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Profitable Times Newsletter

Capture Rate

Through twenty-one years of consulting with museum stores I have come to respect the Capture Rate as one of the valuable tools for measuring the success of a retail presence. The Capture Rate can provide a non-financial snapshot of the customer's overall response to the store, encapsulating product selection, merchandising and display, retail pricing, location, customer service and the overall ambiance of the store. Simply put, if more museum visitors make a purchase in the store it generally translates into greater revenue.

To become this valuable tool it has to be calculated accurately and consistently. The most widely accepted definition of Capture Rate is the percentage of museum visitors who make a purchase in the store. The formula is:

Number of Store Transactions That Include a Retail Product
= Capture Rate percentage

Visitation Count

This seemingly simple definition and calculation, however, is fraught with hazards that can affect accuracy.

What transaction count should be used? On the surface this is simple since nearly every cash register and POS system provides a transaction count as part of the 'Z' tape or daily closing report. The challenge is in making sure the count to be used only uses transactions that include a retail product and excludes transactions that are, for example, only for items such as admissions or opening the cash drawer to provide change.

What visitation number should be used? This is a more challenging than the transaction count because this data is often maintained by entities other than the store. My preferred definition of visitation for this purpose is the number of people who come in close proximity to the store when it is open. I fully recognize, however, it is probably simpler and thus easier to be consistent, if a broader visitor count, such as admissions, is used. This is a critical point because without an accurate visitation count there can be no consistency and without consistency the calculation can be worse than inaccurate by becoming misleading. Please note that the 'Visitation Count' is not the number of people crossing the threshold into the store.

As the above highlights, controlling the calculation is difficult enough without trying to do inter-museum comparisons. As a result, it is recommend maintaining the calculation and building benchmarking data for your museum and not trying to compare it to other institutions.

 
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