How to Measure the ROI of Your Retail Display and Fixture Investment
Retail display and fixture are essential elements of your store design. They showcase your products, attract customers, and enhance your brand image. But how do you measure the return on investment (ROI) of your retail display and fixture investment? How do you know if your display and fixture are worth the cost and effort? In this post, we'll show you some methods and tips to help you measure the ROI of your retail display and fixture investment.
What is roi and why is it so important?
ROI is a ratio that compares the profit or benefit of an investment to the cost of the investment. It is usually expressed as a percentage or a ratio. For example, if you invest $1000 in a display and fixture and earn $1500 from sales, your ROI is 50% or 1.5. This means that for every dollar you invest, you get $1.5 back.
ROI is important because it helps you evaluate the performance and impact of your display and fixture. It helps you answer questions such as:
- How effective are your display and fixture in attracting customers and increasing sales?
- How much revenue and profit do your display and fixture generate?
- How long does it take to recover the cost of your display and fixture?
- How do your display and fixture compare to other marketing strategies or competitors?
By measuring your ROI, you can make informed decisions about your display and fixture investment. You can also identify areas of improvement and optimize your display and fixture design.
How to Measure the ROI of Your Retail Display and Fixture Investment
There are different ways to measure the ROI of your retail display and fixture investment, depending on your goals and data availability. Here are some common methods and steps to follow:
1. Define your goals and key performance indicators (KPIs). Before you measure your ROI, you need to define what you want to achieve with your display and fixture. What are your specific and measurable objectives? For example, do you want to increase foot traffic, sales, or brand awareness? How much do you want to increase them by? These are your KPIs, and they will help you track your progress and evaluate your results.
2. Calculate your display and fixture costs. The next step is to calculate how much you spend on your display and fixture. This includes the design, production, installation, maintenance, and removal costs. You can use invoices, receipts, or estimates to get these numbers. You can also include the opportunity cost, which is the value of the next best alternative that you give up by choosing your display and fixture. For example, if you could have used the same space for another purpose, such as advertising or storage, what would be the value of that?
3. Calculate your display and fixture benefits. The benefit of your display and fixture is the revenue or profit that you generate from them. This can be measured by using sales data, customer surveys, or analytics tools. You can use different metrics to measure your benefits, such as:
- Sales Volume: How many units or dollars of your products do you sell because of your display and fixture?
- Sales Lift: How much do your sales increase compared to before or without your display and fixture?
- Conversion Rate: How many customers who see your display and fixture end up buying your products?
- Customer Retention: How many customers who buy your products because of your display and fixture come back for repeat purchases?
- Customer Satisfaction: How satisfied are your customers with your products and store experience because of your display and fixture?
- Brand Awareness: How many customers recognize or recall your brand because of your display and fixture?
- Brand Loyalty: How many customers prefer or recommend your brand because of your display and fixture?
You can use different methods to collect and analyze these data, such as:
- Point-of-Sale (POS) System: You can use your POS system to track your sales data, such as the number, amount, and frequency of transactions. You can also use barcode scanners, RFID tags, or QR codes to identify which products are sold from your display and fixture.
- Customer Surveys: You can use customer surveys to gather feedback and opinions from your customers. You can ask them questions such as how they found your store, what attracted them to your display and fixture, what influenced their purchase decision, how satisfied they are with your products and store experience, and how likely they are to return or refer your store to others.
- Analytics Tools: You can use analytics tools, such as Google Analytics, to measure your online presence and performance. You can track metrics such as website traffic, bounce rate, page views, time on site, and conversions. You can also use tools such as heat maps, eye tracking, or facial recognition to measure your offline presence and performance. You can track metrics such as foot traffic, dwell time, attention span, and emotions.
4. Use a formula to calculate your ROI. Once you have your display and fixture costs and benefits, you can use a formula to calculate your ROI. There are different formulas that you can use, but one of the simplest ones is:
ROI = (Benefit - Cost) / Cost
For example, if you spend $1000 on your display and fixture and earn $1500 from sales, your ROI is:
ROI = ($1500 - $1000) / $1000
ROI = 0.5 or 50%
This means that for every dollar you invest in your display and fixture, you get $0.5 back.
You can also use other formulas such as:
ROI = (Benefit / Cost) - 1
ROI = (Net Profit / Cost) x 100
ROI = (Sales Lift / Cost) x 100
The formula you choose depends on your preference and data availability. You can also use online calculators or spreadsheets to help you with the calculation.
5. Compare and optimize your ROI. The final step is to compare and optimize your ROI. You can compare your ROI to:
- Your goals and KPIs: How well did you achieve your objectives? Did you meet or exceed your expectations? If not, what were the challenges or gaps?
- Your previous or alternative display and fixture: How did your current display and fixture perform compared to your previous or alternative ones? Did you see any improvement or decline? If so, what were the reasons or factors?
- Your industry or competitors: How did your display and fixture perform compared to your industry or competitors? Did you gain or lose any market share or competitive advantage? If so, what were the strengths or weaknesses?
By comparing your ROI, you can evaluate the effectiveness and efficiency of your display and fixture. You can also identify areas of improvement and optimization. You can use the insights and feedback from your comparison to:
- Adjust your display and fixture design: You can change the size, shape, color, material, or lighting of your display and fixture to make them more attractive, visible, or functional.
- Adjust your display and fixture placement: You can change the location, orientation, or arrangement of your display and fixture to make them more accessible, convenient, or prominent.
- Adjust your display and fixture content: You can change the message, image, or offer of your display and fixture to make them more relevant, appealing, or persuasive.
- Adjust your display and fixture timing: You can change the frequency, duration, or seasonality of your display and fixture to make them more timely, consistent, or appropriate.
By optimizing your display and fixture, you can increase your ROI and achieve your goals.
Conclusion
Measuring the ROI of your retail display and fixture investment is a crucial step to ensure the success of your store design. By following the methods and tips in this article, you can calculate, compare, and optimize your ROI. You can also demonstrate the value and impact of your display and fixture to your stakeholders and customers. By doing so, you can create a retail display and fixture that showcases your products, attracts customers, and enhances your brand image.