Definition
Foot traffic refers to the number of people who physically enter a retail location, restaurant, shopping centre, or other commercial premises within a defined time period. It is a primary performance metric for bricks-and-mortar businesses because without visitors, there are no sales.
How to Measure Foot Traffic
Measuring foot traffic accurately requires a counting mechanism. Simple solutions include door-mounted infrared sensors or optical counters. More sophisticated systems use video analytics, Wi-Fi tracking (counting devices that connect to in-store networks), or Bluetooth technology. The choice of technology affects both accuracy and the richness of data available.
Foot Traffic and Conversion Rate
Foot traffic data is valuable on its own, but it becomes significantly more useful when combined with sales data. Dividing total transactions by total foot traffic gives the store conversion rate, which measures how effectively the business is turning visitors into buyers. A high-foot-traffic store with a low conversion rate has a different problem to a low-traffic store with a high conversion rate.
Sales Per Visitor (SPV)
Sales per visitor (SPV) is a related metric that divides total revenue by foot traffic. Two stores with the same traffic might show very different SPV if one attracts more committed buyers or has higher average transaction values. Tracking SPV over time shows whether changes in merchandising, pricing, or staff approach are affecting how much each visitor spends.
External Factors Affecting Foot Traffic
External factors influence foot traffic in ways businesses cannot fully control. Location is the most powerful one. Seasonality, weather, public holidays, and proximity to anchor tenants or transport hubs all affect daily and weekly visitor counts.
For businesses in shopping centres, landlords often share centre-wide foot traffic data as part of the lease relationship. Comparing a store’s individual traffic trend to the wider centre traffic allows the business to determine whether a decline is caused by a centre-level issue or something within the store’s own control.