While Black Friday is over, extended sales and online deals indicate that shopping patterns are changing and retailers need to get that. Online and mobile shopping is on the rise, and the way retailers approach that aspect of their business could make or break them moving forward. For stores, understanding the relationship between people in stores and sales is essential, and ShopperTrak, the world’s largest foot traffic measurement company, that happens to be headquartered in Chicago, makes that possible.
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Launched 15 years ago by Bill Martin, ShopperTrak helps retailers understand foot traffic patterns and correlate them to sales in meaningful ways. The data provided by this company, which Martin describes as “built in Chicago,” provides insight in the way few others can, and that’s what makes this homegrown business a powerhouse. Having lived in Chicago for 65 years, Martin’s passion for his work has joined forces with his love for the city, empowering him to grow to the point of monitoring 50,000 stores in 70 countries.
With the ability to watch and analyze so many retail locations, ShopperTrak can take sales and traffic data from major shopping events, such as last week’s Black Friday, and extrapolate from them. For example, reports released early this week demonstrated a change in consumer behavior compared to previous years, according to ShopperTrak. For example, some sales started as early as 8 p.m. on Thanksgiving Day and continued through Sunday, stretching what used to be a single shopping day into a Black Weekend. This resulted in a growth in retail foot traffic of 8.2 percent compared to last year, while sales grew 2.7 percent to $22 billion.
“What the retailers have done is spread this out if we think of Black Friday and doorbusters,” Martin says. “They’re really trying to expand the week.”
ShopperTrak monitors foot traffic data using a proprietary device called Orbit, which sits above store entrances This machine, now in its fifth generation, can tell when people are coming and going, discriminate by height (to single out adult shoppers only), and ignore moving objects such as strollers. Every day at midnight, ShopperTrak collects data from the Orbits and, combined with sales data from individual stores, provides reports to retailers by 8 a.m. the next morning. Comparing the level of foot traffic to sales allows ShopperTrak to provide a conversion rate based on a proprietary algorithm, which tells retailers how many people are buying rather than simply browsing.
“In this case, we’re seeing the number of visits being made per shopper is on the rise and that suggests to us that there’s a little more browsing going on and this opens up a channel that’s been closed for a while, and that’s impulse buying,” Martin says. To him, this demonstrates the importance of brick-and-mortar stores, even as online shopping grows year over year. He mentions that e-shopping accounts for less than 10 percent of overall retail sales, but acknowledges that retailers whose strategy does not include virtual shopping are behind the curve.
Visit ShopperTrak’s website, check out their BIC profile and follow them on Twitter at @ShopperTrak.
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