It can be difficult and expensive to constantly attract new shoppers to your store. That's why one of the most effective ways to increase your profit margins is by getting the shoppers you already have to simply buy more.
Luckily, there are several ways to increase purchase value in retail; from a strategic store layout and product placement to point of sale promotions and more. In this post, I will explore some of my favorite tips and tricks on how modern day retailers increase their average transaction values (ATV) in physical stores.
First and foremost, before you start strategizing on how to increase your ATV, you need to understand what the metric means. The ATV metric is calculated by dividing the number of sales over a given period by the number of transactions over the same period. If a store has a low ATV compared to other stores - or even its own recent past - there can be a variety of possible root causes, and, as such, a variety of possible solutions.
Maybe your store has become overly reliant on discount promotions, or sales associates are more comfortable selling lower-priced SKUs. Or, perhaps, sales associates are lapsing in selling additional items, such as accessories. Whatever the reason may be, tracking your POS information plays a vital role in improving upon the performance of your store.
Both upselling and link selling utilize the same general skills from a sales associate: the ability to understand what your shopper wants and needs, and then educating her on the solutions - and corresponding benefits - you can provide.
Upselling is showcasing the advantages of a more expensive item. If a shopper is looking at a medium-priced handbag, for example, an upsell will focus on the benefits to be realized by a more top-of-the-line, and more expensive, handbag.
The technique of link selling, or cross-selling, is ultimately encouraging the purchase of accompanying products and services that make the initial, primary purchase more valuable.
For example, a mobile phone might come with an offer of a new mobile phone cover, or a printer purchase might prompt the suggestion for replacement ink cartridges and paper.
What's important to remember, however, is your associate's goal should not be "make more money for the store," but rather "provide more value for both the shopper and the store." That goal gives them the empathy to suggest the right products to your shoppers which will positively impact customers' overall shopping experience. Remember, what's good for shoppers long-term is good for your business!
A very simple way to increase a shopper's purchase value is to offer free shipping on items that aren't available in store. This way, you won't lose out on a purchase or part of a purchase just because you can't physically hand the shopper an item in the moment.
But remember, before implementing and marketing this new offer, make sure all sales associates are up to date with the new business model by ensuring the terms and conditions have been clearly communicated.
The way you layout your merchandise in your store can have a significant effect on the purchase value. This can be done through the use of display stands, wall graphics, posters and banners and other types of fixtures.
Once you have created engaging displays that create a sense of urgency, value and excitement, focus on where each feature will be located in your store. For example, look at selling small, fast moving goods such as gift cards and stationery at checkout points.
Another merchandising technique to consider is to pair items that sell well together throughout the store. Grocery stores, in particular, have gotten really good at these kinds of displays. A fun example of a retailer doing this correctly is Tesco. Tesco got quite creative after they realized a large portion of their shoppers buying diapers were fathers. The retailer began displaying beer and other snacks typically bought by male shoppers in the same aisle and saw an immediate increase in revenue.
Lastly, reduce the amount of stock available on the floor. Keeping inventory levels down on your floor creates an atmosphere where shoppers will need to engage with a sales associate in order to find their item/s, thus ensuring a great opportunity to upsell or link sell.
Offering additional products or services to every shopper right at the POS is one of the simplest, most instant and predictable techniques for increasing your ATV.
Make sure your POS easily integrates new promotions into the system and focus on getting creative! Some of the standard strategies include offering a discount for larger spends, buy one get one at a discount deals and product bundles. But these can come in any number of forms.
Increasing your ATV takes a little work, but once you get the ball rolling, you'll start seeing results. Hopefully, this post brings you closer to doing just that.
Join the #retail, #inspiringretail and #SmartStore conversations on Twitter @TalithaLoftus & @RetailNext, as well as at www.
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Talitha Loftus, RetailNext
By Bob Phibbs
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Your success as a retailer depends on increasing your metrics like units per transaction (UPT) and conversion rates. The only way to do that is by creating customer relationships. A customer who is enjoying their experience in your brick and mortar retail store is easier to up-sell and more likely to purchase add ons.
That's what raises your UPT - customer relationships that turn browsers into buyers, and buyers into repeat shoppers.
You know that, right?
Yet as important as they are, many brands entrust their customer relations to a sales staff without any training.
I hope that’s not you…
Your sales force is the first point of contact a customer will have with your business.
It used to be you could hire people with selling skills.
It used to be being a salesperson wasn’t a bad thing.
It used to be that retailers had extensive training departments that drilled sales performance and key performance indicators (KPI) like UPT.
That’s not now.
No matter the size of your retail business, you need to be giving your employees the tools they need to build real relationships that can increase product out the door.
Putting the person back in salesperson
Retail sales training can teach salespeople every step of the sales process-beginning with approaching and engaging the customer in a genuine, human manner.
Once the sales associate connects with the shopper, they can use the rapport they've built to start selling your merchandise. And a customer who is having an exceptional experience is less likely to try and haggle over cost.
But it's more than that, it's about being able to up-sell and add-on to every sale to increase average transaction size.
Sales isn’t an art, it’s a science. A sales associate learns the basics, tries their new skills in a positive environment, and continually works to tweak and develop their own authentic style within the company culture.
That involves psychology and a host of other skills that can’t be learned from a book or three-ring binder full of faded and messy training materials.
Learning to Do it Right
Online sales training can give your entire sales crew the skills they need to turn boring shopping trips into great ones.
My interactive online sales training, SalesRX.com offers a convenient way for you to provide the necessary training for your retail employees, without disrupting your day-to-day operations.
Training doesn’t happen in a vacuum and can’t be accomplished overnight. It takes time and effort to absorb, implement and properly execute the information.
It also takes holding them accountable to actually use the training you provide.
In Sum
Let’s be honest, regardless of their past experience or on-the-job training, few salespeople will provide your customers with a bad experience.
Sure, they might not be the most engaging, but most can ring someone up and not be offensive.
The problem is that without the proper training, few of them will provide customers with an exceptional experience.
And in a world of mediocrity, only exceptional will pay the bills.
And in a post-pandemic world, paying the bills is primary.:format(webp):no_upscale()/cdn.vox-cdn.com/uploads/chorus_asset/file/19829235/at_risk_jobs_by_industry.jpg)
Once customers have had a positive experience, they’re also more likely to return to your store for future purchases. Again, these positive sales experiences and increased customer retention rate all hinge on your salespeople being able to build solid customer relationships built on authenticity.
Your goal is for them to be trusted advisors in the selling process if you want to raise your units per transaction.
That doesn’t come naturally.
Formula
Receipt complexity (UPT) = number of goods sold / number of receipts
luxury segment above - 2-3. The important thing in working with complexity is to give the buyer the illusion of profitability and savings; its increase directly affects the increase in the average check.
HOW to increase complexity
Sale of related products (cross sell). It is better to sell such goods at the checkout after the client has already chosen the primary goods.
Family pack goods are goods sold in packs of several. You can also sell the same product in different colors at a discount.
"Growth prices". It works well if you convince the buyer of the attractiveness of the price. There are psychological tricks - for example, leveling the price by product segments; the main thing in the method is to convince the buyer of the profitability of the offer. nine0003
"Symbols". It is also important to suggest that you need to take a lot of goods; works on an unconscious level: for example, large baskets, a large number of booths in the fitting room, wide counters, changing the exposure suggest the buyer to think about large purchases and lead to increased sales.
Promotions with a step-up discount, 50% promotions on the second item. The conditions of the promotion should be of interest to at least a third of customers.
Promotions with similar mechanics should be launched before the sales start.
SMS notifications about store updates. Maintaining communication with the client within reasonable limits allows you to increase the attractiveness of the store for him. nine0003
Sale promotions. Often, during the opening hours, a pool of customers is formed at stores who are ready to buy goods only at a discount. Such customers will help to activate sales after the start of the sale. It is important to consider that if the discount does not increase the number of units sold, then the revenue will be lost: incentives only work when the store requires more from the customer than what the customer is ready for. The main factor is psychological, you need to be able to convince the client that your price is profitable. nine0003
Betting on a highly profitable client. It is necessary to analyze the customer base and determine what products and in what quantity can be sold to a wealthy client who is able to purchase a large number of things.
Staff motivation: KPI, performance indicator, contests. It is necessary to explain to sellers what complexity is, to give them simplified information. You can turn on competition within one day or between different shifts, but not longer than a month - it becomes difficult to keep the attention of employees in a long time period. nine0003
Sale of total look and effective assortment combination. It is necessary to form an optimal assortment matrix, choose the right proportions between assortment groups, and ensure the compatibility of the clothes presented in the store.
Would you like to know more?
Soon we will start the course "Retail fashion store in the era of Instagram".
How to increase sales in stores and showrooms when Instagram is changing everything in the industry. How to attract visitors from the Internet, optimize the assortment, increase the average bill and conversion to sales. Representatives of iconic stores and brands will tell about this and much more.
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Learn more
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Average Transaction Value (ATV) is an important financial metric for companies that that provide products and services. This indicator is also important for monitoring the effectiveness of the sales process. In addition, an increase in ATV often leads to an increase in revenues and profits. In this article, we'll discuss what average transaction value is, why it's important, how to calculate ATV, and tips for increasing this important metric. nine0003
In retail, average transaction value is a key performance indicator that measures how effective a company's sales operations are.
ATV can also provide insight into the performance and productivity of sales teams. Many companies often measure ATV along with other important sales KPIs such as units per transaction (UPT) and sales conversion rates. You can calculate ATV by applying a simple formula:
ATV = (total sales) ÷ (number of transactions)
Dividing total sales revenue by the number of transactions in the period being measured gives you the average transaction value.
Your company's ATV is important because it measures the overall performance of sales teams and each sales process. Let's look at a few more reasons why measuring ATB is important:
Average transaction value is important for understanding how sales teams approach customers, sell products and services, and drive sales to customers. ATV provides insight into how effective the sales strategies and methods that teams are using to encourage customer purchases are.
If ATV is low, companies can implement various support strategies to improve team performance. A higher ATV score may indicate that sales teams are using successful approaches and best practices to increase sales and increase revenue. nine0003
ATV metrics are also important for monitoring each stage of the sales process to ensure the effectiveness of various operations. For example, companies can evaluate the success of various customer touchpoints to understand how these tactics support sales transactions. Understanding how effectively the sales process works to acquire, attract, and attract new customers can help your organization improve performance in these areas to increase sales. nine0003
A company's profitability depends on its ability to generate sales and revenue. While more sales transactions can lead to higher revenues, a higher ATV often means companies make more profit per customer transaction.
Since ATV calculates the average amount a business earns per sale, it can evaluate this figure to determine the most effective strategies to encourage customers to make larger purchases. nine0003
Average transaction value is also important for financial analysis and budgeting. Companies often evaluate ATVs to understand how marketing and advertising processes are attracting and converting customers. ATV can provide insight into your organization's ROI on marketing or advertising spending by showing you which strategies are most beneficial for customer acquisition. Generally, a higher return on investment in marketing and advertising indicates an increase in customer conversions and sales, resulting in a higher ATV. nine0003
To calculate ATV, follow these steps to apply the formula:
Determine the period for which you want to measure ATV.
For example, some companies track ATV monthly, while others may track ATV every quarter. During the period you are measuring, determine the total amount of your company's sales. Use this value in the formula for the total sales. As an example, suppose a business determines sales revenue of $10,000 for a period. This value is used in the formula:
ATV = (total sales) ÷ (number of transactions) =
ATV = ($10,000) ÷ (number of transactions)
ATV = (total sales) ÷ (number of transactions) =
ATV = ($10,000) ÷ (465)
Once you know your sales revenue and number of transactions, divide the two using the formula. Using the previous business example, the calculation results in:
ATV = (total sales) ÷ (number of transactions) =
ATV = ($10,000) ÷ (465) =
ATV = $21.
51. nine0003
When calculating ATV, analyze the results to understand how this value supports your company's revenue and sales goals. Companies can evaluate an effective ATV that shows overall sales performance and profitability. However, this value ultimately depends on the type of products or services the company provides to customers. For example, a luxury home goods company might find a $21.51 ATV too low, while a small coffee shop might find a $21.51 ATV profitable. nine0003
Increasing your average transaction value is essential to generating revenue and profit. In addition, ATV may depend on the efficiency and success of sales teams. To increase your ATV and maintain higher profitability, consider the following tips:
Invest in sales training. Giving sales teams the opportunity to improve and develop new methods and skills can lead to more effective best practices leading to higher customer engagement and conversions.
