Conversion rate for retailers is simply a means to calculate the percentage of how many people bought something from your store versus how many people came in. For example, if you had a promotional sale on all any products that contained the letter 'B' (we're not judging) and you had 200 people enter your store, but only 30 bought something - you would have a 15% conversion rate.
How did you get that?
The formula for calculating your conversion rate is the total amount of people who entered your store divided by the amount of people who bought something. Does that seem overly simple? It really is, but you run in to some dilemmas when it comes to practicality. Do families count individually or as a group - especially when only one person bought wiper blades. What if one of your associates took a sale, but you were distracted and didn't note it and your numbers are skewed? This is generally where a people counting system comes in to play, but more on that in a moment.
Okay, so my conversion rate is 15%. Now what?
Conversion rates will vary on a number of factors. It's important to consider that when plotting your conversion rates. Knowing your conversion rates should be for a general, overall understanding of your store's interaction with customers.
High conversion rates - 90% - would be amazing, but generally speaking, that only happen at gas stations or convenience stores, where almost everyone buys something and it's usually individuals paying for their items. A specialty department store will generally expect around 30% - 40%.
You will want to plot your conversion rates out over an extended period of time. The benefit for recording this information is that you can start to recognize patterns of what people are interested in and when sales seem to be the highest. Some markets have days where they are busier - for example, movie theaters tend to have many more patrons on Friday or Saturday night, and especially on a Friday where most people have received paychecks. You can use this information to decide what promotions you may want to offer at these particular times and when the business wanes and you should focus on other tasks.