How do you track shoppers?

Our technology uses a digital video counter with embedded chip-based intelligence. A small device is mounted over a retailer's doorway, and counting zones are set up to measure passes into and out of a store. Shoppers are only viewed from overhead, so there's no individual identification.

Counts are transmitted back to a host computer at ShopperTrak each night. They are verified for consistency and completeness, then returned to retailers as data extracts or as part of a larger Web-based performance reporting system.

Why is tracking shoppers important?

By measuring incoming traffic and comparing it to daily transactions, a retailer gets a picture of the conversion rate for each location. There are a lot of reasons why shoppers don't convert — ranging from out-of-stocks to inadequate staffing — but a retailer may not recognize there's a problem if the total pool of shoppers isn't examined. Just looking at POS transactions gives managers an after-the-fact metric, but doesn't tell them how much more business they might have had.

The problem of inadequate staffing is also addressed. By looking at peak traffic times, managers know when to schedule floor help to maximize their chances for conversions.

Traffic counts also tell retailers how effectively their marketing and advertising dollars are being spent for traffic-building programs, and can be used with the ShopperTrak Retail Traffic Index to show a chain how its incoming traffic compares to its retail segment and to the region in which it's located.

How has traffic measurement evolved?

With a traffic-counting mentality, retailers recognize that every shopper is an opportunity. As they begin to track and benchmark conversion rates on a store-by-store basis, they can see patterns, highlight and share success stories, provide training where needed and develop action plans to achieve higher rates. Traffic data is very actionable — unlike transaction data, which only tells a retailer what happened after a shopper made up their mind. The true opportunities for performance improvement occur before the shopper reaches the cash register.

The best traffic measurement programs draw together resources from store operations, finance, human resources, information technology and marketing, all working together for the common goal of building a retailer's revenue and profits.

How does this help retailers assure the highest possible ROI?

Retailers are under tremendous pressure to improve same-store sales. And they invest heavily in bringing traffic into their stores. It's only logical that they'd want to know the outcomes of their investments — and have the ability to formulate action plans that get them to their revenue goals.

Traffic counting is the “missing link” in retail performance metrics, in that it defines both results (i.e. successful traffic-building programs) and opportunity (i.e. how high is up with my sales-building activities?).

What lessons have you learned?

One is that traffic counts are a leading indicator of sales performance; not just today's performance, but future results as well. Over time we've seen that if traffic starts to fall, sales will almost inevitably fall within the next 12 months in spite of retailers' attempts to prop them up with promotions.

Another key lesson is that traffic patterns vary dramatically from location to location, even if POS transaction levels appear to be the same.

Retail Traffic recently conducted an online Q & A with Bill Martin, co-founder of ShopperTrak, which provides shopper traffic counting information, technology and decision support software for retailers.