This article is provided by BRC Associate Member Ipsos Retail Performance.
Peter Luff, managing director at Ipsos Retail Performance, looks at how footfall data can help retailers forecast demand and make the most of their physical spaces, especially when trading conditions are challenging.
We may not have to wait long to test the theory that, in times of economic trouble, sales of affordable luxuries like cosmetics surge while big ticket purchases drop (the ‘lipstick effect’).
Living costs are rising at their fastest rate in 30 years, with inflationary pressures of the past year being compounded by the war in Ukraine. Squeezed households are already struggling to pay for the essentials – food, fuel and energy – so what will this mean for the discretionary spending retailers and leisure operators depend on?
Well, for the moment at least, there seems to be little cause for alarm. The results from Ipsos’ Global Consumer Confidence Index, a monthly survey of more than 17,500 adults under the age of 75, found consumer confidence across the UK to remain strong – virtually unchanged when compared to the previous month, standing at 51.8.
But fears of stagflation are mounting and after the initial pent-up demand after lockdown, businesses in every sector, including retail, are bracing themselves for a tough road ahead.
They’ll need to be attuned to subtle changes in shopper behaviour and, instead of relying on assumptions and theories like the lipstick effect, look at the data and be ready to adapt.
Look for clues in your footfall
Understanding footfall is essential for any retailer that operates a physical store – just as it’s critical to track sales, revenue and margins.
Today’s footfall counting systems not only record the number of people entering and leaving the store on an hourly, daily, weekly and year-on-year basis, they also monitor them as they move around the store.
So, while it’s useful to know the overall volumes, being able to understand dwell times and the areas people visit most gives you a much better idea of shopper behaviour and how it might be changing. You can also exclude staff from your count, by asking them to wear a discreet tag or lanyard, allowing you to improve the quality of your analysis and focus on customers.
An uncertain economic climate may mean potential customers are walking out empty-handed because they cannot find products at the right price point – which presents an opportunity to group your most affordable ones together and promote them. Similarly, you might choose to stock more of these lines if your footfall and sales data indicates high demand.
Make it personal
Data-driven personalisation has become synonymous with online retail – but let’s not forget that bricks-and-mortar retailers have been delivering personalised experiences long before the advent of e-commerce. Occasionally, associates know their regulars by name and what they want to buy when they come in, although this isn’t the norm because it’s difficult to achieve in a high-volume sales environment. The image of a harassed associate at the checkout and an endless queue is hard to shake and not likely to attract people into the store – but continually monitoring your footfall data to optimise your rotas ensures associates are deployed to the right areas to deliver exceptional experiences and drive sales.
The application of AI to shopper footfall data, to calculate the split of customers in terms of gender, dwell time and sentiment, is another way for retailers to deliver the kind of personalised experiences people get online. It allows you to channel your sales and marketing efforts towards those customers who are most likely to convert and achieve better ROI at a time when your own budgets might be stretched.
Become a destination
People remember how brands behaved during the pandemic – both the good and the bad. During difficult times, retailers can become pillars in their communities, providing much-needed services like budget household essentials and treats.
Higher-end stores may not achieve the same volumes of sales, especially when household incomes are tight, but they can still entice people to their store with in-person events – something many people are hungry for after lockdown.
Product launches, beauty treatments, fashion shows, fitness classes and even mini festivals and gigs can open your doors to a wider audience and engage those people who’re most likely to convert.
Over time, these events and values help to build communities of like-minded people and brand equity that goes beyond transactions alone.
By welcoming people to the store, and providing some much-needed escapism, you can put your store at the forefront of their minds and give them a reason to visit and spend, especially as after a crisis subsides.
Creative events will certainly get people talking but you don’t always need to break the mould. Becoming known for being child friendly, or in the case of Wilko, pet friendly, adds value to your service and demonstrates to customers that you understand their needs.
For more information on Ipsos Retail Performance, visit www.ipsos-retailperformance.com.
Peter Luff, managing director at Ipsos Retail Performance
Peter Luff is Managing Director at Ipsos Retail Performance, where he has worked for over a decade to provide the world’s leading retailers with insight into the behavioural patterns of their shoppers, as well as footfall counting and shopper tracking solutions.
Peter is a regular media commentator and conference speaker where he presents and discusses behavioural shopping trends in retail.
Prior to Ipsos Retail Performance, Peter has worked in technology consulting roles servicing a wide range of client industries including national newspapers, film production, oil and gas, manufacturing (automotive & F1) and sciences with experience in 3D immersive technology.