Conversion is a KPI directly tied to how Transactions drives Sales up or down.
Conversion measures the percentage of visiting customers who went on to make a purchase — also referred to as conversion rate.
Conversion is made up of two KPIs:
Traffic — the number of customers who visited the store
Transactions — the number of times customers exchanged money for products
Conversion is expressed as a percentage because it measures what share of visiting customers went on to purchase.
Formula: Conversion (%) = Transactions ÷ Traffic × 100
There’s no single “right” Conversion — it varies by store type and where the sales target (KGI) is set. If the KGI is Sales, most stores’ goal is hitting the sales budget. Planning toward that budget starts with estimating how many customers, and how much per customer, the store needs. Conversion is the KPI that connects those two: it tells you how many customers you need to convert to reach the target.
For example, if the sales budget is ¥1,000,000 and Average Purchase in the same period last year was ¥10,000, and this year is expected to be similar, the store needs 100 Transactions to hit the budget. If Traffic in the same period last year was 1,000 and a similar number is expected this year, the budget is achievable with a Conversion of 10% or higher.
Rather than asking what Conversion “should” be, set a Conversion target as the standard needed to hit your store’s goal — that gives you a target tailored to your own store, not a generic benchmark.
