Shopper yield is emerging as the metric of the moment.
The measurement, which calculates a store’s dollar volume based on the number of shoppers who walk through the door, is gaining traction among retailers, according to a recent survey by RetailNext, the San Jose, Calif.-based firm that collects and analyzes data at brick-and-mortar stores.
When asked which two metrics are most important to the measurement of retail performance, 89 percent selected conversion, the percentage of customers walking into a store who actually buy, with shopper yield getting the second-highest response, 53 percent.
By comparison, average transaction value pulled in less than half the shopper yield response, 26 percent; entrance traffic drew an identical 26 percent, and sales per square foot, once considered the gold standard, garnered a positive response from just 5 percent of those participating.
While conversion tells retailers how many shoppers become buyers, and average transaction value how much those buyers actually spend, shopper yield combines the two metrics by determining how much the average person walking into a store is spending.
“We’ve been focusing on this figure since 2009, and we saw this survey as something of a bellwether moment,” said Tim Callan, chief marketing officer of RetailNext. “It’s a very sturdy measure of store productivity, something that stores can really work on. If your sales per square foot are disappointing, what are your options? Make your store smaller?”
Callan wasn’t surprised by the strong acceptance of conversion but acknowledged he didn’t expect yield to perform as strongly as it did or sales per square foot to register so poorly.
The sample was also asked to compare the use of in-store data collection and analysis with its status from two years ago. None of the attendees reported a decline, while 60 percent said it had increased significantly, 23 percent that it had increased somewhat and 17 percent that it had stayed about the same.
The survey was conducted during RetailNext’s recent annual executive forum, which brought together 100 executives, most in retail and the remainder in affiliated businesses ranging from venture capital to technology.
Mirroring the methodology employed in measuring the retail metrics, executives were asked which two stakeholders within the retail management structure were most affected and involved in in-store data collection. Store operations personnel led the pack at 81 percent, followed by marketing at 76 percent, business intelligence or customer insight staff at 43 percent and information technology at 10 percent. Finance personnel didn’t receive any affirmative responses, although Callan conceded the response levels might have reflected the composition of the seminar audience.