27 Jun Measuring the financial impact of visual merchandising
The performance of a visual merchandising campaigns and the return on investment, is of course very important to measure. However, pinpointing the exact operational reasons behind campaign outcomes can be very tricky for a number of reasons including:
– product appeal
– change in trading patterns
– channel shift
– the weather
– store execution standards and compliance
In a recent meeting with the Retail Director of one of our clients, he gave us a practical example of how they measure performance.
A recent seasonal sales campaign failed to deliver on numbers. The omni-channel campaign featured the same offer in-store and online. The same campaign, with different visual merchandising, was run at the same time one year earlier.
Sales in-store were down 20% for the campaign compared to the year before. The online sales for the same campaign were the same as the previous year.
What caused the 20% drop in sales? It would be easy to blame the drop on the decline of bricks and mortar retail, or point fingers at one department.
The Retail Director decided to investigate the dip in sales further. He was not looking for somebody to blame, he was looking for a problem that needed fixing. He assigned the project to an analyst. The analyst was tasked with studying the campaigns performance and comparing it with previous campaigns to look for disparities. Interestingly, this analyst was originally from the e-Commerce team. In e-Commerce it is second nature to analyse every facet that drives incremental sales performance. The same scrutiny should be applied to brick-and-mortar for omni-channel success.
“This analysis helped us tremendously as we were able to isolate several causal factors”, said the Retail Director. “When we looked at the VM campaign on StorIQ it was immediately obvious what had happened. It showed us that there was a general failure across all stores for this particular campaign. It also showed us that the failure was on a VM campaign level, rather than variance with in-store execution. When compared alongside footfall analytics we were able to establish that the window display was the primary cause. Comparing our library of images we were able to pinpoint the exact differences between the two campaigns.”
When the findings were presented to the retail team to analyse further, the exact causes were identified.
The Retail Director concluded, “We had all signed off on the scheme at director level, so it wasn’t that the VM team had done a bad job. It all boils down to institutional learning – and so as a team we know what works and what doesn’t. Using StorIQ we’re able to contrast, compare and learn from each campaign we run. Next time we will know exactly what needs to be done to get it right.”
Want to know how StorIQ’s Store View module can help you monitor Visual Merchandising campaigns? Click the link to learn more about StorIQ Store View.