Retail Conversions: The Last Great Metric?
Thursday, February 1, 2018

Categories: Thought Leadership

Retail Conversions – the Last Great Metric? Conversion: The Last Great Retail Metric? Book

Of the many books I read recently, there aren’t many that I find hit an important mark in retail, or that provide tactically useful information on which to take actions and make decisions. Not so with Mark Ryski’s book “Conversion: The Last Great Retail Metric”. Ryski’s book is a solid read at 366 pages, which gives him room to get into the detailed depths of metrics critical to all sales organizations. What I specifically liked most is the fact that Ryski provides ample examples of the metrics that are important. With deep, practical and easily understood explanations of why they are important. This is without a doubt the best, and most practically useful book for both store managers and for executives in retail.

Two key topics Ryski addresses, are how foot traffic and retail conversions are critical aspects that need to be measured. Simply, if you don’t monitor and improve on these metrics, then it is hard to succeed in this hyper-competitive landscape.

Past the Dated References

Admittedly, Conversion was published in 2011. Yet it feels like one of the publications that should have received considerably more attention, and generated much more discussion. It includes a number of cases in the early portion of the book, from retailers that were once great companies, and have stumbled over the years. Examples are HMV, Radio Shack, and Blacks Photography. However, don’t be dissuaded. The core and tactically relevant aspects of the book are in the pages ahead. These observations and analyses are what drives in-store sales, and are perhaps more relevant today than they ever have been. The latter three quarters of the book are what truly counts.

Driving In-store Sales

Ryski highlights and returns to one primary equation that all retailers need to monitor and come to deeply understand. This is the simple premise that:

 Traffic X Conversion X Average Sale = Sales                            

Conversion, highlights the importance of measuring and monitoring each of these three areas. It also delves into which of the three levers for sales are important to monitor closely, and can have the most likely impact on overall sales growth for any given store.

 

Where does fashion retail stand in omnichannel? Find out in 2-page OMS Brief

 

Pitfalls and Graphs

From Ryski’s many years in retail, he articulates a number of classic blunders in which retail management often engage. This is a great balance to the message. Sometimes it is easy to just presume you can deduce traffic from POS recorded sales, for example. However, this means you lose a crucial part of understanding what is driving the sales performance of a particular location.

As a visual learner, I especially appreciated the real-world graphs included in each example. It helps tremendously to better understand how an executive could arrive at some incorrect conclusions based on certain views of the data, and why other perspectives are key.

Who is This Book for? Traffic Rate and Conversion Rate Graph

Conversion is an important book, that every manager and supervisor in retail needs to read. However, it becomes a truly powerful paradigm shifter for the senior executives, VP’s, Directors, and District or Region leaders focused on store sales and store performance. I don’t want to exclude store managers on this one though. Knowing about traffic details, patterns, and how it affects conversion is critical to the in-store leader’s ability to drive positive outcomes.  However, Conversion takes the perspective of an executive reviewing the performance data from a series of locations, in an effort to better understand and improve sales across different locations.

How Does This Play Into Omni-channel Retailing?

From an omni-channel perspective Conversion brings in a crucial piece of understanding key elements of the buyer’s journey. An order management system makes omni-channel possible. It provides real-time in-store inventory details down to the store level. This increases a customer’s likelihood of either purchasing online for delivery, or for an in-store pickup. As noted many times, 58% of in-store pickups result in additional purchases. Understanding this, the effect of growing in-store traffic, and the importance of testing upsell and conversion techniques – will have a material impact on your retail sales. Conversion helps us understand how to truly capitalize on the growth in in-store traffic resulting from the effects of offering omni-channel services like in-store pickup, and in-store returns.

Last Words

Despite a few dated retailer cases articulated early in Conversion, the book, analytics, classic executive fumbles, and suggestions for how to improve sales – are all outstanding. This is not only an intensely relevant topic to all retail managers, but it also provides immediate, tactically useful techniques for observing your own in-store data, with steps to improving your retail conversions. If you are in retail management – buy the book and read it to find out how you can improve your in-store operations. If you are a retail executive – then run out to buy this book.

 

Author:

Charles Dimov - Director Marketing OrderDynamicsCharles Dimov is Director of Marketing at OrderDynamics. Charles has 21+ years experience in Marketing, Sales and Management across various IT and Technology businesses. Previous roles include Chief of Staff, Director Product Marketing, and Director Sales. Charles has held roles in brand name firms like IBM, Ericsson, HP, ADP, and OrderDynamics.

 

 

 

Related: 

Retail Planning: How to Prioritize?

Schedule a Demo

Clicks to Bricks: Retailers expand into physical stores