There are seven
sources of retail traffic, but only four of them are pillars of traffic
that can be managed to get positive sales results over short time frames.
The furniture industry is coming off one of the biggest “promotional events”
in its history: two years where consumers spent more time at home,
encouraged to do so by health officials, the press and the government. In
2021, many furniture retailers experienced record increases driven by
purchase-motivated customers. They had higher traffic, better close rates,
increased profitability and cash flow. Also, higher average sales resulted
from price inflation. During the period following mandated shutdowns,
salespeople were just trying to keep up with the volume of traffic coming
through the front door.
It was inevitable that this externally influenced retail traffic generating
phenomena would come to an end. Salespeople, who were too busy in 2021, are
now complaining that business has softened.
2022 Sales Metrics
Comparing the average sale and close rate numbers for our retail clients in
2021 vs. 2022, we found that these two metrics remained similar for many
businesses. That leaves traffic decreases as the sole culprit for sales
declines. Smart retailers we work with have decided to try to address this
issue in a number of ways.
Seven Sources of Retail Traffic
The rest of this article will present seven sources of retail traffic along
with methods by which this traffic can be maximized. Retailers who implement
these methods will achieve greater sales in the coming months.
One of these traffic sources is uncontrollable, two are semi-controllable
and the remaining four are pillars of traffic that can be managed to get
positive results over shorter time frames.
The Uncontrollable Source: The uncontrollable source of
traffic is the economy. Most retailers are hostages to external factors
within their regional economies. During economic upswings everyone looks
like a great business operator. It’s the downturns that separate truly great
operators from all the rest. Great retailers focus more on what they can
control rather than what they cannot in any economic cycle.
Two Semi-controllable Sources: Retail locations and
operating hours are additional sources of traffic. Hours of operation can be
extended to capture more business. If you cut your hours during COVID,
extend them to pre-COVID levels. Location is, of course, hard to control in
the short term. If you are considering opening a new location or relocating
an existing store, search for the best possible location and budget for
recessionary traffic levels to ensure profitability.
Four Controllable Sources: The following four controllable
customer traffic sources are major levers retailers can use to increase
sales in the coming months. The stronger each of these pillars, the greater
your sales will be in any economy.
The first pillar of traffic generation is advertising. Retailers
typically send the same ad campaign to a broad audience using a mix of
TV commercials, direct mail/print, radio spots, email broadcasts, mass
texts and websites with popup CTAs (calls-to-action). Messaging may be
promotional or branding type. Either way, mass communication advertising
is the most expensive of the four controllable sources, usually 5 to 10%
of total sales. In slow traffic times, it may be higher if you need to
stick to a fixed marketing budget.
When traffic trends down, most retailers are inclined to use mass
promotional campaigns. The logic is that these campaigns can ‘buy’
traffic. If that were always true, the solution would be simple, and no
businesses would ever experience a sales slump. Keep in mind that there
are diminishing returns on using the same ad messaging over and over
again. That’s why every retailer should look for better ways to manage
and improve mass communication advertising and mix. Here are a few
Track it! Track metrics that lead to results. Over 100 years ago, the
retailer John Wanamaker famously said, “Half the money I spend on
advertising is wasted; the trouble is I don’t know which half.” That is
an excuse that competent retailers can no longer use. If you don’t know
if it works, drop it or devise a method to track it. Tracking methods
for traditional campaigns may include QR codes on print material, text
codes on TV or radio commercials and measuring digital traffic after a
non-digital campaign. Email and SMS broadcast campaigns are more easily
measured by open and click rates.
Switch it up. If your advertising is not producing the desired traffic,
try something different in terms of message or media. Depending on your
budget, some choices may not be attractive. For example, if your budget
is too small for effective broadcast television advertising penetration
in your area, find a more targeted approach. Or, if you compete head-on
with a much larger competitor, using the same messaging and media
choices, that may not be the best use of funds.
Be creatively promotional. Give people a reason to visit you, make it
fun and celebrate something. Retailers typically run promotions over
standard holiday weekends. When every retail business in your trading
area has a holiday promotion, your message can get drowned out by all
the noise. Consider promoting at non-traditional times like over Easter,
Cinco de Mayo or around the Superbowl.
Use an ad agency. There are a number of industry-specific marketing
agencies that have the experience, creative talent and the ability to
track important metrics. If you find the right fit, these businesses can
help you stay on task, free up management time and get better results.
“There are four controllable customer traffic sources that can act as
pillars to strengthen the foundation upon which you can improve sales.”
The second pillar of traffic is salespeople. This traffic consists of
past customers or prospects who are re-engaged by sales associates. Also
referred to as follow up or prospecting, this second pillar can be a
significant source of return customers and be-backs. Over the past two
years, many retailers did not need to focus on this pillar. Even before
the pandemic, only true professional salespeople consistently used
prospecting and follow-up tactics to generate leads. The best writers in
our industry produce over $2 million per year, while the upside for an
average writer is around $800,000. Since both top and average writers
usually work similar hours, the difference is how they conduct
themselves. Here are some examples of how true sales professionals
- They follow up with customers who did not buy.
- They provide consistent updates on open orders.
- They follow up before and after delivery.
For prospects who do not buy on the first visit, they get customer
information for follow-up. This information is more than just a name,
phone and email. It includes the details of the prospect’s situation.
- They touch base with past customers.
- They follow up on quotes.
They notify past customers and hot prospects of upcoming events and
advertisements. When the business has a promotion, most potential
customers never know. They don’t see it on TV, look at a mailer, or
read the e-blast. However, if the customer gets notified by their
salesperson or designer, they may come in if they are still in the
market to buy.
- They post on digital channels.
The challenge with getting significant salesperson-generated traffic is
that salespeople usually won’t follow up to the fullest extent, even if
a manager asks them. Another issue is that some sales managers are so
fearful of losing their salespeople that they accept a poor level of
prospecting. If you want to build more traffic from this source, more
management effort has to be invested in the following areas:
- Tracking all completed follow ups.
Tracking the sales effectiveness ratio: (Close rate + traffic with
proper follow up) / total traffic. This should be at least 60% for
Set and require standards for follow-up, prospecting, be-backs and
digital postings. Mandate that these standards are followed,
especially for non-top writers.
Discuss these points with your sales team every day so the message
The third pillar of traffic is CRM. CRM (Customer Relationship
Management) is technology and workflows that enable targeted, tracked
and automated communication with prospects, current and past customers
across all digital and physical touchpoints. A CRM is not a POS, ERP or
an inventory and accounting software system. It is a web-based system
that specializes in customer and prospect communication that exists
alongside your POS system. Outside the industry, CRMs are common.
However, in the furniture business they currently exist primarily in
larger or more innovative businesses. Here are some examples of how CRMs
can generate traffic:
- They can automate communications.
They can be set to send specific and relevant messages from
salespeople to their customers. Examples are: thank you messages,
quote follow-up, order follow-up, delivery notification, past purchase
follow-up, and loyalty programs.
- They enable appointment scheduling for hot leads.
They are connected to the website, allowing leads from digital
visitors to be captured. This can be done via chat, CTAs
(calls-to-action), contact forms, surveys, service ticketing, contest
entry, and item inquiries to name a few.
They measure the full customer journey from a digital lead to an
in-store visit, through delivery, service, and beyond.
There are many benefits to installing a CRM system, however,
implementing a CRM must be treated with the respect it deserves. Similar
to a POS system, it is not an app that can be downloaded and will just
work by itself. This innovation requires commitment and support at the
very top level of the organization, and a committed and organized
project manager. With these two you will win, without them, you will
The fourth pillar of traffic is networking. Networking involves creating
partnerships and mutual agreements with people and organizations in your
business region. Those companies that execute these programs properly
and continually work on sustaining relationships generate additional
traffic. Examples include:
- Builder programs.
- Realtor incentives.
- Charity organizations.
- Chamber events.
- Store use for partner events.
- Interior designer relationships.
Of the seven previously described traffic sources, focus on the four
controllable traffic pillars with necessary effort and leadership. Make sure
your team is onboard, ensure that project managers in your organization have
their marching orders, and find committed partners to assist in your growth.