Listen, we’ve all been there. Looking at our reports mid-month or as the quarter nears a close and thought “Well, THOSE numbers need to be higher.”
As a retailer, odds are you are always working on making more money – it comes with the territory, but despite having money on your mind, making a plan and seeing results is another story.
That’s because we think about “making more sales” as a single to-do list item – which leads to a lot of anxiety, wheel turning and ultimately very little progress. Most of the time, if your plan is to simple drive more sales, you do a whole lot of finger crossing and praying every morning.
Well, I want better for you, your nerves and your bank account. When you set out to increase your revenue, there are essentially three paths, all of which come with their own strategies.
First things first – in order to make sales, you need folks to sell to. Whether your shop is digital or physical, it’s crucial to keep tabs on traffic. How many people walk in your doors each day or visit your website? The more visitors you get, the more opportunities you have to sell. This is where “acquisition” strategy comes in – things like paid advertising, collaborations, affiliate deals and often, a targeted social media strategy that gets more eyeballs on (and in) your shop.
Okay, amazing! Now that you’ve got solid and consistent traffic, it’s time to take a critical look at your conversion rate – meaning of the people who visit, how many are buying. Industry wide, retail conversion rates hover around 20-40% for brick and mortar shops, and 1-2% for eCommerce (indie retailers tend to have much higher – not to brag 😉). In order to raise your conversion rate you may try updating your website’s UX, personalizing your marketing and overhauling your customer experience.
Lastly, how much are your customers buying when they shop? To calculate your average order value, divide your total sales by the number of transactions and voila – AOV! This is a critical number for retailers as it will give you insight into ideal price points for inventory and general product market fit for your current audience. There are certainly ways to get creative here – bundling promotions, free shipping cutoffs, strategic merchandising and upsells.
All in all, it’s important to have a handle on these numbers regularly so that you can easily identify when one of your key metrics is out of whack. Even if there isn’t a “sales problem” to solve, this list can also be super helpful. When implementing a new strategy, ask yourself: “Which number am I hoping this will improve?” Then throughout your testing, you can keep an eye on your progress and make the most effective decisions going forward.