How to determine what to measure in your store

Big Data and omnichannel are among the major trends in retail. While most retailers are starting to understand what they can measure with retail analytics, the question that too often goes unanswered is: Why measure?

Falling into the trap of measuring too much and gathering piles of data that won’t be used is easy. To avoid this, it’s essential to clearly understand the “why” before you start measuring. The first question any retailer needs to answer is what the goals of the store are. Once you’ve determined the goals, you can set the metrics that are necessary to measure success. To show you how this works, we’ll do a deep dive into one of the metrics that’s become more popular and easier to measure due to retail analytics: Dwell time.

Engagement And Entertainment

Since online and omnichannel are becoming more important for retailers, the store has become more of a showroom to strengthen the brand and image. As one recent study found, 68% of people have “intentionally browsed products at a store, but bought them online.”

If you’ve determined that engagement and strengthening your brand is an important goal of your store, understanding dwell time is crucial. The longer a shopper stays in the store, the longer she’s exposed to the brand and brand story. Or maybe one of the goals of your store is to have a high “entertainment value,” as we see more and more stores adding elements, such as a café or beauty salon. If you want to determine whether people are indeed entertained, knowing how long they stay in the store is a key metric. Revenue will no longer work as a means to measure these engagement and entertainment levels.

Store Design To Slow Shoppers Down

Moreover, dwell time shows you how good your store is at slowing shoppers down and thus increasing potential time to buy, a goal for any store. To give an example, it’s important to create “safe havens.” What we’ve seen is that dwell time is lower at spots where the shopper stands with his back to the main shopping path. It’s because it doesn’t feel safe and our brain is wired to be cautious for attacks from the back. Placing mirrors strategically throughout the store can avoid this. On the other hand, more quiet spots cornered by shelves from all sides, give a feeling of safety and have increase dwell time at that spot.

Dwell Time And Catchment Area

Another reason why increasing dwell time can be of importance is that it increases a store’s catchment area. Again, depending on the profile and goals of your specific store this might be of importance. Think about IKEA, for instance. The retailer’s catchment area is very large and shoppers accept a longer drive, because they know they will spend an hour or more at the store.

Retail Execution

Lastly, dwell time can tell you something about retail execution. Shoppers can leave faster if they cannot find what they’re looking for and staff is not attentive. On the other hand, at the cash registers and fitting rooms, you might want to aim for low dwell time, as no one likes long queues or slow cashiers.

So you need to take this into account and possibly deduct it from the total, if you’re aiming for high dwell time and want to avoid a skewed picture. Moreover, what we found at several clients was that female bounce rate was relatively high because it wasn’t clear whether there was a women’s section. If almost half of your customers leave after only having seen a small part of the store, dwell time will be low.

Of course, in this case to find the underlying reason behind the low dwell time you’d need additional data, such as demographic data or coverage of the store. So, now you understand what you can learn from dwell time and why you probably want to measure it. The bigger takeaway should, however, be that before measuring anything it needs to be clear what your goals are and how and which metrics will help you measure success.

Heavily invested in a campaign to attract more males to your once female-only cosmetics store? Then it’s crucial to assemble demographic data of your visitors. Is your big goal for 2015 to improve your flagship stores as marketing and branding tools? Then dwell time is one of your most important metrics.

Avoid assembling useless data and start measuring what you really need to know.

This blog appeared earlier on Retail Touchpoints