Retail Conversion in fhe New Economy

Published: 30th November 2008
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One of the most critical retail metrics I consistently talk about
involves a store's conversion ratio. Conversion ratios rank up
there with personal productivity per hour metrics by employee.

The conversion ratio is typically calculated and expressed as a
percentage to traffic into the store. If a store has 30 customers
in a day and makes 10 sales, the conversion ratio would be

10/30*100 or 33 percent.

In reality, a 33 percent conversion ratio over the past 10 years
for the average retailer is quite typical. Even in better times
however, this means that twice as many people walked out the
door without making a purchase compared to those that did.

Without question, all retailers are experiencing less traffic as
compared to previous years. Consumer credit has been
tightened up and buyer's confidence has dropped. Customers
will be more hesitant to part with their hard earned dollars,
and your store will encounter fewer of them.

If your traffic drops by 25% for example, your conversion ratio
needs to improve by 25% just to maintain previous sales levels.
How do you improve your closing ratio in these challenging times?

Put yourself in the shoes of the customer. Tighter money and
lower buying confidence means that staff will really need to
interact with the customer and make sure that they have
satisfied the concerns that are voiced.

All retail leaders must share this spirit of service with their
sales team:

1) Sales people must demonstrate sincerity and enthusiasm on the
floor more than ever before. Indifference with today's consumer
will certainly kill the sale.
2) Sales people must be totally versed with product knowledge and
all the features and benefits your products offer
3) Your sales team must be able to demonstrate and discuss your
product line with confidence and authority.
4) Your team must also use all the tools at their disposal to close
the sale. Discuss and overcome customer objections and offer
a layaway program (as discussed in an earlier article) as a
powerful closing tool.
5) Although a liberal refund policy should never be used to close a
sale, be prepared to discuss it if the customer raises questions
about the ability to return the purchase. In these challenging times
consumers need the confidence to buy with the protection of a
service oriented return policy from your store.


1) Benchmark your current closing ratio over the next full week. A simple
count of traffic in the store divided into the number of transactions will
give you the percentage.
2) Meet with staff and explain how your conversion ratio must increase
with lower traffic levels. Aspire to double your conversion ratio.
3) Share the new challenges with staff and stress the need to interact
on the floor with customers with ultimate confidence, sincerity and
4) Make sure that staff are fully trained to product knowledge.
Evaluate staff and focus particularly on new employees. Schedule
remedial training as needed.

Above all, give your staff all the support they need and review your
conversion ratio with every one at the end of every week.

Hang In There!

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