Are retailers measuring omnichannel all wrong?

Discussion
Photo: RetailWire
Jul 11, 2017
Nikki Baird

Through a special arrangement, what follows is an excerpt of an article from Retail Paradox, RSR Research’s weekly analysis on emerging issues facing retailers, presented here for discussion.

There is a point where customer engagement leads to more sales. But there is also a point where it leads to diminishing returns. That’s the beauty of the sales per engagement-minute spent metric.

This metric enables a breakdown to identify causal factors. If an employee is spending a lot of time with customers but not selling much, they need some sales training help. If a store is getting a lot of traffic and employees are spending less and less time with customers, they need sales help. If a store is spending more and more time fulfilling orders instead of helping the customers who walk through the door, they need more fulfillment staff. Where are the engagement minutes coming from, and where are they delivering value vs. detracting from value?

But note that I didn’t call it “associate-minute spent.” Some retailers have invested a lot in the associate-minute metric, trying to determine the optimal amount of time a store associate should spend with a customer to maximize sales opportunities.

But if you only look at employees, you can sell yourself short. What about the amount of time the customer spent at home researching coming into the store? What about the amount of time the employee spent with the customer who goes home and buys the item? What about the amount of time the employee spends fulfilling the order?

In an omnichannel world, retailers aren’t thinking about extending this metric to online nearly enough.

Along with measuring offline and online traffic, sales per engagement-minutes can put a lot more levers in your hands for driving store results than just comp sales. In a world where the transaction can pretty much happen anywhere, stores need to be able to deliver a heck of a lot more than just transactions — and measurements should reflect that.

DISCUSSION QUESTIONS: Do you see merit in retailers using an engagement-minute spent metric? Is such a metric better suited to address omnichannel measurements than what are typically being used?

Braintrust
"Mapping the sales per engagement-minute spent metric provides great insight as to where and how to optimize the shopper journey."
"While the metric would be telling, the question I have is: how do we measure sales per customer engagement-minute?"
"I definitely see value in tracking this metric. I agree with the mantra, “the consumer IS the channel.” "

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20 Comments on "Are retailers measuring omnichannel all wrong?"

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Ken Lonyai
BrainTrust

Store/omnichannel metrics definitely need to reflect today’s shopping habits, but despite big data, no metric will ever be absolute.

Much of customer engagement and associate time is simply intangible. It’s easy to believe that while nowadays more and more data points can be gathered, that clear correlations can be made. A shopper that is researching products but then gets distracted by a call for a few minutes and browses only half focused, will skew their interest levels falsely. In-store, some customers need more explanations and coaxing than others to make a purchase – no fault of the associate. And … any store that deludes themselves that an associate exists solely to focus on direct revenue-producing activities is courting failure.

Charles Dimov
BrainTrust

I completely agree on this, Ken. To this point, in the omnichannel environment, we need to get the compensation model right. Credit needs to flow by a store region. So when a customer goes home to purchase after speaking with the in-store associate, that credit has to go to the store/region. Otherwise we will have employees who disengage from the omnichannel part of the plan, which definitely disengages customers.

Regarding the engagement-minute spent metric — it sounds intriguing. I look forward to reading more about this. At the end of the day, it will only work if it is easy to do by associates and at the store level. I like the direction, though.

Lyle Bunn (Ph.D. Hon)
BrainTrust

Attribution is the coin of the realm in marketing and promotion toward transaction success. Devices empower associates as they can present features and benefits to close the sale, use and cross-sell. My bets are on branding and merchandising approaches that move the consumer as far down the product purchase decision and selection path as possible before engaging the associate. This speaks to the growing trend of consumers being better informed about products based on their research than associates may be. Associate success should be measured and bonuses should be based on the gap between what the consumer planned to purchased and what they actually purchased, along with increased visit frequency and transaction volumes.

Jeff Hall
BrainTrust

As retail brands continue to adopt an omnichannel mindset around customer experience and the importance of cross-channel touchpoints, the engagement-minute metric should become an ever more important KPI.

Outbound customer communications, coming from e-commerce sites and branded apps, present a great opportunity to better understand and constantly measure engagement-minute metrics. What are the open and click-through rates on these marketing communications, and are they driving repeat site/app visits and purchases?

Many brands feel a need to bombard their customers with email and branded app marketing messages on a daily basis, regardless of customer engagement, likely driving away a significant share of market that they should be more intentionally nurturing. Engagement-minute metrics could be invaluable to creating more personalized, frequency-appropriate communication touchpoints based on customer behavior.

Ian Percy
BrainTrust

First, I read most everything with Nikki Baird’s name on it.

The “engagement-minute” is a brilliant insight and, at least theoretically, is a much better metric than all the other stuff we make up in our desperation to understand and persuade the consumer. I don’t know if that phrase originates with Nikki or not, but If no one has trademarked the term, she should!

Where I still struggle, however, is where does the actual measurement come from? For example the question: “What about the amount of time the customer spent at home researching coming into the store?” How exactly do we find a reliable number to put into the calculation?

So I get the “why” of engagement-minute metrics but I don’t get the “how.”

Tom Dougherty
BrainTrust

I’m a big believer in research. But the omnichannel metrics are not pinpointing causality. They measure correlations at best and are not purposeful.

Retail needs to recognize motivations and not just transactions. The problem with most research is we try very hard to shoehorn the things we measure into behavioral predictors.

The future belongs to the retailer who understands the belief systems of the shopper and not simply the transactions. And there is a built-in bias to this system. Isn’t it possible that the customers that we spend the most time with are self-selecting? Meaning we spend more time with those who appear more willing and eager? It is worth thinking about.

Art Suriano
BrainTrust

I like this technology because it’s more well-rounded and provides a bigger picture of the entire selling process. However I look at all technology as tools and not solutions. Even with engagement-minute metric technology, the sales associate is still going to need effective sales training, customer engagement training and an overall understanding of how to provide exceptional customer service.

Bob Amster
BrainTrust

While the metric would be telling, the question I have is: how do we measure sales per customer engagement-minute? Associates don’t walk around with a stopwatch when they engage a customer and they can’t be relied upon to “begin” an engagement transaction on some mobile device until a sale is consummated.

Adrian Weidmann
BrainTrust

Measuring the entire shopper journey (before, during and after the purchase) is imperative in order to optimize the experience for all stakeholders: the brand, retailer and shopper. Depending on where the shopper is in her journey, the correct content and experience must be presented to her. She may require comparisons, installation, colors available or warranty information. Her present location along the journey will dictate what she needs to continue the journey or abandon the journey with your brand. Knowing where the shopper is along her journey and the time she has invested along that path will allow you to present the appropriate and correct content through the appropriate display in-store, online or mobile solution, mail offer, sales associate, etc. Curating and publishing this library of content on an as-needed basis is a fundamental requirement of today’s shopper journey. Mapping the sales per engagement-minute spent metric provides great insight as to where and how to optimize the shopper journey — before, during and after the sale.

Nir Manor
BrainTrust

I see merit in these KPIs only if they are customer-centric. We should measure how much time is spent per customer against the revenues from this customer both at the store and online and along a time span of few months after the engagement.

Ralph Jacobson
BrainTrust

I definitely see value in tracking this metric. I agree with the mantra, “the consumer IS the channel.” You need to follow consumers and how a retailer’s ecosystem of store staff, online call centers, etc. interact or don’t interact with them throughout the shopping experience.

Bob Phibbs
BrainTrust

To what end, though? Spend all the time to connect all these dots? That’s actionable? If your website is doing a good job, great copy, free samples of material, etc, does more time on the site equal more engaged? Just like when in person, at some point you have to ask if the measuring is more important than the objective. And that “how” you’ll get that full picture seems awfully hard to make actionable.

Larry Negrich
BrainTrust

Time spent with shoppers (prospects) should be seen as a positive for a store and the employee if it can be tied to a sales contribution, that is the hard part. The metric of sales per engagement-minute spent metric is interesting, but how to attribute to a specific sale (unless it happens in the store)? The measurement of proximity sales, all sales inside the store and near-stores zipcodes, is one metric to gain some insight on influenced sales. Still there are multiple additional data points needed to make accurate measurements of an individuals’ performance.

Craig Sundstrom
Guest

I don’t doubt for a minute that (many) retailers are measuring things wrong, but I have to ask why that is so; and the reason I come up with is limitations in the way things can be measured: the “customer who goes home and buys the item,” how do we analyze that … who did they “engage” with? What research did they do on their own? To an ever increasing degree (it seems) surveys are done to answer these kinds of questions, but the limitations of these are many, and ultimately we’re still mostly stuck with sales/employee hours paid for.

Peter Fader
BrainTrust

How about Customer Lifetime Value? Pretty much everything else is just noise.

Adam Silverman
BrainTrust

One of the keys to success is understanding how to take action. While making improvements to processes (such as improved training, or more fulfillment staff) will create a benefit, measuring and acting upon this metric in real time is critical to maximize performance. In the store, having the ability to assess this metric in the moment along with other contextual information such as location or skill set of associates will generate the best performance. Retailers need to not only think of new ways to measure success, but need new mobility tools that allow them to take action with the right people, at the right time.

Ken Morris
BrainTrust

I definitely see the value if and only if the metric tracks the omni-channel purchase. The purchase can be made anytime and anywhere and the store associate who works with the customer must be rewarded for time spent when the sale happens online. We have worked with retailers doing just this type of metric and it is a far better way to track and fairly compensate the store associate. To me, a better way to track as our stores become showrooms is the geographic model now employed by savvy retailers who get the concept. Those sales within an x mile radius of a store apportioned to that location, or as we have done in some instances, begin the sale in the store and complete at home, thereby preserving sales associate identity.

Mark Price
BrainTrust

The fundamental assumption around sales per engagement minute is that the best way to measure the value of engagement is through short-term revenue. Analysis of best customer behavior suggests that the value of engagement is best measured in share of wallet over a longer period of time, like a year. In addition, best customers tend to bring friends to the retailer as well, which needs to be counted in their overall value.

We have enough trouble with short-term thinking by retailers. I know everyone has to hit the quarterly revenue numbers, but consideration must be given to total annual value as well.

Peter Luff
Guest
I have read the article and responses with interest, of course I agree with some and have a different view of others. Sales per customer engagement-minute does on first explanation seem intriguing especially when wrapped around the omnichannel buzz word. However, like many, I am struggling with the practicality of measuring this in the real world. Online would seem to be pretty straight forward to understand. I agree with many who comment that the online sales need to be assigned to the stores. For me this is a critical approach and the same holds true with click and collect transactions. The stores need to see reward for their efforts, even if your store is becoming a more experiential theater for supporting the brand rather than the historic transaction emporium. Putting the complexity aside of measuring this item, I am left like many pondering what is this metric telling me that I cannot get in much easier ways with other existing metrics. For example, the gist of what you are getting from this metric, how much sales effort is it to get a sale, I argue can largely be obtained from Conversion Rate (CR — how many of the opportunity buy)… Read more »
Scott Magids
BrainTrust
3 days 15 hours ago

The engagement-minute metric is useful, but still limited in several ways, and does not provide a true picture of what the customer wants and needs, and how likely they are to make a purchase. The sales process starts long before the sales agent engages with the customer, often with the customer doing their own research online. More important metrics will focus on how emotionally connected customers feel to the brand, and that connection is the result of many factors besides direct engagement from sales staff.

Sales per engagement minute may be a good tool for measuring the effectiveness of sales agents, but more important are metrics that look at the entire customer lifecycle, how engaged those customers are long-term, and how loyal and emotionally connected they may be to a brand. A high sales per engagement minute rate is only a small piece of the puzzle and that metric will be heavily influenced by what has already gone on before the customer walked into the store.

wpDiscuz
Braintrust
"Mapping the sales per engagement-minute spent metric provides great insight as to where and how to optimize the shopper journey."
"While the metric would be telling, the question I have is: how do we measure sales per customer engagement-minute?"
"I definitely see value in tracking this metric. I agree with the mantra, “the consumer IS the channel.” "

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