Are retailers measuring omnichannel all wrong?
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?