What is it about?
In this paper we analyze the foot traffic and sales data from a speciality retail chain across the US. We show that sales are increasing and concave in traffic. Further, we show that labor improves conversion rate - that is it better translates traffic into eventual sales. Finally we show that the effect of improved conversions in a given period can lead to improved traffic for many more periods in the future.
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Why is it important?
As retail stores struggle to maintain their business model, our work presents an avenue by which a retailer can stay competitive. In particular they should focus on converting incoming traffic by leveraging high quality retail labor.
Perspectives
This was an interesting project where we utilized the latest data stream from traffic counters that were being piloted by stores. Special thanks to Ms. Jan Davis who was the CEO of the firm and Kenan-Flagler alumna who enabled data access to me. It was an exciting project since it was highly innovative and we were the first to analyze this type of data. It was an enjoyable collaboration with my doctoral student (Olga) and colleague (Saravanan). Thanks to M&SOM for making it a Finalist for the best paper award.
JAYASHANKAR Swaminathan
American Diplomacy Publishers
Read the Original
This page is a summary of: Effect of Traffic on Sales and Conversion Rates of Retail Stores, Manufacturing & Service Operations Management, January 2012, INFORMS,
DOI: 10.1287/msom.1110.0356.
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