Why Measuring Engagement is Vital to Driving Offline Sales

Why Measuring Engagement is Vital to Driving Offline Sales

By Michael Minar, Data Scientist | #EuclidData | 25 February, 2014

TRANSFORMING BRICK-AND-MORTAR EXPERIENCE

Today’s retail environment is a highly competitive one. E-commerce companies like Amazon, Overstock, and Ebay have set a higher bar for brand experience across both online and offline platforms. At the same time, there remains a powerful experience aspect to shopping in a physical store: trying things on, engaging with a knowledgeable staffer, socializing with friends. Retailers are recognizing that innovation depends on engaging shoppers and delivering the best customer experience possible.

This is why smart retailers all across the country are embracing the use of data analytics to make intelligent decisions about running their businesses. This post highlights the importance of a key metric brick and mortar stores have lacked – Visitor Engagement.

 

WHY VISITOR ENGAGEMENT? – HOW EUCLID CAN HELP

  • Euclid makes it simple for store operators to measure how long shoppers are staying in stores and how engagement reflects visitor experience.
  • In a study of this data across thousands of locations in the US and millions of shopping visits annually, we measured the direct impact of engagement on sales performance.
  • Our findings: More engaged visitors drive larger sales baskets and more revenue
  • Here’s the hard evidence found across thousands of specialty retail locations and millions of shopping sessions. Engagement drives sales, to a greater extent than traffic (which is not enough to indicate performance alone).

 

EUCLID DATA IN ACTION – LUXURY APPAREL SAMPLE SET (FALL 2013)

If you were to indiscriminately plot the daily number of visitors and resultant revenue by store across multiple, you would see a weak correlation between in-store traffic count and store revenue. Below is a scatter plot showing daily revenue vs daily traffic at Euclid luxury fashion locations for Q3 2013. There are clearly many days where traffic alone is not enough to explain the store’s performance.

There are clearly some outliers where store performance was particularly poor even though total traffic was quite high. We think we can measure and predict better. Traffic to sales: Some correlation but not enough.

 

VISITOR ENGAGEMENT – WHERE EUCLID CAN HELP

  • Euclid counts not just the number of visitors, but also the quality of visit through engagement
  • We score each store appropriately we are able to see a much stronger relationship between in-store behavior and revenue
  • Our technology makes it possible to get fast feedback chainwide, allowing for real-time response (i.e. staffing) and right-time decision-making (store performance)

 

Below is a graph of the same revenue data vs engaged visitor count. The scatter plot shows daily revenue vs daily engaged traffic at luxury fashion locations for Q3 2013. Here we clearly see a strong relationship between quality visitors and store performance.

Engagement to sales: Much tighter correlation and predictive indicator of performance.



WHY DOES THIS MATTER? THE KEY TAKEAWAYS
  • Sales and transaction data is not enough; Engagement correlates much more strongly to sales performance
  • Customer-centric metrics like Engagement are key to improving chainwide marketing, operations and strategy
  • Measuring and managing Engagement leads to a strong impact on the bottom line and better brand experience

 

How are you measuring and quantifying marketing, operations and strategic spend to improve brick and mortar experience?

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Michael Minar, Data Scientist

Michael Minar, Data Scientist

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