HeadCount Retail Insights Blog

What 'Traffic and Conversion' Tell You That You Don't Already Know

"What will traffic and conversion data tell me I don’t already know?" 

That's a question our team at HeadCount has been hearing for 20 years. Surprisingly, some retailers often don’t believe that counting traffic and measuring customer conversion will tell them anything they don’t already know. 


Nothing could be further from the truth. Without traffic and conversion data, you don't even have the basics to run your stores. 


Think about it. The answer lies in the basic dynamics of retail: 
  • Every day customers visit your stores intending to make a purchase.
  • Your advertising was successful! It got prospects to your store.
  • These prospects wandered the store, looked at products, engaged with one of your sales associates. 
  • They may have even made it all the way to your check-out, but then decided not to buy.
  • The sale is lost. And worse — without traffic data — you will never even know. 
  • Every hour of every day, shoppers visit your stores but leave without making a purchase – despite the fact that they intended or were predisposed to buy.

Over the course of weeks, months and years, these lost prospects add up and represent hundreds of thousands of dollars — if not millions — in lost sales opportunities. 

Without traffic data you won't even know what you lost.

Remember, unconverted shoppers are not captured in your POS data — so no need to look to your till for answers. Unconverted shoppers also rarely fill out your customer service surveys — they just leave and tell their friends and family about their unsuccessful trip to your store. 

Traffic and conversion analytics fundamentally answer two very simple but critical questions.
  1. How many people visit your stores?
  2. What percent of these visitors actually makes a purchase?

Do you find these questions underwhelming?  Are you thinking: "how can knowing the answers to these two simple, innocuous questions possibly make any difference in my business?" 

If you have never tracked traffic and conversion in your stores, you have no idea how profoundly these basic, but truly great, metrics will transform you and your company. Not only will they make a difference, traffic and conversion data will:

  • change the way you measure performance
  • make decisions 
  • run your business

'Sophisticated' and 'important' have somehow come to mean that the data must be incomprehensible and voluminous. That is definitely not how we think about it at HeadCount.

Retailers are awash in data. But that doesn't mean they are awash in useful insights.

Information systems continue to evolve. Faster. Better. AI-driven. The theory is that you will be able to make better decisions, run your businesses better and deliver better performance. But can you? What do you do with all your data? Are you even sure it's the right data? 

We solve that problem for our clients so they can focus on having the right data, that is fast and easy to access, to help guide and validate decisions.  And at the foundation of it all, what you really need to know is how did your stores perform relative to the sales opportunity you had overall, and every hour of every day. 

Can you honestly assess how you and your hundreds of stores are performing against opportunity? At a glance? 

Start with a simple Framework:  

Traffic Defines the Sales Opportunity

Think about it, how often do you ask your teams "How are sales today?”  They can tell you if sales or up or down but they cannot share results relative to the opportunity if they don't have traffic data.

At the most basic level, sales are simply a function of three variables:

  1. the number of prospects who visit your store
  2. the percentage of these visitors who make a purchase and
  3. how much each converted shopper buys 
Prospect Traffic x Conversion Rate % x Average Sale = Sales 
The absolute simplicity of this formula is difficult for some retailers to fully accept.  When we presented this formula to the CEO of a large chain of men’s clothing stores, his reaction was curious: "This stuff is too basic for us, we’re a sophisticated operation, and we have PhDs on staff…this might be fine for a small retailer, but not a company like mine". 
How can performance versus opportunity apply only to small retailers and not 'sophisticated' ones? 

We did end up conducting an Insight Review for this executive and he was blown away by the results. Insights Reviews are a service HeadCount can provide any retailer who already has traffic data. And, it is always amazing to see their surprise at all the actionable insights that come out of a simple review. 

The Sales Conversion Equation makes it straightforward to help executives and store teams understand how to drive sales and the role they can play in doing so. Marketing teams drive traffic through advertising. Store teams drive sales by focusing on conversion, average sale....or both. Executives enable outcomes by ensuring marketing investment, staffing levels, and training are where they need to be. 

Do you know Traffic, Conversion, and Average Sale for your own chain? How about each store? Do you know how it all three of those metrics are changing over time?  Imagine how much better you could help your teams and manage your sales performance if you did know. 

Sales Conversion Equation


"It seems to me that in the over-analyzed world of business today, the simple has been overlooked. Traffic counts and conversion rates are simple measures, and that’s in part what makes them so useful and essential" Mark Ryski
"Insane thinking has caused retailers to lose focus on what’s truly important and what they intuitively know – driving prospects into the store and then serving them in a way that translates into a sale is what retailing is all about". Mark Ryski

To improve your sales, you need to understand what lever to pull. Traffic and customer conversion help you do that.


Excerpted from 'Conversion: The Last Great Retail Metric', written by Mark Ryski, Founder & CEO of HeadCount
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