How to Increase your Average Transaction Value inside your Stores
The title of this blog post already gives a main point away and it makes sense right? Increasing sales and revenue is on the top of the priority list for many retailers. But what kind of strategies do different retailers chose, and which ones are out there? Of course, attracting customers to you stores is the most important thing to aim for, otherwise there is no one there to increase your sales.
But did you ever think about focusing on increasing your Average Transaction Value instead of having only an overall sales increase in mind? Everywhere you turn your head, you hear that physical retail is struggling with visitors, they need to find innovative ideas to win customers for themselves. Utilizing some tricks to make more money with less customers could save retailers a lot of headache. Let’s talk you through everything you have to know about the ATV!
What is the Average Transaction Value (ATV)?
Boosting your ATV is an ideal way of increasing the bottom line and overall success of your company. Therefore, ATV is the average dollar/euro/etc. amount that a customer spends with you within one single transaction or ticket. Generally, you can say that the higher your ATV is, the more income your company generated on each customer who made a purchase.
Why is this so important? It’s already hard nowadays to increase foot traffic in your stores. Physical retail has to face a lot of challenges and adding more value to customers who are already in your store, is easier and more profitable than to try to attract more customers into your store. You might be able to drive more traffic within your retail spaces, but who guarantees that they will also spend a certain amount of money?
Attracting a new customer is up to 7 times more expensive than keeping an existing one
1. First things first. Where to start from?
Get your numbers together. Do you know how high your average sale is in your store? Well, there you have a good starting point. Document the total sales of a typical day and divide them by the number of customers you had during this period. Saying for example that your ATV is $50 – after discovering this, you can set a whole new target and create strategies to reach the target. You want to implement strategies and work out how good they work to increase your ATV. You could say that your ATV does not tell you how many people you offer your services to but how well you serve them. A well-trained team can also achieve high sales on a less visited day. And more often than not the rule is quality over quantity.
2. Bundle deals and add-on sales
Bundle offerings and add-on sales: Special deals if buying more or the complete outfit. As we learned previously Visual Merchandisers are in a great position to tell stories to customers. They can place outfits on mannequins or other displays to simplify the imagination of shoppers. When seeing a whole outfit, customers increase their wish of having it all, because they already know that it looks good and because it’s easy for them to purchase a whole outfit in one go. On top of it and to push the buying desire a little bit more, you could offer a special deal on the whole set.
3. Set up challenges and trainings for your sales teams
Another way to increase ATV by add-on sales is period-depending focuses. Set up challenges for your sales teams to keep them motivated in selling more. They are the biggest part when it comes to increasing the average sale per person. When a sales associate is dedicated spending more time on customers no matter how nice, demanding or tiring they might be – keeping the sales associate motivated will keep the customer happy.
How to do that? And more importantly, are your sales teams trained well enough and feel comfortable with their tasks? Sounds obvious that training is necessary, but oftentimes retailers forget about the fact that trainings have to be done continuously and not only in the hiring stage. With an ever-changing environment and technologies invading our everyday as much as our work life, regularly training sessions remain momentous.
4. The longer the better
The longer your customer actually stays in your store, the higher the chances he/she will see more things and will buy more. Obviously, not only time matters when you think of increasing the ATV, but it has an influence. Creating appealing customer experiences and surroundings where shoppers actually like to spend their time is of crucial importance.
Your store has to tell a story, it has to give value and meaning to the people inside of it. Visual Merchandising contributes with high amounts to value creation. Can your story be relevant enough for shoppers to stay and listen and turn into actual buyers?
5. Trigger impulse purchases
Merchandising is your best friend when it comes to trigger impulse purchases. Of course you already know that Visual Merchandising has a significant effect on the purchase value, right?
You probably experienced these kinds of situations already by yourself. You are standing in line for the cash desk, but whilst waiting you have to blaze the trail through a zigzag of shelves that contain “small” additions that are so easy to slip in your shopping bag during your waiting time.
6. Try to keep the customer
Loyal customers usually tend to spend higher amounts of money in your store. That is because they established a certain level of trust in you and your product when they were satisfied with the service they received during their last visit. Ever thought of sending out your receipts directly to their email inboxes instead of printing them out every time? This does not only save paper and attracts eco-conscious shoppers, but also allows you to reach out to them after they visited your shop.
Sending them personalized (personalization – big buzz word in retail, remember?) offers and special invitations to events etc. heighten the chances that this one-time shopper will come back and turn into a loyal customer. FlexReceipts has found that digital receipts have an 80% open rate and that 75% of people who click on something in a digital receipt will make another purchase within 48 hours.
7. Flexibility in payment options
As it easy as this might sounds, many retailers still don’t follow the pattern of enabling customers to pay in easy and efficient ways. Since cash is hardly used anymore, offering different kinds of digital payment is crucial when you want to make your customers experience the most effortless shopping journey they could ask for. The Netherlands have 60% of total non-cash consumers, followed by France and Sweden with 59%, and Canada with 57%. Leveraging more and more technology only makes sense.
A research by PYMNTS in collaboration with Visa indicates which payment methods will be used by consumers in 2019 and beyond. Some interesting finding indicate that they won’t only pay with their phone, but with multiple mobile devices. Since there are being well trained at the moment to use their own voice for web searches and more, it doesn’t come as a surprise that voice-assisted retail will raise in the future as well. Automatic check-outs, Biometrics, PayPal and Contactless Cards are on the list, too.
8. Good lighting in your fitting rooms can save you
Not only a positive store experience is important when you want to increase your ATV. The most important purchasing decisions happen in the fitting room. How often have you changed, looked at the mirror and thought “No…, no, this is how I normally look like”? Or you feel claustrophobic because unfortunately most fitting rooms (especially in big fashion chains) don’t provide much space for comfort.
Have a close look to the lighting you want to install: does it tint the merchandise? Which lighting works best for the given space and enhance aesthetic appearance. The better your customers likes themselves in your clothes in the fitting room, the more likely they will come out and take most of what they tried on.
Now it's your turn!
How do you build the perfect customer experiences to increase your ATV? We say with our intelligent retail solutions that visualize your space planning, store management, Visual Merchandising and in-store execution. Check out MockShop and ShopShape and get in touch with us if you have further questions.
Written by Madeline Ana Vidak