What your sales aren't telling you: traffic, conversion, and ticket

Every Monday, in a lot of retail meetings, someone opens the sales report and declares whether the week was good or bad. With plenty of confidence.
Rarely does anyone ask why.

A brick-and-mortar store's sales are three numbers multiplied together:
traffic × conversion rate × average ticket.

When sales drop, one of the three moved. And each one gets fixed in a different place: traffic, outside (location, window display, advertising); conversion, inside (service, stock, lines, prices); ticket, in the assortment and promotions.

Buuut in the meeting, almost always only one gets discussed: the one that shows up in the report. That's why the fix tends to be the same for everything: more advertising. In other words, spending money outside to fix something that's often inside.

Of the three, conversion rate is the one almost nobody looks at. And it's the one that helps you decide the most.

A word of warning: you have to know how to compare conversion. By cluster (stores that are similar to each other) or against the same store over time. The chain-wide average mixes formats, and it can drop even if every one of your stores improves. I break it down in part 5 of the series.

Over these next few weeks I'm publishing a short series on this: where to look for the problem, who you're not selling to, what decision to make, and how much money is on the line.

PS: if you want to calculate yours, I built a conversion calculator that does it in 30 seconds.