One Key Metric in Retail You’re Probably Not Measuring
Sorry to be the bearer of bad news, but you’re probably measuring the ROI of your physical stores wrong. It’s not really your fault, though. After all, space is traditionally rented using price per square metre and, when most businesses calculate the worth of a store, they often leverage sales per square metre as a key metric. It’s been this way forever, so many people don’t consider alternatives. The problem is, the retail space has changed. How we reach people, how we connect with our customers, and how we grow strong brands has changed.
Human Connections Are Worth More Than a Sale
If you’re actively engaged in online marketing, you know that there’s a process people follow before they purchase something from your business. They’re introduced to your brand, they engage with it, learn about it, and, if you’ve done a good job, they eventually make a purchase. But, the journey doesn’t stop there. Your most loyal customers purchase more often, spend more, and become brand ambassadors, giving you priceless word-of-mouth marketing. So you need to take care of them too. Sure, brands create funnels and find ways to engage their audience with the end goal of securing a sale, but the connections people make with the brand are ultimately what sells the products or services.
In the Digital World, We Call These Connections “Impressions”
CPM, which is short for cost per mille and references how much you pay per 1,000 people who may potentially see your ad on their screen, is the common term used in digital marketing. It doesn’t mean the person has taken any action with your brand or even seen the ad, only that it appeared on their screen and they may have seen it. The latest stats published in Chron show average CPMs in US dollars as:
$2.80 on the Google Display Network (YouTube, Gmail, etc.)
$5.76 on Twitter
$6.05 on LinkedIn
$6.70 on Instagram
$9.06 on Facebook
Older data places network television ads at $25.06, with newspapers starting at $28 and magazines at $8.40 per thousand impressions; numbers which no doubt have climbed. They’re not the only numbers which have scaled, of course. Ad spends on digital channels has been rising steadily, with Merkle recently reporting a 34% increase overall and cost per click jumping by 30% as well. Yet, the actual clicks businesses are getting aren’t rising in equal share, with the prior report showing just a 3% rise in clicks and some areas seeing a decrease now.
Visitors to Your Store and Footfall Around It Are Impressionable Audiences
What we often fail to see is that the people in and around our stores are impressions—they just happen to be real-life ones instead of digital and print impressions. That can be HUGE depending on where your store is located. Take, for example, Oxford Street in London. It was recently named the busiest street in London, with 13,560 pedestrians per hour. Rent there isn’t cheap, with some areas hitting £950 per square foot annually as far back as 2015. Assuming a 700-foot space, annual rent would be £665,000 or £1,822 daily. Paired with daily footfall (impressions) of 325,440, we now have a CPM of £6. A spot-on high street offers cheaper impressions than television, newspaper, magazines, and Facebook. It’s on par with running ads on Instagram, LinkedIn, or Twitter. And, that doesn’t include revenue—it’s purely based on impressions.
You Should Be Measuring in Impressions
Indeed, virtually all marketing channels use impressions and CPM as an essential metric, but that stops when you move into physical locations. In all likelihood, that’s because most businesses and landlords simply don’t know how much footfall they’re really getting. This is one of the things Popertee aims to change by enabling brands and landlords to measure success the same way they do via digital marketing, radio, and TV. With our new portfolio of tools, you can easily check the footfall of specific locations and even narrow the audience down by demographic info or interest categories, just like you would online. This can be used before making a decision to rent a physical location and in real-time as people visit a shop as well. Our data is now available at 50-metre radius for spaces in the UK, sharing analytics with marketers and retailers including footfall, age, gender and propensity to spend of audiences.
Value Increases with Engagement
Obviously, just having people see that your brand has a physical presence is valuable. That’s the power of an impression, whether in real life or through various forms of media. But, let’s take this a step further. We know that getting someone to engage with a video is more valuable than just having them see an ad. That’s why you’ll pay £80-240 per 1,000 people or £0.08-0.24 per person who watches your 30-second ad clip on YouTube. Let’s say the average person spends 20 minutes in your store. You’d spend £2.80-9.60 to get the same kind of exposure your physical location offers if you promoted via video. That’s nearly £10 just to get ONE person to listen to your message. Yet, many people with physical locations aren’t leveraging this priceless gift. They aren’t doing anything to make the stop memorable for the visitor or making the most of the time the individual is offering his or her attention.
Experiential Marketing Increases Value
Experiential marketing, or the concept of creating an experience for the visitor rather than just selling them something, is a vital component when you’re meeting with your audience in the real world. Given that you already have a captive audience when people visit your physical location or even pass by it for that matter, you have the perfect opportunity to leverage experiential marketing to increase the value of your location. Research shows that:
98% of visitors are more inclined to make a purchase after attending an experiential marketing event. The average person tells 17 people about visiting an experiential marketing event, 74% customers have a more positive perception of a brand after visiting an event 65% of marketers see a direct hike in sales after an event.
ABOUT THE AUTHOR
Lucinda Kelly did a BA Hons in Information Studies and French in University College Dublin and then continued her studies with a H Dip in Entrepreneurial Studies in Michael Smurfit Business School. She started her career in eircom where she managed the content and advertising for the portal. She then went on to Paddy Power where she held senior positions in product and marketing. Lucinda set up Popertee in 2016 from Ireland's leading tech accelerator, NDRC Launchpad. She closed a 500K seed round in 2017 and is based in London from Wayra, the Telefonica accelerator.