Retailers are missing out on opportunities to build market share because they’re failing to convert visitors into buyers, according to a holiday 2010 study release by ICC/Decision Services.
David Rich, president and chief executive officer of ICC, said, “Retailers are still leaving millions on the table.”
“Generally in apparel, you’re lucky if you have a 20 percent conversion rate,” Rich said. “That means 80 percent of the shoppers [who entered the store] didn’t buy. The marketing department did its job. They got people into the store. But then, what happens afterward?”
In many cases, business is lost because consumers weren’t “upsold” on purchasing opportunities.
Although e-commerce is growing rapidly and needs to be addressed by stores, Rich pointed out that “92 percent of sales are still done in the store.”
In this year’s survey, conducted in October and November, the specialty store category that includes Sephora and Bath & Body Works ranked first in a wide range of areas including customer service and other categories, followed by the electronics and apparel retail sectors. Office big-box retailers, home improvementand sporting goods ranked ahead of the department store category.
Off-price retailers, such as Burlington Coat Factory, T.J. Maxx and Ross Stores, ranked last, behind toy retailers, said Rich.
ICC took its own notes and polled consumers on matters such as how store associates greet customers, provide information about promotions and make suggestions about multiple-purchase ideas.
In the department store category, Nordstrom ranked first, with J.C. Penney and Macy’s essentially head to head, followed by Sears and Kohl’s.
In the apparel category, Charlotte Russe ranked first, with Burberry a close second. Other retailers such as Coldwater Creek, Victoria’s Secret, Lane Bryant, Aéropostale and American Eagle did better than J. Crew, which in turn ranked higher than American Apparel and Forever 21.
Some retailers, such as Coach, Talbots, L.L. Bean and Lands’ End, were not included in the results because they are ICC clients.
The survey of 54 brick-and-mortar stores included more than 30 visits at each chain across the country. Over 1,600 store visits were conducted over the last two months and 10,000 data points collected.
“The stores are great at saying hello and thank you. If store associates do a little more suggestive selling, even a 10-point improvement for one retailer could mean millions of dollars in sales,” Rich concluded, suggesting the horse race between J.C. Penney and Macy’s could have one pulling ahead of the other in market share just by having store associates do more on suggestive selling to raise the conversion rate.
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