Alan O’Neill

A new three-part series on boosting retail sales,

Leading change management consultant

Alan O’Neill has advised top Irish and international retailers on how to enhance their businesses. In this three part series he explains his formula: footfall + conversion + average transaction value = sales. This week he explores footfall and share advice and gives some tips on how to boost customer numbers for your business

RETAIL has suffered more disruption than most sectors over the past 10 years. From single channel, to multi-channel and now to omni-channel, Irish retailers have to reinvent how they do things. Online sales are growing as customers become more used to transacting online. And Amazon is a ferocious and formidable competitor that has spread its tentacles across all retail segments around the world.

We can’t ignore the positives of online retail. It permits transparency of pricing across currencies and countries. It enables convenience by being open 24/7 and less effort with deliveries to the customer’s door. But that is not all that matters to customers. Thankfully, there is a larger cohort of people who still derive pleasure from in-store experiences that are informative, accessible, inspiring and entertaining.

Online retailing will not go away. It is a new wave of competition that’s here to stay. But so is other competition for disposable spend, such as restaurants, holidays, cars and new kitchens.

Many retailers feel beaten up with all the changes and many more have lost sight of their ability to still compete effectively.

“The categories that are impacted most in Ireland by on-line are fashions, jewellery and footwear,” said Lorraine Higgins, CEO of Retail Excellence Ireland. Yet, I notice that there are new independent stores in these categories opening in Ireland and competing very effectively.

I believe that much of this is to do with mindset and the feeling of being out of control. Over the next three weeks, I would like to reboot and refresh that thinking and encourage independent retailers to stand back, go back to basics and focus on what can be done to compete effectively.

The fundamental sales levers for any retailer are locked in this simple formula.

Retail Sales Formula: F x C x A = S

The (F) is ‘footfall’. That refers to the number of people who enter your store. But we know that retailers get many browsers and they don’t all purchase something. Retailers can, however, influence ‘conversion’ which is the (C) in our model. Similarly, a retailer can also influence the ‘average transaction value’ for each customer, which is the (A) above. These three factors multiplied, give you your Sales, (S).

For example, imagine if you have 300 customers in a week (F) and 40pc of them are converted (C), spending an average (A) of €50 each – that delivers sales (S) of €6,000.

These three pillars act as signposts for a retailer to make considered decisions in order to increase sales in store. This week I will cover footfall — in the following two weeks I’ll cover conversion and average transaction value.