Franchise Marketers Shouldn't Fall for the Shell Game of Foot Traffic Analytics
Brick-and-mortar businesses turn to retail foot traffic to understand mobility patterns across specific locations. Ad agencies often tout increased footfall as proof of a marketing campaign’s success or a storefront’s performance. But as a KPI, foot traffic data—which is in high demand among franchise and multi-location brands—offers little more than an illusion.
You can’t take foot traffic to the bank. If a store is doing well, the cash register will tell that story. Footfall data offers limited indications for a business’s performance because it is at best correlated and at worst inconsistent with sales and revenue.
Here’s why foot traffic data can be misleading as a performance indicator and how franchise marketers can more effectively gain insights into storefront performance.
Why foot traffic data is a misleading performance indicator
The significance of foot traffic data is often overestimated. Analytics vendors and agencies can wield these numbers to claim that campaigns have been successful—even if sales haven’t increased—effectively passing the buck to franchisees, who will be left wondering how rising foot traffic explains lagging sales. Knowing how many people visit a certain area doesn’t necessarily mean they visited a specific storefront or converted.
On top of the limited implications of retail footfall data, its sourcing is arduous, making it very expensive to access comprehensive or even accurate information. For franchisees, per-location budgets don’t allow for statistically relevant data sets when it comes to foot traffic, producing few measurable results.
Privacy moves are also making it harder to accurately track store visitors through SDKs or ad call data on mobile devices. Amid mounting consumer data concerns and the relatively new ability for mobile users to opt out of a growing number of tracking practices, the availability and quality of foot traffic data is diminishing. An estimated 75% of iOS users have opted out of tracking, an option afforded to them through Apple’s App Tracking Transparency. This change leaves swaths of the population untraceable in foot traffic studies based on mobile tracking.
If franchise brands are interested in foot traffic to better understand business at their storefronts, they may not realize that other forms of localized data exist. Whether franchisees are using their individual ad budgets to run ineffective one-off foot traffic studies for their own storefronts or they’re pushing for corporate to commission studies across locations, it’s not the most effective way to spend marketing dollars. There are more comprehensive analytics that can drive more targeted marketing decisions.
Where to look beyond foot traffic for brick-and-mortar insights
At the end of the day, franchisees want shoppers to spend money at their stores, not get counted in a mobility study. Rather than foot traffic, turning instead to data on ad impressions, conversions, and—above all—revenue broken down by each store location offers a much more useful and accurate picture of marketing and sales results to franchisees.
The key is to use metrics such as campaign reach and click-through rate in a given store’s radius to understand how marketing decisions relate to sales and revenue per location. Without a per-location approach, marketers risk failing to understand what a given store location’s results really have to do with marketing decisions. And this is the lack of clarity that drives marketers and franchisees to proxy KPIs like foot traffic.
The smoke and mirrors of foot traffic data and other proxy performance KPIs can distract from real results and erode the trust between franchisees and franchise marketers. Imagine how dismayed franchisees will be to check in with corporate about flagging revenue and be told that foot traffic is going up. While useful for site selection and real estate decisions, this information isn’t granular enough to measure how individual storefronts are performing in response to marketing efforts. So, it leaves marketers and franchisees without the intelligence they need to boost performance.
Instead of consulting footfall data, analyzing which creative properties are resonating in certain areas through localized impression and attribution data can help franchise marketers narrow in on tailored approaches for certain communities, while conversion and revenue data can be linked to campaign activations to understand and influence the bottom line at every storefront.
When franchisees ask for foot traffic data, they’re really asking for a more granular picture of marketing lift at their own storefront. As a franchise marketer, it’s up to you to know the difference and deliver them the information they need to be confident and empowered owners and operators.
Patrick Pleiss is Co-Founder and Head of Operations at Hyperlocology, a multi-location marketing platform supplier that helps brand marketing teams execute and analyze brand advertising and local digital advertising on a per-location level. For more information, visit their website.
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