If you’ve landed on this post, we’re willing to bet that you’re looking for the lowdown on people counting.
Maybe you’re a retailer who wants to measure the number of visitors in your location. Perhaps you’re a facility owner who’s curious about the different ways to measure foot traffic.
Whatever the case, this post can help.
We’ll shed light on the ins and outs of tracking foot traffic (aka people counting) and discuss everything you need to know — from why you should measure it to the various solutions you can use to gain more insights into your visitors.
Let’s get started!
What is foot traffic?
Let’s kick things off with the definition of foot traffic.
Foot traffic is the measure of people who physically walk in and move around in a given location (e.g., a retail store or facility). It’s sometimes referred to as “pedestrian activity” and it’s a metric that’s typically used by retail store owners and landlords to measure the performance of a commercial location.
The more foot traffic a business gets, the busier and (usually) the more successful it is.
Think of foot traffic as web analytics, but for the physical world. In the same way that websites track the number of “hits” or visitors that land on their page, businesses that run physical locations can — and should — measure the number of visitors that come into their shops or buildings.
Why is counting foot traffic important for businesses?
People counting is a must for just about any type of business that runs a physical location. When done right, tracking your visitors will lead to more streamlined operations, smarter business decisions, and better customer relationships.
Let’s take a closer look at the benefits of using a people counter.
➣ To better understand customer behavior
It will help you get to know your customers better. You’ll gain insights into when people visit your stores, how long they dwell in your location, and the specific areas that they frequent.
In some cases, you can integrate your people counter with your POS system to measure conversions.
All that data will allow you to thoroughly understand your shoppers, so you can come up with initiatives and campaigns to serve them better — and attract even more customers.
➣ To optimize your staffing
Retail staffing requires balance. You want to have enough people on the floor to serve shoppers, but you don’t want to over-staff your store and put too many employees on the payroll.
Counting guests can help you strike the right balance.
Retail analytics solutions shed light on when you have the most and least number of guests in your location. That, in turn, helps you iron out your staff’s schedules, so you make sure to have the right number of people on the floor at any given time.
➣ To measure and improve your marketing efforts
Are your Google and Facebook ads driving more store visits? Are your window displays resonating with your audience?
The best way to answer these questions is to track your foot traffic performance during the duration of your marketing campaigns.
If you’re running a number of advertising campaigns for your store, then you should measure your guest count to see if the ads had any effect on your physical store visits.
It won’t be an exact science (marketing attribution is notoriously tricky), but you will have some indication of the success of your campaigns, which will help you decide if a marketing channel is worth the investment.
➣ To understand external factors that affect your business
Not everything is within your control but it’s worth identifying the external factors that impact your visitors, so you can prepare and optimize your efforts.
Having a solid people counter will allow you to understand how things like the weather and other trends are affecting your business.
Let’s say there’s a big week-long event happening in your city, and you quickly notice a spike in traffic due to more people visiting the neighborhood. Armed with this knowledge, you can create offers to attract even more pedestrians to your store and capitalize on the event.
➣ To assess and compare the performance of different retail stores
This particular point speaks to retailers with multiple stores. Foot traffic should be one of the metrics that you look at when measuring and comparing the performance of various locations.
If you know that certain stores are consistently getting more visitors, you can dig into what makes those locations successful and apply the same ideas to your underperforming stores.
➣ To evaluate potential business expansion opportunities
Foot traffic is a handy metric to have when you’re looking to expand to other locations. Being familiar with your existing visitor data will give you benchmarks that you can use when evaluating other retail spaces.
Retail foot traffic statistics and trends
While foot traffic data will vary widely depending on the type of retailer as well as where they’re located, it’s worth looking at general trends so you’re aware of how the industry is doing as a whole.
Here are some noteworthy facts and stats about retail foot traffic you should know about.
➣ Foot traffic in enclosed malls peaked in August 2018, but has started to decline.
CNBC reports that one of the reasons for this is the fact that some retailers are pulling back on discounting.
Ecommerce was also cited as a possible reason for the decline, as more purchases are moving online.
➣ But don’t lose hope: the holidays are coming
According to Retail Touchpoints, grocery stores will likely see a spike in foot traffic on the days leading up to Thanksgiving 2019, as people prepare for their feasts.
Beauty retailers are expected to see a 10% increase in foot traffic before Thanksgiving, "due to shoppers making sure they look nice on the holiday".
RTP also reports that on Thanksgiving Day, big box stores will likely see a 34% increase in-store visitors. As a result, retailers situated near these stores will likely see a spike in traffic as well.
Which big box stores will see the most visits? Data cited by Forbes indicate that in 2017, Walmart came out on top, capturing 11% of all Black Friday retail visits. Target, which captured 7.1% of traffic, came in second, while The Home Depot and Lowe’s came in at third and fourth, respectively.
The bottom line: retailers experience several peaks and valleys when it comes to their store visits. Visitor trends aren’t always easy to predict, because there are numerous factors that can impact retail foot traffic.
And this brings us to our next point...
What are the things that affect foot traffic for retailers?
Retail footfall can be affected by an array of factors. Some of them are within your control, while others… not so much.
But it helps to be aware of the things that can impact your store visits, so you can be proactive with your decisions.
The weather can influence everything from the mood of your customers to the products they want to buy. As such, you should pay attention to how different weather conditions affect your location.
For example, if you know that low temperatures keep your customers at home, then you can launch a specific cold weather marketing campaign to encourage people to go out.
The city, neighborhood, and even block in which your store is located can impact the amount of foot traffic you have, as well as the type of visitors you attract. A retail store in a tourist spot will attract a different guest profile than, say, a shop that’s located in the business district.
It’s important to look into a location’s pedestrian profile and traffic potential, as that knowledge will help you make decisions on where to set up shop and the types of initiatives to implement.
➣ The economy
The state of the economy directly impacts people’s willingness and ability to go out and shop. When the economy is doing well and consumer confidence is up, you will likely see an increase in footfall. But the opposite can happen during a financial downturn.
➣ Type of business
The amount and type of guests you attract will also depend on your business type. If you’re a small clothing boutique, you shouldn’t expect to get the same number of visitors as a large supermarket.
Knowing the average visitor counts for your specific industry or vertical will help you gauge the performance of your stores.
You need to keep a close eye on different seasons and shopping events throughout the year, as they can greatly influence your foot traffic.
Holidays such as Mother’s Day, Memorial Day, and Christmas typically drive more store visits. Understanding how these days impact your business will allow you to capitalize on them effectively.
➣ Trends and demands for certain products
Consumer and pop culture trends should also be factored in. From clothing and accessories to gadgets and toys, various trends go in and out of style, and the things that are “in” attract more demand — and visitors.
Paying attention to what’s trending in your industry will help you make decisions around merchandising and marketing, so you can boost your traffic and sales.
➣ Marketing efforts of the business
Unlike most of the things mentioned above, marketing is a factor that’s completely within your control.
Things like your marketing channels, content, and budget all come into play when driving footfall, so strive to continuously measure and optimize your campaigns.
➣ The look and feel of a store
While we’d like to preach that it’s only “the inside that counts,” the fact of the matter is that customers judge retail stores by their physical appearance.
The more attractive a store is, the more traffic it’s likely to get; so strive to keep things in top shape.
How businesses can use people counters
As mentioned earlier, virtually any type of business with a physical location should implement people counting.
That being said, the use cases for foot traffic solutions will vary, depending on the type of business you have. Let’s take a closer look at how different businesses can leverage people counters.
How can small businesses use foot traffic solutions?
People counters can help small businesses make more informed decisions. With the right insights, they can determine the best times to open and close, when to hire additional staff, and which marketing channels to invest in.
Storeowners and managers can also use retail analytics to gauge the performance of their shops.
For example, a mom and pop store could connect their people counter to the POS system, and from there, measure the number of sales they’ve generated from their seasonal marketing campaigns.
All those insights can lead to ideas on how to increase footfall and conversions.
Here’s the good news: retail analytics solutions have become quite accessible for small businesses. Dor, for example, offers people counting capabilities that use thermal technology and machine learning — at rates that are affordable for independent and medium-sized retailers.
Click here to discover how a people counting solution like Dor can help you make better business decisions for your retail store based on its foot traffic data.
How can enterprise retailers use people counters?
People counting solutions can offer similar benefits to enterprises, but at a larger scale.
When it comes to decision-making and operations, large retailers can leverage retail analytics to implement employee-based scheduling and ensure that all their stores are adequately staffed. Some enterprises are even using scheduling algorithms based on foot traffic data to automatically optimize their store staffing.
Additionally, retail analytics can help large merchants measure the impact and effectiveness of their marketing campaigns. Companies can better understand their ROI as well as compare how their marketing efforts are doing across various markets.
Speaking of comparisons, enterprises can also use people counters to gauge and analyze how different stores are performing.
Guest counts, along with metrics like conversions, revenues, transaction counts, and basket sizes can give businesses a clear view of their top-performing stores as well as the locations that aren’t doing so well.
This, in turn, allows companies to make more intelligent decisions around store openings and closures.
In addition, enterprises can also incorporate AI and predictive analytics to forecast foot traffic. Some are even connecting their people counting solution to their data centers and retail management system. By tapping into historical data and combining their findings with intelligent insights, retailers can predict — and prepare for — future market conditions and trends.
In terms of deployment, large, multi-store retailers can kick things off by pilot testing a people counter solution in just a few stores. That's what the automotive retailer 4 Wheel Parts (4WP) did when they evaluated Dor's retail analytics platform.
4WP decided to test Dor in 3 locations for a period of 2 weeks to make sure they understood the data and determine if the solution was a good fit. The 4WP team liked what they saw, so they decided to deploy Dor across all their 93 locations.
The process itself was efficient and went better than expected. “I anticipated a variety of questions and feedback from our store managers...but it just went smooth,” remarked Evan Keller Senior Director at 4WP. 4WP was able to deploy over 50% of the sensors within 24 hours, and the system was deployed in all 93 locations in just over 33 hours.
The takeaway? Implementing a people counting system in an enterprise business doesn’t have to be a long, complicated process. With the right partner, large companies can get up and running in a day or two.
Click here to discover how a people counting solution like Dor can help you and your team make better business decisions for your different locations based on their foot traffic data.
How can facilities use people counting solutions?
People counting solutions aren’t just for retailers. Facility owners and managers can leverage footfall data to understand space usage, maintain facility operations, and strengthen security in the building.
Building owners and managers can tap into foot traffic data to spot occupancy trends and figure out when and how different spaces are being used. Traffic and occupancy insights lead to smarter decisions on resource allocation, maintenance optimization, operations, and more.
For example, an office manager can evaluate foot traffic in the common areas of the building to find out when and how people are spending their time. The manager can then use that information to make various decisions, such as how much supplies to order, when to schedule maintenance checks, when to open and close, and more.
From a security planning standpoint, foot traffic solutions can help safety and loss prevention professionals monitor building usage and unauthorized access. While employee cards and swipe badges can be effective in clocking people in, they don’t offer much insight into how the space is being used.
People counters — particularly those that offer thermal sensors and deep analytics — make it easy for security professionals to spot unusual activity and events.
Click here to discover how a people counting solution like Dor can help you make better business decisions for your buildings, facilities and office spaces based on their foot traffic data.
What are the different foot traffic solutions for businesses?
Now that we’ve discussed how to use people counters, let's look at the different technologies and solutions you can use to measure and understand traffic in your locations.
➣ Thermal sensors
Thermal sensors count and measure foot traffic by detecting the light emitted by human heat. These sensors are placed either on the top or side of a doorway, and they work by capturing the heat signature of a person’s head as they walk through.
Unlike other solutions, thermal sensors don’t capture any information that can personally identify guests, making them a great option for businesses that want to protect the privacy of their customers.
Dor uses a combination of thermal sensor and machine learning technologies which results in easy installation and affordable pricing.
➣ Video cameras
Video cameras can be installed in various parts of a location to track and record visitor activities. These types of systems can be expensive, though, so they may not be the best solution for SMBs.
Furthermore, since video camera sensors rely on in-store networks and need to be installed by technicians, they might not be the quickest solution for enterprise brands or facilities that have hundreds of locations.
And in order to get the most accurate data, video cameras require sufficient lighting and need to be maintained and calibrated regularly.
Breakbeam sensors use infrared to detect motion.
These devices are installed on either side of a doorway pointing to each other, and they each create an invisible beam. When someone walks through the doorway, that beam is "broken,” and this triggers the sensor to count the visitor.
WiFi technology can be used to count and analyze foot traffic by enabling guests to connect to the business’ WiFi network. A big downside, though, is that WiFi solutions can only count visitors who log into the location’s network.
Businesses using WiFi as a retail analytics tool should also be mindful of the types of information they capture, to avoid violating guests’ privacy.
➣ Bluetooth Beacons
Bluetooth Beacons work by transmitting radio signals that can get picked up by mobile devices. It may not be the most accurate people counter because it can only count visitors who have enabled Bluetooth on their mobile devices.
How to decide which people counting solution is right for your business
The right solution for your business will depend on your needs and objectives.
Here are some of the factors and questions to consider when deciding on which foot traffic tool to adopt.
➣ What types of data and insights will you get?
You want to make sure that you can extract the info you need, so get a full list of data points and reports that a solution can provide.
Will it let you count all your visitors or just the ones who have their phones on them? Can you view reports based on different time periods (daily, weekly, quarterly, etc.)? Does the system let you correlate traffic data with external factors like the weather?
➣ How long does it take to deploy the solution?
For obvious reasons, you want a people counting system that can be implemented quickly and efficiently. Be sure to ask vendors about their deployment process. Talk about how long it takes, how many people are required, and what you need to do to prepare.
➣ How much does it cost?
Ask the solution provider about their costs and pricing structure (e.g., one-time payment vs. subscription.) You should also factor in the cost of hardware, installation, training, and maintenance.
➣ Does it integrate with the systems you already have?
It’s best to have a system that “plays nice” with your existing solutions. Ask the vendor if their platform integrates with your current technologies — such as your POS system, CRM, or data management tool.
If you can get your people counter to “talk” to the systems you already have, it will be much easier to correlate different data points and get a deeper understanding of your customers and the trends in your business.
Do people counters violate customer privacy?
Consumer privacy is paramount in today’s retail and business landscape. Any type of activity that involves collecting visitor data can open up questions of privacy, so it’s important to factor it in when deciding on a people counting solution.
Certain people counting tools — video cameras, for example — are more prone to privacy violations because they record what people are doing, and possibly even their faces. WiFi systems that collect email addresses or use social media logins could also raise privacy issues.
To be clear, you can still use these technologies for people counting. You just have to be careful about what data you’re collecting and how the information is stored. And for solutions that use WiFi, setting up the proper disclaimers is key.
That being said, if privacy is a major concern in your business, you’re better off going with a system that doesn’t collect any personally identifiable information.
This is where technologies like thermal sensors come in handy, because they only use heat to count foot traffic. No personal information is ever collected, so there’s no reason for you or your guests to be worried about privacy violations.
What are the metrics to be measured to utilize foot traffic for better business decision making?
We’ve talked about how people counting leads to smarter business decisions. If you’re unsure of where to start and which specific metrics to track, here’s a quick rundown of the measures to look at:
Foot traffic - As mentioned earlier, foot traffic measures the number of visitors in a location. This tells you the total number of people who walk through your doors.
Conversion rate - Your conversion rate is the percentage of visitors who actually purchased something from your store. You can calculate it using the formula:
Conversion Rate = Number of Sales / Total Number of Visitors
So, if you had a total of 100 people in your store and 25 of them ended up buying something, your conversion rate is 25%.
Average transaction value (ATV) - ATV is exactly what it sounds like: it’s the average amount that people spend in your store. To calculate it, use the formula:
ATV = Total Value of Transactions / Number of Transactions
Let’s say your total sales for the month is $150,000 and you’ve had 300 transactions. Your ATV is $500.
Customer acquisition cost (CAC) - This refers to the amount of money you spend in marketing to acquire a new customer. The formula for this metric is
CAC = Total Marketing Spend / Number of Customers Acquired
For instance, if you spend $1,000 in marketing and got 50 new customers, your CAC is $20.
How do you increase foot traffic?
There are several ways to drive foot traffic to your location. From setting up attractive window displays to holding in-store events, there’s no shortage of ideas out there. The best way to figure out what works for you is to leverage retail analytics to understand your location, market, and audience.
Armed with the right data, you’ll be able to come up with campaigns and initiatives to increase footfall to your location.
Another pro tip is to use technology. The internet and mobile devices are your friends, and when used correctly, can drive more visits to your location. Tools like Google My Business, SMS marketing, and digital ads have proven to be effective in increasing foot traffic, so make sure they’re part of your marketing mix.
Need help measuring and increasing your foot traffic? Dor offers powerful people counting solutions that can help you understand your customers so you can optimize your store, staff, and marketing for success.
Click here to discover how a people counting solution like Dor can take your marketing and operations to the next level.