Shopping habits of customers are affected by several factors such as seasonality and store types. Custom store hours are a great way to optimize sales by maximizing when more shoppers are in your store or restaurant, which is why the Aislelabs platform recently added the ability to change that within our solution. While setting these hours are easy, using data to understand your customers’ habits is key to creating the most optimal set hours to maximize revenue.
Customers are becoming more demanding than ever before for longer hours. Everything from extended hours during the holiday season to hours that fit their own personal lifestyle can positively or negatively affect your business. Setting the opening hours of a retail space or restaurant is crucial to the success of any commercial space. While it may seem like a simple task of being open when there are more customers and closed when there are less, there is actually a lot more nuance to crafting operating hours to increase your profit margin.
Factors to Consider when Setting Your Hours
- The competition: Knowing when your competitors are open, you get a good sense of what your operating hours should be.
- Holidays and special events: While operating hours tend to be the same day in and day out they can often be affected by the season, holidays, or special events.
- Your customers: A third factor you may want to consider is the customers themselves. Simply put, ask them what operating hours would be most convenient for them! Running a simple poll, micro-survey, or online survey asking which times they would like your business to be open is an effective way to start tailoring your hours.
- Multiple locations: Standardized hours for all locations makes it easier for customers to remember when you’re open or closed but it also means that all your locations may not optimized for their specific neighbourhoods.
Study Your Traffic
Generally speaking, there are three types of hourly patterns for commercial spaces in which traffic volume falls into. These patterns will help you understand when you are your at your busiest and when you’re at your slowest.
This is the most common type of distribution pattern. It shows that the busiest times are in the middle of the day while the volume of customers tapers off around opening and closing hours. These hours generally indicate that the current hours have been optimized. It is possible that traffic could be busier outside of operating hours if your surveyed customers have indicated they would like to shop earlier or later. However, with normal volume distribution shown in the chart above you should be wary as it seems less likely to be the case.
High Opening Hours Volume Distribution
The next typical customer volume distribution is weighted near opening hours. Traffic peaks at the beginning of the working day and tapers off near the end. This indicates that there might be an opportunity to get more customers by opening earlier.
High Closing Hours Volume Distribution
The other side of the coin is when volume is weighted near closing hours. When traffic peaks at the end of the day it could indicate that you might be able to get more customers and a higher profit margin by staying open later in the day.
Gathering Accurate Data
Collecting accurate data is very important in order to successfully optimize your hours. Unfortunately, the human mind is easily fooled so eyeballing it may not be the best option. As an example, let’s say a retail store sees a surge of around 40 customers between 1:20 p.m. and 1:40 p.m. but otherwise very few customers come in 20 minutes before or after those times. At the end of the day, one or two customers come in every minute and there are never more than five or six people in the store at any given time. It may seem less busy than the midday rush, but it is actually twice as busy at the end of the day. The Aislelabs platform does this automatically to give you accurate data on customer footfall and traffic.
Optimizing Your Hours
Now that you’ve collected your data, you can plan out how to optimize your hours. One strategy is to just extend your hours at the beginning or end of the day but that may not always be the best strategy. It is possible that by extending hours and promoting it to customers could just shift the timing of when they visit as the example above shows. Extending by an hour or two at the end of the day, for example, may just convince a current customer to visit later in the day. So the overall volume of customers and profit margin stays the same but operating costs have increased.
There is a more efficient way of optimizing your hours. For example, if your venue is a coffee shop that peaks during opening hours (for the morning coffee rush) but tapers off at the end of the day, you can possibly increase sales without increasing expense on staffing. Instead of just opening earlier, you should also experiment with closing earlier as well. Effectively, you’ll shift the last hour or two of the day to the beginning of the day. If sales are much higher at the beginning of the day, you’ve increased your revenue without increasing operating expenses.
When optimizing your hours of operation it all comes down to capturing data, studying it, and experimentation.