PULSE-AI study confirms: higher footfall does not generate more sales

It is currently the most comprehensive analysis WHATALOCATION has carried out on the influence of increased footfall on sales performance in stationary retail: Over 5,400 stores in 17 European countries were analyzed to determine the impact of footfall dynamics not only on total sales, but also on the hourly number of receipts, the amount of those receipts and the number of products per receipt. In these four categories, stores from a wide range of retail sectors in shopping streets, shopping centers and retail parks were examined in equal measure.

The Methodology of the Study

WHATALOCATION has receipts with all the details and metadata for each of the more than 5,400 stores. This makes it possible to track exactly what was purchased and when. In order to carry out the same data analysis across Europe, all data must first be normalized and translated into an index (0-10). This is then also scaled according to the Europe-wide dynamics so that, for example, purchasing behavior in Prague can be compared with Berlin. It is more difficult with pedestrian frequencies, as these are not available in all countries based on the same data collection method. This is where WHATALOCATION used Google's Popular Times. This globally accepted data is collected everywhere using the same methodology, providing a valid foundation for our study. We can calculate the hourly correlation with these two data sets and create a long-term trend line on a per quarter basis. This analysis pertains to Q2 2024 and will be repeated every quarter.

Which categories were examined?

We chose four different sales performance categories to provide deeper insights. For example, if a supermarket produces significantly more receipts than usual at lunchtime, but the average receipt drops by 72%, it could be because we’re dealing with office workers buying their daily lunch rather than their weekly groceries.

  1. Turnover Q2 2024: How much total turnover was generated per hour on an average weekday (Mon-Sun) of a quarter?
  2. Number of receipts: How many receipts were created per hour on an average weekday (Mon-Sun) of a quarter?
  3. Average receipt size per customer: How many receipts were created per hour on an average weekday (Mon-Sun) of a quarter?
  4. Number of products per receipt: How many products per receipt were sold per customer per hour on an average weekday (Mon-Sun) of a quarter?

The results

For obvious reasons we can’t publish detailed results per sector or customer, as the results could be attributed to individual brands. However, we noticed patterns across industries and location types when comparing all the data.

  1. For around 71% of the more than 5,400 stores, total sales per hour have a very weak correlation (≈0.04) with the dynamics of visitor numbers. This means that the absolute majority would not benefit if the locations were able to attract more visitors.
  2. The number of receipts shows almost the same picture. A weak correlation (≈0.21) to footfall was found in around 68% of all stores.
  3. The more people visit a location, the fewer products individual customers buy. Around 79% of all stores exhibit this behavior. A negative correlation of ≈-0.31 clearly shows that there is some catching up to do here.
  4. The number of products purchased per capita is similar to receipt totals per capita.

Additional General Insights:

  1. Eastern European countries benefit the least from more footfall. In some cases, it was found that more visitors automatically lead to lower sales.
  2. Correlations predominantly fall on weekends.
  3. Shopping centers have a weaker link between sales and visitor behavior than stores located on high street or in retail parks.
  4. The average correlation of all approx. 5,400 stores in relation to "Is my turnover dependent on the number of visitors?" is only 0.12, which points to a very weak correlation between the two.A lot of food & beverage establishments should review their opening hours, as there are assumptions that they close too early and open too late

Interpretation of the Study

The facts are on the table and a sufficient mix of location types and retail sectors was analysed. The patterns are clearly recognisable. Of course, there are exceptions to all locations and to all sectors, but the result is clear: footfall does not appear to be the holy grail.

But what could be the reason why fashion stores sell fewer products per capita, the more visitors they have? Do they need more staff to provide customers with better service? Do there need to be more changing rooms? What are the cultural differences between countries?

Retailers can no longer rely on the fact that many visitors automatically lead to more sales. Very few stores in the study show a strong or very strong correlation in the four categories analysed. One must deliberately seek out these locations to be able to find them among the more than 5,400 locations.

It’s worth taking a closer look at the opening hours. There seems to be cause for scrutiny here, particularly in Germany and the western European countries.

So Which Factors Actually Boost Sales?

This answer cannot be generalised for every brand. For WHATALOCATION users, one thing is clear: if the footfall analysis is placed alongside the success analysis (available in the app Sales Manager), additional patterns emerge. The connection to the local infrastructure and a healthy retail mix often play a very important role. The correct consideration of anchors and competition also plays a role. What’s the level of saturation in any given sector? What’s the tenant mix like in a mall? How high is the proportion of regular customers?

Retailers who think innovatively and skilfully combine online and offline retail are more likely to convert visitors into customers. But let's always bear one thing in mind: footfall is only ever the answer to what’s being offered. If there is no desirable offer, there won’t be visitors. The mere observation of these values says nothing about the quality of the location.

If you would also like to find out what actually makes your branches successful, please get in touch.

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