7000 retail outlets were shut down due to e-commerce’s fierce competition. But McKinsey found that retailers were measuring store performance inaccurately. Simultaneously, with unhinged focus on online metrics for campaign performance, several retail brands continue to measure marketing performance in terms of feel-good metrics instead of real-world business outcomes. When the retail sector bases its business and marketing decisions on inaccurate measurement, it ends up hurting its bottom lines without even knowing it. The time has come to, once and for all, fill the measurement gap in retail. Footfall attribution is proving to be pivotal in this process.
What is wrong with traditional measurement metrics?
The biggest challenge is what McKinsey calls the “four-wall economics” of store performance. Retailers are often so focused on the dollar and cent revenues raked in by each store, that they overlook just how much shopping behaviour itself has changed in recent years. The role of physical stores has changed dramatically within a shopping environment that continuously switches between online and offline worlds. Showrooming forms a very crucial aspect of buying decisions in this environment. After research in 2018, Nielsen found that showrooming – going to a store to touch and feel products before purchasing them online – has gone beyond auto and fashion industries. 75% of grocery shoppers now visit physical stores to “showroom” before closing their purchase online.
The problem with traditional metrics for retail store performance is that it doesn’t take into account showrooming and its extremely crucial role in purchase – whether these purchases eventually happen online or offline.
So what can retail brands do better?
Address the measurement gap!
What the industry needs is a whole new set of metrics that measure beyond just the purchases made at each store. For example, if a store forms a crucial part of showrooming and visits are followed by more research or online purchase, then sufficient attention must be on the store’s untraditional contribution to revenue. Shutting down the store or blaming marketing metrics due to lack of sales would cause more harm.
What brands need are data and insights to fill in this measurement gap. A fresh approach to measurement is easily achieved by a combination of online and offline behaviour and places insights that reveal the actual footfall potential of each store – for purchases as well as for showrooming.
Lifesight’s Attribution solution is designed to support this wave of change in retail performance and marketing measurement. Visionary retail brands around Asia Pacific are using footfall attribution to revolutionize marketing measurement as well as store performance at large. We can safely say that these retail brands are addressing the measurement gaps at more levels than one.
You can join this revolution too. Holler for a demo, exciting times ahead!