The vast majority of customers going into a store will not buy anything. But there are ways to promote consumption.
The ratio between the number of customers stepping over the threshold (actual or virtual) of your store and those who end up completing a purchase is called the conversion rate. This varies enormously depending on the type of business and the distribution channel:
- Store. In a physical store, the conversion rate usually reaches between 20% and 40%. The rate is particularly high at supermarkets and other stores providing essentials, along with electronics retailers. It is lower in luxury stores and art galleries.
- Internet. Online, the conversion rate is between 2% and 4%. Some portals, like Amazon, can achieve a rate as high as 8%.
- Showrooms. A recent phenomenon is in the process of reversing the trend: consumers are increasingly treating physical stores more like showrooms, before then making their purchases online, where they know how to find the best price.
Generally, brands offering products that customers need urgently or that they cannot find elsewhere have a higher conversion rate.
Making people want to buy
There are several ways of encouraging the buying decision and therefore of improving your conversion rate.
- Hospitality. Contact with employees should be polite and friendly. On entering the store, customers should be greeted and told about the products on offer. If they look hesitant, they should be given advice. To make things easier for them, you can tell them where the crèche, seats or coffee machine are.
- Strategic positioning. Studies show that customers quickly cover the first five to ten meters from the entrance, then stop. This spot is a strategic space to talk to them or set up a notice providing information. On the Internet, customers always start by looking at the top left-hand corner of the screen.
- Shopping carts. Consumers buy more if they are provided with a shopping cart or basket, leaving their hands free. On the Internet, customers need to be able to recover their virtual shopping cart if they leave the site before completing the purchase.
- Cleanliness. Customers are very sensitive to spaces which are too small or dirty. Shopping is an experience that involves all five senses. Chains like the clothing stores Abercrombie & Fitch have understood this and diffuse perfume in their stores.
- Stimulating the senses. If the customer picks up an item, there will be more chance of a purchase. So encourage customers to touch, try on, sit on or drive the product you want to sell. Real estate agencies play on this concept by showing their potential customers model apartments which are already furnished, so that they get a sense of what it would be like to live there.
- Sample. If the consumer is hesitating, why not let him or her leave with a sample to try at home? If satisfied, he or she will want more and will come back.
- Simplified purchase process. The purchase itself should be a simple, fast process. Long lines at the register will make customers leave. Online, the less information consumers need to enter, the more likely they will be to buy. Amazon and the iTunes Store have pushed the concept even further: once your information is saved, you can make your purchases in just one click.
Sources: Small Business Marketing Kit For Dummies, Barbara Findlay Schenck, John Wiley & Sons Inc, 2012; Why We Buy: The Science of Shopping, Paco Underhill, Simon & Schuster.