Over the years, retailers have used Same Store Sales (SSS) as a yardstick to measure store performances. It is a closely scrutinized metric since it gives an accurate picture around revenue growth and more importantly, the overall customer satisfaction levels and in-store experience. The current retail landscape marked by higher competition, fickle customers and digitization has made it all the more important for brands to focus on basics like improving same-store sales.
So, what exactly is same-store sales?
Same-store sales or comparable-store sales is simply a comparison of sales for a set of stores over a specific period. For instance, it allows brands to compare third-quarter revenue for 2019 with third-quarter revenue of 2017. If the figures of same-stores have increased from the previous year, then it means that the company is moving in the right direction. So it is important for companies to keep an eye on same-store sales figures to gauge how well they are doing.
Importance of measuring same-store sales
Comparisons between existing locations and new ones help companies understand and learn business trends and shape important and critical strategies; for instance, to take decisions around focusing on existing stores or going into expansion mode and opening new ones.
An increase in same-store figures is a good indication for investors because it helps them to evaluate how well the company is doing in retaining their customers. It also helps to boost the stock prices of a company. Whereas, a decline might indicate that customers are losing interest in their products or services or that new stores are cannibalizing business in existing locations. SSS typically affects stock prices; industry forecasts around the health and future success of a company.
Same-store sales also reveals missed opportunities; problem areas that can be worked upon and the type of process that can be set in place. These figures also help market analysts to find out the effectiveness of retail management and if they are able to convert existing assets into the revenue growth.
How to increase same-store sales
Know your customers
In today’s competitive world, it is extremely important to proactively know who your customers are, rather than being reactive and responding to customer feedback. There are various in store retail analytics solutions that will help you track frequent customers and the ones who spend the most. Loyal customers and repeat visits are critical factors in determining your same-store sales.
Analyzing in-store customer behaviour using AI-powered footfall counters and empowering your store staff with clienteling solutions can further help you improve the in store customer experience through personalized engagement strategies. For example, if a frequent customer has fallen off the radar , your store staff can send them a personalized promotion to bring them back by making them feel important and valued.
Send promotions and personalized offers
You can send personalized offers to a targeted audience to increase footfalls during a slump. For example, if your business is slow in the second quarter, it might be a good idea to offer a 20% discount during this period to a select set of customers who have previously shown high purchase intent. This could go a long way in increasing customer loyalty and same-store sales.
Customers like to feel appreciated and valued by their favourite brands. Promotional offers and exclusive promotions targeted at them can go a long way in increasing the Average Basket Value, besides increasing the frequency of visits to your stores. The key to successfully execute such personalized experiences is an AI-powered Customer Data Platform that combines and refines online and in-store data to build a Single View of Customer.
Responding to customer feedback
Responding to customer feedback with immediacy is critical to the health of a company; and in terms of customer loyalty and increasing the revenues over a period of time. If there is positive feedback, then it means that the business is moving in the right direction. But, if the feedback is negative, it becomes important to address the concerns of customers positively. For instance, if there is continuous negative feedback about your staff, it becomes imperative to have a staff meeting and coach them about handling customers and also have a training program to address the gaps in performances.
Focus on the quality
It makes perfect business sense to review your products and services periodically, to find out how you can improve, provide additional value to customers and offer solutions that are innovative and creative. It is important to evaluate your offerings and find out what is working and what is not and why. With advanced people counters, you can understand the demographics of your visitors like gender, age so that you can tailor your products to appeal to a specific segment. High quality products and exceptional after-sales services will ensure a loyal and repeat customer, thus increasing same-store sales.
Hire the right staff
Investing in hiring the right staff who will do the actual selling of your products and services will have a major impact on your in stor experience. They should love their job, be glad to be where they are and know their products, like the back of their hand. Mike Eden, owner of the Ultra Gear Shop says “The staff should be knowledgeable and passionate about their products and should offer exceptional experiences to customers, the same as they have. They should share their passion with confidence.”
Offer your employees training programs from time-to-time, to upgrade their skills and bring them up-to-speed with the latest in retail trends. The staff should be able to identify customer needs, give them what they want and show them value in their choices. Brands should also invest in clienteling solutions and instant access to customer data via mobile apps for staff to help them track and engage with customers on an ongoing basis.
Understand & adopt the latest trends
It is important to keep an eye on the latest trends, understand what your customer wants, what sells and what does not. For instance, cashless checkouts, VR and BOPIS are some of the recent trends in retail. If your store does not offer customer experiences that are in sync with current trends, there is a chance of your comparable store sales taking a hit.
And more importantly, it’s important to understand what your customers are expecting from your brick and mortar stores. Is it the touch and feel aspect? Or personalized interaction? Or immediate delivery? Brands will need to understand the role of their brick and mortar stores in the overall omnichannel context and focus on enhancing the strengths of this channel. The more up-to-date you are with the latest trends, the better you will be in meeting customer needs, staying ahead of the competition, adding value and staying relevant.
Brands – often mistakenly – focus only on promotions and discounting to increase same-store sales. However, customer satisfaction and customer engagement are increasingly becoming important factors in boosting revenues and creating loyal customers. In order to improve same-store sales and increase Customer Lifetime Value, it is important to offer engaging and personalized customer experiences, invest in infrastructure and improve efficiency.