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.

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CONVERSION RATE OPTIMIZATION managers who run the store and serve customers. And herein lies the challenge with CRO for brick-and-mortar retailers—variability. This variability in physical stores not only makes consistently applying conversion improvement initiatives across stores a challenge but also makes measuring results more challenging. Furthermore, new in-store service features like "buy online, pick up in-store" (BOPIS) make calculating and interpreting conversion rates trickier. Think about it. When customers buy online and then pick up their orders in-store, store traffic increases, but conversion rates decrease since the sales transaction was already captured online and therefore not attributed to the traffic count captured when the customer visited the store to pick-up his or her order. As the simple example in the illustration shows, BOPIS activity will generally cause conversion rates to decrease. If we compare the conversion rate performance of two stores, one with and one without a BOPIS program, we can see how conversion rates can be impacted. In store A, where there is no BOPIS program, calculating conversion is straightforward. This store received ten visitors and completed five sales transactions resulting in a 50 percent conversion rate. Store B received twelve visitors and also completed five sales transactions resulting in a 42 percent conversion rate. However, three of the visitors came to pick up their online purchase. Metrics, such as attach rate, can also be tracked to put appropriate attention on fully maximizing all traffic counts to drive overall performance. While it is possible that these three BOPIS visitors may make other purchases while in-store, it's reasonable to calculate conversion based on a traffic count excluding these visits to more fairly represent true in-store conversion performance. Initiatives like BOPIS will impact conversion rates; however, they are not necessarily impediments to undertaking a CRO program. That said, extra care does need to be applied to account for how these initiatives are impacting conversion rates prior to initiating a CRO program. The important point is to be consistent in how you calculate conversion rates and then apply CRO initiatives, measuring performance against relative trends. Testing and Measurement to Prove Results A vital tenant of CRO is testing and more specifically A/B testing. In the online world, this is easily accomplished by setting up two variations of a webpage and then directing an equal amount of traffic to each site. Conversion results of website A are compared to website B, and the winner is declared. But A/B testing is much more difficult for brick-and-mortar retailers since, unlike websites, every store is unique. Store layouts, inventory levels, geographic location (including proximity 53 LP MAGAZINE | SEPTEMBER-OCTOBER 2017

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