Calculating the ROI of Visual Merchandising

Feb 23, 2017 — Joanne Helm
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Visual merchandisers arrange retail space and product displays to encourage shoppers to buy. Naturally, retailers want to ensure visual merchandising provides a strong return on investment (ROI) for their companies. After all, why continue visual merchandising efforts if they don't translate into more sales?

Since design and aesthetics sometimes seem like ethereal concepts, it may appear challenging to measure the success of visual merchandising, but it can be done. Keeping track of the following factors can help determine which visual merchandising efforts are translating into profit.

Display window conversions

The point of a display window is to generate curiosity and interest in a brand and its offerings. Often, display windows initiate shoppers' journeys toward purchasing particular products. The potential customers walk past storefronts and, if displays are enticing enough, they enter the shops to find out more about the items.

Display windows can be tweaked in countless ways. Visual merchandisers can manipulate props, mannequins, digital signage, or other factors to cast different lights on the products displayed. The number of passersby entering the shops can then be tracked by manual observation or by sensors at the entrances and exits. With some simple math, retailers can figure out which display windows are most successful at bringing in customers.

Digital signage

Digital signage is a highly flexible feature omnichannel retailers can install in their brick-and-mortar locations. The signs allow retailers to easily alter the font and color, speed, and frequency of their brand stories and advertisements.

Any of these factors can be tracked and correlated with the types of purchases consumers make. What types of goods are shoppers buying in stores with digital signage installed? Are they the same types of goods as the ones advertised by the signs? What happens if the digital signage's color or font is changed, or when the signs are turned off altogether? If a store sees an increase in sales of sporting goods after using digital signage to advertise sporting products, the ROI on visual merchandising is easy to quantify.

Music and ambiance

When you're putting together your strategy, consider all five senses. Visual marketing plays a key role in how consumers interact with your brand, but there are other factors that will help create a multi-sensory experience for your customers.

While touch, smell, and even taste play a part in the equation, sound is arguably the easiest aspect to control. Varying music in a retail setting can affect how consumers behave. For instance, slow music generally reduces arousal levels and keeps shoppers in stores longer. In turn, keeping customers in shops longer leads to more purchases. It can be inferred, then, that playing slower music in a retail space will translate into more sales.

But how can retailers be so sure? Perhaps slow classical music increases sales, but slow rock music doesn't. To find out, visual merchandisers can run trials in their stores. One day play no music, another day play slow classical, and another day play slow rock, all while keeping records of transactions. What effect does the music have on customers' behaviour? Experimentation can help uncover the answers.

These are just a few examples of how visual merchandising can be measured to see what success it brings retailers. As retailers continue to evolve alongside technology, and tracking ROI becomes increasingly complicated, merchandisers who use point of sale analytics will have a head start in measuring the success of their visual merchandising techniques. 

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Topics: Retail Operations, Retail Marketing

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