If we’ve ever spoken about monitoring retail performance, you’ll know how much I detest “Spend per Head” or “Spend per Visitor”. It’s a pretty meaningless measure, and I don’t mind telling you so. Usually, people will tell you that it allows a comparison either over time or against other museums, farm parks, galleries or attractions. That’s true, of course, but what is it comparing? You’ll need to understand the visitor numbers and then the product mix. In any case, I have gone off at a tangent, when I now need to tell you that two much better metrics are conversion rate and average transaction value.
What is the retail conversion rate?
Customers divided by total visitors. Simple, eh?
Counting Total Visitors
For us who work in visitor attractions, that last number is an easy one, we love to count our visitors. On the high street, you might have a beam counter or something, but buyer intent is different in a commercial venture.
Having said that we love to count visitors, it’s really important to be consistent and to consider who is a visitor. Do you include toddlers? School parties? At one site I managed we used to have count visitors and tour participants. You couldn’t do the latter alone, so we needed to discount those for the purposes of this calculation. Another side had visitors who could visit a country park/walk and potentially a history as well as the visitor centre. This could get messy, so I’d suggest just those entering the visitor centre be counted.
How to count your customers
The next thing is counting customers. Most EPOS systems or tills will tell you the number of transactions the till has done in the session, and that, for a gift shop till is the number of customers. Of course, most tills are not 100% given to a function. If you can sell a membership in the gift shop on the way out, you would, wouldn’t you?
And guidebook sales on the way in? People, who make more than one sale? It quickly gets messy. Generally I would recommend just taking the tills that are predominantly retail or you’ll spend all week untangling the data.
The key here is to get a figure and to use it consistently.
What is the Average Transaction Value?
Sales/Number of sales
I love this measure. Most of the retail team won’t care about margin or product mix or anything else but “Every time the till drawer opens I’d like there to be £12 going in” is really easy for everyone to understand.
As above, take this figure from the tills which are mostly retail.
“If you can’t measure it, you can’t improve it.
Both Average transaction Value and Conversion Rate can be measured and improved easily and consistently.
You’d expect the ATV to vary according to the visitor mix- if you go from a bank holiday weekend with a grandparents event to a peak school visit day, the average transaction value will plummet
Which measures do you like to record and act on?