Retail Conversion Rates: Made in Saudi Arabia

Retail conversion rates vary and are heavily influenced by the quality of traffic and consumer shopping modes. This post offers examples and insights.

It’s common retail sense that retail conversion rates vary from location to location. A store in a train station, with commuters & tourists often doing last minute shopping (in need-to-buy-mode), creates rather high retail conversion rates. The shoppers know what they want and they have little time to browse. Airport shoppers on the other hand check-in early, but have lots of time to browse around (impulse-buy-mode). As a result, airport stores report rather low retail conversion rates.

retail conversion rates, brand KPIs,

A Levi’s Store (Photo: Brand Pilots)

Global Difference in Retail Conversion Rates

We observe similar patterns in high streets and shopping centres. Retail conversion rates are heavily influenced by the location, the quality of traffic and the consumers’ shopping mode. A 20%  retail conversion rate may be low for one location and very high for another location. So it helps if you know how to determine your ‘appropriate’ store KPIs for your locations.  With retail globalisation, brands’ knowledge of ‘appropriate’ KPIs needed to grow. In China, where window shopping is still the number one leisure activity, we find a high share of store traffic is made up of low income browsers and so a brand’s conversion rate of 5% is often already best practice.

Retail Conversion Rates: Made in Saudi Arabia

Brand Middle East Strategy

Arabic Brand Store (Photo: Brand Pilots)

Saudi Arabia’s retail conversion rates tend to be higher, but not for reasons of income. The country is home to 500+ international brand stores, but still has a long way to go to become a modern consumer society. Store clerks were 100% male until recently and for that reason, most female fashion stores didn’t have changing rooms. As a result, in-store fashion shopping is more of a process of pre-selection. We compare it with filling an eshop basket with additional options to try at home and to return it some days later. In Saudi Arabia the dress rehearsal and the final purchase decision happens at home. This means retailers don’t know their purchase conversion rates until 5 days after the initial buy, when it is clear how many purchases were returned.

High conversion rates in the Kingdom of Saudi Arabia are possibly even more influenced by another cultural nuance: women are still not allowed to drive. If a household doesn’t have a driver, it needs the husband to drive the family to and from the mall. It’s said that this is to the benefit of the Saudi women. There are still many cultural differences when compared to western consumers, but where shopping is concerned, Saudi men are no different to their western counterparts – a shopping trip once in a while is more than enough.


About the Author:

Guido has worked with retailers & brands on their KPIs in many countries. His collection of ‘commonly used’ KPIs exceeded 100 a long time ago and he strongly there far to many KPIs. If you have a benchmark or KPI question, or want to share some thoughts, you reach him best by email.

 

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