that are comfortable and appropriate. That gives us an edge compared to online retailers.
“All of our sales people have been trained in product knowledge and they give honest advice to every customer,” said Steve.
That gives them a high percentage conversion rate in the children’s category.
Other Back to Basic Retail Principles, to Aid Conversion
When a customer enters your store, they form opinions very quickly based on first reactions. A physical retailer has much more potential to influence a customer by tapping into all of the senses.
For example, in Graham’s the children can try on and walk in the shoes to check for fit and comfort.
Grocery retailers love to bake fresh bread to create an ambience just inside the front door. Mac Cosmetics always have loud music pumping to create a vibe, and Neal’s Yard Cheese shop in London offers every single customer a tasting.
Focusing on visual marketing in particular, great retailers know the importance of:
1 Housekeeping standards
Basic housekeeping standards are a priority for every retailer. A tidy and clean store is essential regardless of whether you’re mainstream or a luxury brand.
2 Overall floor plan and layout
Thinking of the customer’s journey through your store, consider the optimum layout and what product ranges sit most sensibly adjacent to others. Should your products be displayed in categories or in brands? Try to link-sell by accessorising and showing related products together, such as a matching handbag and shoes.
Uncluttered displays that are allowed to ‘breathe’, are visually pleasing while telling a story, will inspire the customer to buy.
4 Basic principles
Signage, ticketing, lighting, music are all key elements of the basic principles of in-store sensory marketing.
In conversation with Steve, he told me that Graham’s is a friendly place to work and the teams work really well together. “We see that giving an in-store customer experience is our main differentiator in a world that is changing every day” he said. “But I do recognise that we retailers need to up our game. There is probably more we can do to refresh and enhance the selling skills of our people in order to convert more browsers to spenders. I intend to do that.”
Alan O’Neill is managing director of Kara Change Management, specialists in strategy, culture and people development. Go tokara.ie if you’d like help with your business. Business advice questions for Alan can be sent to firstname.lastname@example.org
Sean Gallagher is on leave.
In association with RGON, specialists in Employee Engagement Surveys www.rgon.ie
Sunday Indo Business