News: Your footfall in the mall's worth a packet
(TNN 13/04/2006) Mumbai - Ever felt guilty about taking a casual stroll inside a big shopping mall or a supermarket? You don’t have to. Your likely worth to the retailer could be well in excess of Rs 250. The likely sales per footfall in the departmental store format ranges from Rs 250 in a Pantaloon Lifestyle store to Rs 400 in a Shopper’s Stop or a Piramyd Megastore.
Even in a supermarket format, a single customer entry means a probable sale of Rs 250 in a Piramyd Trumart to Rs 320 in a Food Bazaar. The same figure goes up to Rs 350 to Rs 400 for a mass merchandise store like Central or Crossroads.
These figures are calculated by taking the product of conversion rate and customer spend. There are three basic drivers behind sales in any retail format (customer traffic, conversion rate and customer spend).
Customer traffic is simply the number of footfalls a retail store is able to attract. Conversion rate is the ratio of customers actually purchasing something to customers entering the store and customer spend is the average amount a customer spends on purchases. All three are equally critical in determining the success or failure of a particular retail format.
The average transaction size (or ticket size) in supermarkets is much lower at Rs 250 to Rs 400 in a supermarket format compared to Rs 1,000 to Rs 1,500 in a department store or mass merchandise store format. However, the conversion rate in supermarkets is around 75-80% against 25-35% in a department store.
Pantaloon, which operates in the supermarket format under the Food Bazaar brand, enjoys a conversion rate as high as 80% with an average ticket size of Rs 400. Trumart stores, operated by Piramyd retail, also report a similar conversion rate, with a ticket size of Rs 280. In the department store format, Pantaloon Lifestyle stores operate with conversion rates of around 25% and average ticket size of Rs 1,000.
Shopper’s Stop, the leading department store chain, reports a conversion ratio of 27% with average ticket size of Rs 1,400. However, the stand-alone stores have a conversion rate as high as 40%. This is impressive compared to European department store majors which operate with 25-30% conversion ratios.
But a lot of catching up remains to be done with the US majors as leading department stores there, like JC Penney and Kohl’s, have conversion ratios of 80-85%. Big Bazaar, a small-sized hypermarket, has a conversion ratio of 35% with an average ticket size of Rs 850.
Considering that the conversion ratios of global giants like Wal-Mart and K-Mart, which operate largely in the discount store format, hover around the 85-90% range, there is still a lot of scope for refining the art of turning casual strollers into potential buyers.
Even in a supermarket format, a single customer entry means a probable sale of Rs 250 in a Piramyd Trumart to Rs 320 in a Food Bazaar. The same figure goes up to Rs 350 to Rs 400 for a mass merchandise store like Central or Crossroads.
These figures are calculated by taking the product of conversion rate and customer spend. There are three basic drivers behind sales in any retail format (customer traffic, conversion rate and customer spend).
Customer traffic is simply the number of footfalls a retail store is able to attract. Conversion rate is the ratio of customers actually purchasing something to customers entering the store and customer spend is the average amount a customer spends on purchases. All three are equally critical in determining the success or failure of a particular retail format.
The average transaction size (or ticket size) in supermarkets is much lower at Rs 250 to Rs 400 in a supermarket format compared to Rs 1,000 to Rs 1,500 in a department store or mass merchandise store format. However, the conversion rate in supermarkets is around 75-80% against 25-35% in a department store.
Pantaloon, which operates in the supermarket format under the Food Bazaar brand, enjoys a conversion rate as high as 80% with an average ticket size of Rs 400. Trumart stores, operated by Piramyd retail, also report a similar conversion rate, with a ticket size of Rs 280. In the department store format, Pantaloon Lifestyle stores operate with conversion rates of around 25% and average ticket size of Rs 1,000.
Shopper’s Stop, the leading department store chain, reports a conversion ratio of 27% with average ticket size of Rs 1,400. However, the stand-alone stores have a conversion rate as high as 40%. This is impressive compared to European department store majors which operate with 25-30% conversion ratios.
But a lot of catching up remains to be done with the US majors as leading department stores there, like JC Penney and Kohl’s, have conversion ratios of 80-85%. Big Bazaar, a small-sized hypermarket, has a conversion ratio of 35% with an average ticket size of Rs 850.
Considering that the conversion ratios of global giants like Wal-Mart and K-Mart, which operate largely in the discount store format, hover around the 85-90% range, there is still a lot of scope for refining the art of turning casual strollers into potential buyers.
posted by InCar Group Press Room at 10:49
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