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If Google Would Run a Brick-and-mortar Store

by | Aug 20, 2018

Up until last weekend, Google’s only retail spaces have been pop-up stores and small shops within other stores. But according to the Chicago Tribune, the technology giant is close to finalizing a lease for almost 14,000 square feet in Chicago’s Fulton Market district. So finally the almighty know-it-all admits, that every company at some point needs a physical presence.

Technology and retail experts have long speculated that Google is looking to create its own permanent stores to showcase the company’s growing list of electronic products. The list now includes smartphones, tablets, thermostats, home security systems and Google Home — the company’s version of Amazon Echo. So far this seems to be the only physical retail store as Google has yet to confirm plans for long-term shops, and no locations have been reported in any other cities.

Google Analytics for Retail

It makes you wonder. If Google is opening up a store, what will they track? What data will they be interested in and how will they use it to run their business better. Or would they be more interested in the customer and focus on providing a better customer experience. Which in turn should lead to better revenues. Let’s take some good old growth hacker tactics and see if we could apply the magic formula to brick-and-mortar stores. After all, this has been providing strategic direction to online companies for years.

1. Retail Store Traffic / Visitors

The number of people visiting your store. You know it is important, but do you realize what happens if you send 10% more traffic to your retail location? You should you assume 10% more revenue to keep things simple. The next step is to figure out how to send more traffic to your store and what the associated cost is. If this exercise is cost beneficial, Google will try to send as much traffic to their store via all the available channels.

It’s the obvious thing to do. But it’s also costly and there are risks. What if you send more people to your store but they somehow end up disappointed. They can’t find the products they’re looking for, products aren’t priced and staff is unhelpful. It’s the experience that needs to be perfect as well. And that’s where conversion comes in.

2. Conversion

The percentage of people that actually buys something. In comparison, from every 100 people visiting a website, only 3 put a product in their basket and only 1.5 (on average) buys a product. For international retail, this is closer to 40%. You can imagine that if you send 100 more visitors to a website that only 1.5 will buy and 40 in a retail store. So if you can do this effectively it pays off to send people to your store instead of the website.

Conversion is also a quality metric. It is a great indicator of how well staffing is adjusted to peak hours and how well they’re trained to help visitors become customers. If product presentation is optimal, all products are nicely priced and top-selling items are in stock: conversion should be high. Not many physical retail stores pay attention to their conversion and are missing out on revenue.

3. Average Order Value

The final piece of the puzzle, once we get from traffic (100) times conversion (40%) to the number of transactions, is to multiply with the average order value. This gets us to revenue. To be able to influence the average order value, there are the oldest tricks in the book: try and help customers find a more expensive product (up-sell), provide them with options to complete to product (add-sell) and inform your customer about all the other products that would go well with the item (cross-sell).

Two weeks ago I walked into a store for some flatware. We decided on the brand but weren’t set on the finishing and color. The helpful lady did not bother to show all the other options to complete our set, did not show us the finished she had that were more extravagant (even just to tickle our senses) and failed to ask about napkins, placemats, etc. We go into a store not just to buy, but to experience. We want to be seduced and persuaded. Maybe we are about to forget, how fun shopping used to be.

If I were Google and had to run a retail store, I would make sure to track and make visible these 3 KPIs: Traffic, Conversion and Average Order Value. They need to be front and center for all staff, all the time. Of course this shouldn’t go without proper education on WHY this is important and WHAT is expected: to set up the retail store team for success and keep continuously improving results. There will be low-hanging fruit but this gets really interesting if the whole team is activated and driven to outperform standards and rally behind the target.

Beautiful things will happen, like brick-and-mortar retail shopping might actually become fun again.

What if you could run a retail store like a website? Lulu systems offers data analytics and growth tools for brick-and-mortar retailers.

Visitor Counting

Measure the impact of marketing activities and watch your traffic grow.

Conversion

Know if your team, product presentation, pricing and visitors are aligned.

Customer Insights

Measure your audience and know what gender and age are buying your products.

Transactions

Based on our Machine Learning algorithms we can predict if tomorrow will be busy or quiet.