LP Magazine

SEP-OCT 2017

LP magazine publishes articles for loss prevention, asset protection, and retail professionals covering shrinkage, investigations, shoplifting, internal theft, fraud, technology, best practices, and career development.

Issue link: http://digital.lpportal.com/i/874445

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Page 51 of 79

CONVERSION RATE OPTIMIZATION L oss prevention professionals and the LP industry in general have and continue to do an admirable job of bringing new analytic capabilities to their organizations. As I described in my article "Using Loss Prevention Technology to Support Traffic Counting and Conversion" published in January-February 2013, I have long believed that leveraging LP infrastructure for store traffic counting can be both capital efficient and operationally practical. However, as I am certain many LP professionals who have implemented a store traffic counting solution have discovered, just because you have a system to collect traffic data doesn't mean it gets used or the insights applied in a way that leads to a measurable improvement in business results. While I'm not suggesting that LP should be responsible for delivering results—clearly this is the domain of store operations—I do believe that LP can play an important role in bringing new ideas to leaders of the teams that do. Conversion rate optimization is one of these ideas. Store Traffic Is a Precious, Nonrenewable Resource While declining store traffic continues to dominate the headlines and remains the reason most frequently cited for lackluster store performance, it's only part of the story. If it's true that store traffic has experienced a permanent and intractable decline, then what are brick-and-mortar retailers to do? In the aftermath of the dot-com bubble in the early 2000s, online marketers realized they couldn't merely focus on generating website traffic; rather they needed to focus on conversion—getting more visitors to buy. The same is true in brick-and-mortar retailing. As Jeff Gennette, CEO of Macy's, stated in a Bloomberg interview, "The key will be for us to convert—we'll get the traffic." Today many brick-and-mortar retailers track store traffic and measure conversion, but the question is what they actually do to optimize their in-store conversion rates. The answer for many is not much. In the online world, conversion rate optimization (CRO) has become an industry onto itself, spawning a global community of consultants and service providers, formal methodologies, and over a hundred books dedicated to the topic of Amazon alone. There is only one book on brick-and-mortar conversion listed on Amazon. Given the difficult business conditions so many brick-and-mortar retailers are facing, it's baffling that CRO hasn't become more of a focus if not an obsession. Many factors may be preventing CRO from taking hold with brick-and-mortar retailers, but just like online marketers discovered after the dot-com bust, focusing on conversion can help them not only survive but even thrive despite traffic declines. Tracking Conversion versus Optimizing Conversion Most major tier-one retailers today track traffic and conversion rates in all their stores, so the basic data needed to conduct CRO already exists. For the retailers that misguidedly use sales transaction counts as a proxy for traffic—sorry. Beyond being a grossly inaccurate measure for store traffic, they don't even possess the basic data needed to calculate conversion rates, so optimization is a non-starter. But just because a retailer has the data, doesn't mean they're doing much with it or as much as they could be, and that's where CRO comes in. CRO is defined as a system for increasing the percentage of visitors that convert into customers. The key word in this definition is "system." In the online world, conversion rates are influenced by a website's page layout, colors, buttons, call-to-action, and checkout, among other factors. All these variables contribute to conversion, and CRO is the systematic process of tweaking and adjusting these factors in a way that leads to measurable and sustained improvements in conversion rate. In physical stores, many variables impact conversion rates, including store layout, inventory levels, merchandising mix, promotional activity, and most importantly, the front-line associates and Many factors may be preventing CRO from taking hold with brick-and-mortar retailers, but just like online marketers discovered after the dot-com bust, focusing on conversion can help them not only survive but even thrive despite traffic declines. INTERVIEW WITH PUBLIX'S DENNIS WAMSLEY LULULEMON'S CULTURE OF HONESTY AND INTEGRITY MOBILITY AND CLOUD COMPUTING LPPORTAL.COM | V12.1 JANUARY-FEBRUARY 2013 TRAFFIC COUNTING AND CONVERSION RATE WHAT LP PROFESSIONALS NEED TO KNOW AND WHY MAGAZINE LOSS PREVENTION THE VOICE OF LOSS PREVENTION 52 SEPTEMBER-OCTOBER 2017 | LOSSPREVENTIONMEDIA.COM

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