People Counter

The correlation between bounce rates and retail store performance from our CEO, Tony Loxton

Written by Tony Loxton
Nov 1

When it comes to retail, time is literally, money. More specifically, the amount of time people spend (or don’t spend) in your shop has a direct impact on your retail store’s performance. While dwell time isn’t the only factor that determines how much profit you generate, it’s an important – yet often ignored – aspect.

Establishing your bounce rate – the total percentage of your customers who leave a store too quickly to transact or buy – can shed light on a number of things that are either helping or hindering your retail store performance.

In retail, the rule of thumb is that a high bounce rate equals sub-par retail store performance.

It’s an obvious deduction to make: if 75% of your customers walk out after spending less than five minutes in your store, there’s an underlying problem that needs to be addressed. That said, if you own a corner store that sells the daily essentials like milk, bread and cigarettes, your bounce rate will be much lower, due to the fact that people don’t need to spend a significant amount of time in your store to grab a six pack and lotto ticket on their way home from work. If your store performance is less than great, however, the issue probably lies in other areas. For all other retail outfits, however, a high bounce rate indicates that something's amiss.

Several equally important factors influence your bounce rate.

If too many people are leaving your store too quickly, the problem may be due to either lack of stock, pushy or inept staff, long queues or an all-round unpleasant shopping experience. But before you can pinpoint the root cause of too many walk-outs, you’ll need to establish the relationship between your bounce rate and your store revenue. If you notice that a high bounce rate is directly correlated to sub-par retail store performance, you’ll want to focus your efforts on keeping people in your store for longer.

There are a number of ways to do this: updating staff training, tweaking your store layout, making the in-store experience more engaging via interactive displays, introducing mobile content or special offers, integrating self-service kiosks and POS. (If your revenue is down one month, and your bounce rate remains the same, however, there are other issues at hand.)

Establishing the correlation between your bounce rate and other customer behaviour metrics is crucial.

In order to get an in-depth understanding of how your bounce rate is affecting your retail performance, you have to take other metrics into account. These include: your average foot traffic over a certain period (whether a day, a week, or by the hour); the average duration of a customer’s visit; the average amount of money a customer spends in your store; as well as trends that emerged when these metrics are compared with each other. For example, identifying the times of day that are busiest, as well as the times when foot traffic slows to a crawl, can shed light on your bounce rate.

If you have a high bounce rate and high volumes of foot traffic during a certain time period, insufficient staff or slow check-out lines could be to blame. After reviewing all of the metrics mentioned above, you’ll be able to determine the optimal time a customer has to spend in store in order for you to enjoy maximum revenue – or at least have a good idea of what this number should be.

Blix Traffic gives you invaluable insight into the way your customers are interacting with your store. Easy to implement and even easier to use, our in store analytics software gathers metrics, such as bounce rate, dwell time, walk bys and customer navigation patterns.

Learn more about Blix Traffic for retail

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