The following article written by ForeSee VP and Retail Practice Leader Dan Chester was first published on RetailCustomerExperience.com.
With retail and mall traffic down, it’s more important than ever to improve conversion metrics, but find it difficult to understand why people visit a store without buying. These “store nonpurchasers” (SNPs) represent a huge chunk of traffic to a store — accounting for up to 50 percent of visitors, according to recent ForeSee research.
As one specialty store leader stated: “If we could close the store non-purchaser gap by even 1 to 2 percent, it could result in tens of millions of additional revenue every year.” So, what’s the answer? How do you discover why a purchase wasn’t made during a visit to your store?
Understanding customer Intentions
The first step is understanding the difference between two types of non-purchasers: customers who go in-store intending to purchase merchandise and customers who don’t. There are a wide variety of reasons why a customer intending to purchase something didn’t follow through, including items not in stock, unable to find an item, difficulty locating an associate, extremely long checkout lines, etc. These customers represent lost sales because they wanted to purchase merchandise in-store but couldn’t.
And then there’s the sort of shopper who visits a store without intending to purchase. Traditionally, the assumption would be that these customers aren’t interested in spending money with that retailer. But that would be a very uninformed assumption, or almost a guess. These customers may only be visiting a physical store for research prior to making a decision to purchase something using another channel (aka showrooming), like a store’s website or mobile app.
If retailers want to find what we call “true conversion” rates, they must first distinguish between these two types of SNPs, otherwise they risk artificially deflating conversion numbers and wasting money on initiatives that are ineffective…
Read Dan’s entire article via RetailCustomerExperience.com: Solving the mystery of the non-buying consumerCategories: Retail