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In-Store Conversions Were Up In May, But Sales Were Down

A new report by RetailNext highlights the trend of bigger purchases, but fewer buys, and points to a startling disparity between desired actions and actual transactions.

Consumers bought more in-store items during the month of May, though fewer shoppers showed up to shop, a report by clicks-to-bricks data provider RetailNext reveals, showing the continuation of a pattern that has been developing throughout 2015.

For brick-and-mortar retailers, May yielded a slight year-over-year increase in conversion of 0.5 percent, and a growth in average transaction value of 0.8 percent; but sales dipped by 7.6 percent, and traffic fell by 9.8 percent. Transactions in general were down by 8.3 percent. (It was not clear from RetailNext’s report if they define conversions as “people who simply clicked on an ad” or as sales or store visits. We’ve asked the company to provide a clearer definition and will update when we have more information.)

Consumers that went shopping did so the most in the days leading up to Mother’s Day, with the Saturday before the holiday rendering the most sales, transactions, and traffic. Retail action died down around the end of the month, a fact largely attributed to the general slowdown Memorial Day weekend brings. This is pretty much how it’s been throughout history.

The standout trend is that while monthly conversion and average transaction value are going up year over year each month, transaction, and traffic are going down (with the exception of January, which saw an average sales transaction dip of 0.1 percent).

RetailNext bases its reporting on a variety of in-store consumer touchpoints, including video cameras, wifi/Bluetooth connections, point-of-sale systems, payment cards, and more, representing over 20 million shopping trips across specialty and larger format retail stores.

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According to the data in the report, the pattern has been erratic. May certainly shows an improvement over April, where sales were down by 12.5 percent, and traffic by 14 percent. But in March, sales, transaction, and traffic were down by considerably less — 3.2 percent, 5.8 percent, and 8.2 percent, respectively.

Despite the dips and plunges in sales, transactions, and traffic throughout Q1 and part of Q2 2015, conversion has stayed positive, though even here the progress has been erratic. Thus far, March was the strongest month for conversion rates, showing a year-over-year increase of 0.9 percent, while sales and traffic were down by 10.4 percent and 12.5 percent.

The fact that conversion is always up, however inconsistently, while the other key aspects are down, indicates that many consumers are taking a desired action, e.g., clicking on a coupon that can be redeemed in store, but not actually redeeming it.

This is disconcerting as it suggests that mobile marketing tactics, for instance, are effective in engaging consumers — but not in driving traffic, or in making that final push to purchase. It also causes us to question how desirable an action is if it doesn’t tie in with or lead to a concrete sale.

RetailNext’s white paper asserts that these positive conversions “indicate shopper commitment has increased.” But this depends on what you mean by shopper commitment, and calls for speculation as to how conversion is measured.