Is traffic a flawed measure of engagement?
Through a special arrangement, presented here for discussion is an excerpt of a current article from the blog of Nikki Baird, VP of retail innovation at Aptos. The article first appeared on Forbes.com.
Traffic is probably the oldest form of engagement measurement, outside of straight-up brand recall. If people never come to your stores or website, you’re never going to sell anything.
What’s important about traffic — especially for stores — is not the raw number, but the conversion rate, or basically dividing the number of transactions by the number of visitors.
But companies face complications with the metric as store managers with bonuses on the line seek ways to make their conversion rates look better.
At one consumer electronics retailer I knew, the traffic counter was raised from knee-level to four-feet high to better gauge the conversion rate of families. The odds of all four members of a family of four walking out with TVs is small.
In another case, a fashion retailer heard complaints from its tourist stores that they should be held to a different conversion rate expectation than lower-traffic suburban stores because they saw a lot of non-buying “entertainment” traffic.
But all of a sudden the discussion has moved from traffic to how to compare stores against each other — and that’s part of the danger of using traffic. Traffic basically tells you whether people are aware enough of your stores or website to go there, and the absolute number isn’t nearly as important as the trend (up or down).
One thing traffic does not do, though, is measure the quality of the engagement. Did consumers stay a long time on the site or hang out at the store or did they bounce right back out? Measures of bounce rates and dwell times are sometimes needed to get to “quality of traffic.” And as the busy tourist stores pointed out, makeup and buying intent matters, so more sophisticated tools like video analytics would be needed before retailers can draw any conclusions about the composition of traffic and the sales opportunities they represent.
Regardless of method, the objectives for measuring engagement is understanding how to invest appropriately to support strategic touchpoints that may not directly lead to sales, but certainly support the customer journey towards sales as the outcome.
DISCUSSION QUESTION: What are the pros and cons of using traffic as a measure of offline and online engagement? What alternative or complementary measures of engagement may yield additional insights?