Whether you are planning a storewide facelift or developing a new retail fixture program for your brand, increasing sales – while building brand and product awareness – is the goal. But how do you know your updated window display or fixture program is getting results?
We asked Aston Haswell, Business Development Manager at The Trade Group, to share insight on how to measure the effectiveness of retail merchandising programs, and he recommended the following approach:
No. 1: The obvious – monitor same store sales per location.
Prior to implementing a new retail merchandising program, establish baseline sales numbers for each store location. Next, compare those numbers – month over month and year over year – to sales after the new program is in place. Proof is in the sales numbers.
No. 2: Regularly monitor fluctuations in store traffic.
As with sales numbers, compare how many visitors enter each retail location before and after implementing a new merchandising program. This insight can be especially helpful for evaluating the effectiveness of window displays and promotional signage visible outside of the retail space.
If you install new signage and don’t see an increase in traffic right away, that’s a clear indication that adjustments need to be made – either to the design or the promotional offer.
In addition, if foot traffic increases substantially but sales remain flat, changes need to be made elsewhere. You may need to provide employees with additional training, hire more staff or reposition featured product displays so they are easier to find.
No. 3: Analyze how different SKUs perform.
Along with measuring changes to overall transaction value, SKU-related data allows retailers to monitor the sales of specific products, the number of SKUs per transaction and whether there are any changes in the variety of SKUs – or products – purchased.
Analyzing SKUs can also help retailers determine whether or not the layout of their program is driving more sales. For example, by reconfiguring a layout successfully, a customer may see a hat now that they didn’t see before. So, instead of buying one T-shirt, the customer buys the shirt, a belt and a hat. Cha-Ching!
No. 4: Tap into retail analytics technology for in-depth insight.
What if you could … Measure the length of each customer’s visit and how frequently they shop at your store? … Find out how many people pass by your location before and after you change a window display? … Push promotional offers to customers based on their shopping habits? You can.
Retail analytics technology firms are plentiful today. They offer a wide range of customer insights and tools and do so at a variety of price points. Thanks to the Internet of Things and technological advances, retailers can get access to customer behaviors quickly, so adjustments to retail displays, fixtures, signage and promotions can be made sooner rather than later.
Installing experiential displays in retail environments is one way to encourage consumers to come visit and linger longer. Learn how experiential retail is bringing joy back to the store in this recent post.
No. 5: Calculate ROI of your retail merchandising program.
Once you have the raw sales numbers in hand, the next step is to calculate the ROI of your program. For example, if you invest $10,000 to design and implement the program, plan to use the fixtures for two years, and sales increase an average of $1,000 per month, your return on investment would be $14,000.
Again, if your retail merchandising program isn’t yielding the ROI you have forecasted early on, adjustments need to be made. By monitoring the effectiveness of the program from day one, you can make modifications to ensure success over the long term.
Click the image below to view our infographic on How to Measure the Effectiveness of Retail Merchandising Programs