In retail stores every day hundreds of customers enter. Some of them are just seeing things, some are doing window shopping, while some are serious buyers, walking-in for a purchase. The retailers need to know what kind of customer they are to allocate their scarce resources for providing best possible customer services in an effective manner. Usually, the types of customers enter in a retail store can be categorized into four broad types. They are;
- Watchers: these customers will never buy from the store, no matter what kind of products and services you offer. These people generally enjoy to watch and to see. Watchers usually prefer to observe by scouting different stores. In many cases, they are not yet confident about the dimensions and features of their potential purchase. Therefore, their key objective is to get the primary glimpse of the products you have in your store.
- Potential: these are the customers who really can be of great benefit to your store. As they come and visit your store to observe and to know about your products, with the objective of making a future purchase. Potential is the retail customers who truly evaluate and make comparisons between brands to make their final selection. So, as retailers, your primary goal should be to provide as much information as possible to these customers, so that you can attract their attention toward your offerings.
- Almost: these are the customers who are willing and waiting for the right time and reason to make a purchase in your store. These customers are very hard to predict. Their purchase decision making is influenced by so many factors, which can be truly out of your realm. They usually make their decisions based on the price, features, after sales support and quality of the products and services. As they critically evaluate the alternative choices among retail brands, it is very difficult to offer that extra… which will ultimately cash in the prize for you.
- Customers: these people actually make a purchase and they can be an element for the future brand loyal segment. These customers are your blessings, as they make the final purchases and you should provide them with the best possible after-sales Because of these people, your brand will gain wider market acceptance among your segments. As a retailer most of your energy, efforts, and initiatives are directed toward them to ensure they come back and become repeat purchaser, leading toward their brand loyalty.
Now as a retailer you already have some idea about the customers who have been visiting your stores, now we can shed some light on the ways of evaluating these customers contribution in making your store a success story.
Average Ticket Size (ATS) can be an effective way to measure your store’s performance. Therefore in the retail industry, most of the time, ATS is considered as the secret of the retail trade in measuring your store performance. ATS is a term that defines retail performance in many retail houses all over the world. ATS stands for ‘Average Ticket Size’. The retailers calculate ATS by dividing the amount of money with a number of customers purchased. So, an increase in ATS will define a successful marketing program for the retailers.
ATS = Total sales for a certain period of time/Number of customers paid for achieving the sales amount
As an example, we can consider the scenario in a local hometown retail store called Smart store. Suppose, on the month of June the store sells an amount of 20000 US$. On this particular month, around 2600 customers visited the store. Out of these 2600 customers, 1432 actually made some purchases from the store. So if you want to calculate the ATS of Smart store for the month of June you need to do it like:
ATS in US$ = 20000/1432 = US$ 13.97
This ATS can be used to track and compare Smart stores sales performance with reference to the other retailers in the neighborhood or in the region.
Another tool for measuring your store’s performance is Unit per Transaction (UPT). UPT is a vital tool for modern-day retailers in measuring their store efficiency. UPT stands for ‘Unit per Transaction’. In order to measure your UPT, you need to divide your total number of products sold with the number of customers. By this, you can measure the level of your merchandise acceptance among your target walk-in customers in the stores.
UPT = Total number of products sold over a certain period of time/Number of customers paid for achieving the number
As an example, we can understand UPT from Smart stores perspective. Let us consider, on the month of June the total number of products sold in the store are 3780. On this particular month, around 2600 customers visited the store. Out of these 2600 customers, 1432 actually made payments to make their purchases. So if you want to calculate the UPT of Smart store for the month of June you need to do it like:
UPT = 3780/1432 = 2.64
UPT can be used to track down the rate at which the inventory is moving from the store till the end of the counter sales process. Smart store can compare its UPT with other retailers in its community to find out the speed at which it’s products moving out (being sold).
For retailers most of the times recognizing their customers and primarily measuring their role in making the stores successful have been two of the most important aspects of their day to day retail operations. In doing these we would like to draw all retailers’ attention to the point of building long-term relationships with your customers as only customer loyalty has the strength to ensure your retail stores success in the long run.