9.3 Offline sales and customer service
From traffic conversion rate to average transaction value, operational KPIs are derived from the sales forecasting plans (from Course 2) to meet the brand’s end-goal. You, as an operations manager, ensure the team meets these goals.
Setting operational KPIs
Under operational KPIs, there are a few metrics:
- Daily target – From the sales forecast, operations manager break the numbers down into a daily target.
- Average transaction value (ATV) – The average dollar amount spent in a single transaction.
- Unit per transaction (UPT) – The average number of products sold in a customer’s transaction
- Traffic conversion rate – The number of visitors that become paying customers
In offline retail, traffic to the store is often referred to as ‘footfall’ – how many people walked into the store. However, it can be hard to pinpoint the exact number that entered the store.
Purchasing a footfall monitor helps (larger corporations subscribe to this service), but the data can be distorted when there’s a huge number of people. Often, employees have to manually count by a formula:
In order to convert customers (to achieve the daily targets for each metric), proper preparation must be enforced. Visual merchandising is a way to do it, but the biggest touchpoint would be the sales associates (staff).
Which is why the operations manager and supervisors have to both:
- Motivate staff with incentives
- Equip staff with proper training
Incentives can come in many forms – it can be a commission-based structure for payroll or rewarding with bonuses.
An example of a typical commission-based structure – if a staff hits 100% of daily target, he or she gets a 5% commission of the day’s total sales. If the staff over-achieved the daily target by 10%, he or she gets 8% commission of the day’s total sales.
Training to store staff is important as they are the brand ambassadors, also serving as the first touchpoint for the customers. Key pieces of training include selling techniques, product knowledge, fashion styling tips and personal grooming.
In retail, not only newcomers and sales associates have to receive training, but you as a manager also require constant training on product knowledge and selling techniques.
An example of a selling technique would be to carry out the role of a personal shopper. If the consumer expressed interest to look for an evening gown, the sales associate can bring a variety of evening gowns in her sizes and upsell with matching accessories.
The training includes employing a good customer service too. It doesn’t only elevate a brand image, it directly impacts operational KPIs too. This is because consumers are more likely to return to make another purchase or spread good word-of-mouth.
If a customer complaint is not handled well, it could snowball into a PR crisis – which could deter future consumers from shopping in the retail store.
Key questions to answer are:
- How should a staff greet customers?
- What should a staff say when there is no size or colour of choice?
- How should a staff deal with customer complaints?
Ensuring that any returns or exchanges are a seamless and hassle-free experience is vital too. This buys brand loyalty – which ties back to the original point. Consumers are more than happy to return if they have a good experience in the store.