Retailers were able to make progress in the first half of 2015 despite the continuing decline in customer traffic in stores.
In a report to be released today, Euclid Analytics, working off data generated by hundreds of stores included in its client base, said overall traffic in brick-and-mortar stores fell 0.7 percent during the first six months of the year, a continuation of a years-long downward trend.
However, even with the decline in footfall, stores were able to register improvements in storefront conversion, the number of shoppers who enter a store; visit duration, the number of minutes a shopper spends in a store, and bounce rate, the percentage of shoppers who leave a store within five minutes of entering.
Storefront conversion improved to 9 percent from 8.5 percent as “retailers relied heavily on deep discounts to attract shoppers during the cold weather months.” Utilizing consumers’ attachment to smart devices, stores were able to draw them out of their homes — or at least to their e- and m-commerce sites — with enticing offers that overcame the obstacles posed by Mother Nature.
The bounce rate in the first half dropped to 7.2 percent from 10.1 percent in the same period last year. In June, it hit a new low of 6.5 percent as retailers deployed greeters and engaged shoppers through smart devices to solidify their relationships with consumers.
Accordingly, visit duration improved at a double-digit rate for the retailers, growing 17.4 percent to 27.7 minutes per visit from 23.6 minutes in last year’s half.
Stores are showing their ability to overcome lower levels of traffic at stores and malls, but they’ve yet to solve some of the challenges associated with shopper loyalty, which showed signs of deterioration in the first half. The percentage of shoppers who returned to a store within 30 days of last visiting – known as the active repeat rate – declined to 11.7 percent of the sample from 12.8 percent in the same period last year.
“Deep discounts seemed to work well at attracting new shoppers, but weren’t as effective at luring customers back into the store,” said Randy Brasche, Euclid’s vice president of marketing. “This trend is demonstrated through an uneven first half and a lackluster finish in June.”
Marking the first full month of spring, April was the only month of the year when traffic grew (increasing 7.6 percent), and the month in which storefront conversion also hit a high for 2015 of 9.5 percent.
According to the U.S. Commerce Department, retail sales declined 0.3 percent in June, when the bounce rate hit its record high.
Euclid believes that many of the tactics used to boost sales in the short-term can be employed for long-term benefits — such as loyalty. “Retailers have made strong tactical adjustments, often with promotions to overcome a lack of traffic, but they need and they’re starting to take a more strategic view as they look to build not only sales but loyalty. If they want long-term survival, they’ll need to think about more than simply making their sales goals for a single month,” Brasche said.
Brasche said while online sales continue to grow at a far faster space than those made in stores — up 14.3 percent in the first quarter of 2015 — 94 percent of transactions take place in stores (according to research from eMarketer), and bringing the two forms of commerce together serves both long- and short-term objectives. An MIT study showed that 80 percent of shoppers check price online before buying in a store.
To build sales and loyalty, San Francisco-based Euclid suggests offering shoppers WiFi, stationing greeters at the entrances to stores to help shoppers find what they’re looking for, “arming” sales associates with iPads to expedite merchandise searches, offering iPads in fitting rooms to help consumers seek out merchandise and simplifying check-out procedures with the use of smart technology.
Further improvement is expected as the retail industry moves into the second half, even with the National Retail Federation’s recent reduction in its expectations for full-year sales. In the second half, Euclid expects a single-digit decline in traffic, relatively flat storefront conversions, modest year-on-year growth in duration, a modest year-on-year decline in bounce rate and a “relatively flat” repeat rate.
“Retailers are heading in the right direction,” Brasche concluded.