Background
We have seen so often how good retailers, even great retailers, have seemed to have forgotten the untapped power that they have in the people side of their business in their stores. Most serious retailers have invested millions of dollars into store fixtures, store design, Point of Sale Systems, Inventory Control Systems, Electronic Article Surveillance, Warehousing, EDI, and a host of other ways of procuring, tracking and presenting the goods they sell. Most companies have become experts at this. The goods are getting to the stores, in the needed quantities, at the right time, and with the best margins possible.

With all this in place, many retailers are still finding sales, and more importantly profits, flat. The cause, in many organisations is something that has been permitted in our industry for years… the lack of responsibility and accountability for performance at the store level. Regardless of how good our systems are, no sales will be made if we don't have the people in place to close them. Bricks and mortar retail is a people business… people selling things to other people.

Performance
Performance on Traffic, or to put it another way, how well a store taps sales from the traffic it receives, is a critical measure for retail businesses. It can have a much more significant impact on both sales and profits than anything the other systems provide, but, it is hidden to most retail chains. Before a chain can start to work on its performance on traffic, it needs to identify what their current performance on traffic is. In order to determine your current level of performance, you MUST know your store traffic.

A few Facts
First , increasing traffic does not necessarily increase sales.  There have been plenty of examples of this, most retail sectors will have experienced an increase in traffic at some stages, but sales have not improved. You can make any sort of justification of this you wish, but it is not just the "big" swings in traffic caused by promotions and other extraordinary events. The same is often true on the minor fluctuations that occur from day to day, or hour to hour.

Second, the average mall-based retail store converts considerably less than 20% of its traffic to sales. No matter how you slice it, no matter how many excuses you come up with to justify this, discredit the traffic counts, question the performance, the point remains… a huge number of people enter stores and do not buy. What will become clear below is just how significant this is.

Third, unless you have installed traffic counters in all your stores, your current systems will leave you guessing and speculating about the sales performance in your stores. You are missing two critical elements that will hinder your ability to drive sales.

• Identification of your potential
  
• A degree of accountability
  

Every store manager, sales person, or part-timer knows that it is "foolproof" to blame low sales on low traffic. The sad thing is that while few believe them, we have no way to disprove it. Traffic counts make your results relative. If for example, the store made $1000 in sales when 500 people came in, and $1000 in sales when 400 people came in, it is clear that the performance in the store these two days is not equal.

No "no-traffic" Excuse
Store staff cannot, from day-to-day, control the traffic they receive. They can predict it, they can use the patterns, but they cannot significantly alter their normal traffic pattern or volume from day to day. This being true, the only thing they can control is their performance on Traffic… how well they do on the traffic they DO receive.

Making stores and managers accountable for performance focuses on the controllable part of the sales for the store. Regardless of the volume of traffic the store received, (which is a more a function of the Marketing, Leasing, PR, Store Design Departments), if a store is expected to achieve a predetermined objective for their performance by traffic, the traffic volume doesn't matter. The "no traffic" excuse is immediately removed, and accountability can be placed where it should be, on the selling floor.