The Impact Of Visual Merchandizing Strategy On Sales Volume: A Case Study Of Tesco

Specific research problem

Visual merchandizing is the representation of the shop or the outlet and the commodities in such a way that contributes in attracting the potential consumers to the brand. It focuses on assisting the sales manager, owner of the store in meeting their objectives and enhances the average sales of the brand. The term visual merchandising is a terminology based on marketing that has a huge impact on the retailers and traders of the current time. According to Park, Jeon and Sullivan (2015) this is one of the most significant marketing tool and it presents a direct communication mean between the consumer and the product. Visual merchandizing includes the promotional signage such as banners, billboards, pamphlets, posters, hand bills and the other decorations in the outlet or the shop that the consumers visualize and experience during their visits to the shop. The manipulation and usage of the attractive displays and the other floor plans within the outlets engage the customers; therefore boost the sales of the brand. As the idea of visual marketing deals with the display of the goods, it ensures that more people walk into the outlet and makes sure that they make a look around. In this study, the focus will be on evaluating the visual merchandizing strategy of Tesco for assessing the kind of impact it can have on the business level. Therefore the study will focus on conducting in-depth literature review, which will help to identify different dependent and independent variables related to the research topic along with the proper utilization if the effectual sampling techniques and procedures in order to capture the effective quantitative information about the research topic. At the end, the study will also provide appropriate recommendations that are to be made in order to boost the sales with the help of visual merchandising.

Visual merchandizing acts as a significant factor in boosting the sales and drawing the attention of the consumers towards the brand. This research study will focus on the assessment of the best potential way of utilizing the visual merchandizing strategies for enhancing the sales volume of Tesco. . Now, in order to increase the sales volume, organizations need to focus on developing favourable purchase decision of the customers. For that reason, visual merchandizing will have to be implemented in such a way so that it can induce customers to formulate favourable purchase decision. However, there is no specific ay to use visual merchandizing strategy. Hence, the study will look to analyze the best possible to use visual merchandizing strategy creating positive purchasing decision of the customers that eventually enhance the sales volume.       

Organizational background for the business problem

Tesco is among the biggest multinational grocery stores across the globe. Tesco is present in retail consumer goods market for around 100 years (tesco.com, 2017). From the beginning, Tesco have focused on utilizing different attractive strategies for grabbing the major share of the market. Presently, the revenue level of Tesco is around £55,917 million, which is the second highest across other retail organizations (tesco.com, 2017). Tesco have used advance form of visual merchandizing strategy in order to educate customers about the products and service offerings. However, there are different other strategies also initiated by Tesco at the same time. Therefore, it is very difficult to assess the exact amount of impact initiation of visual merchandizing strategy have created on the sales volume of the organization.  

Impact of visual merchandizing on purchase decision:

As stated by Mehta and Chugan (2013) retailers are facing extremely competitive market environment that are inducing them to focus on innovative strategies. Retail store element such as lighting, colour and visual merchandizing has always regarded as having supreme effect on the buying decision-making process of the potential customers. The in-store product display with advance technologies like video and graphics have encouraged customers to visit the retail outlets on regular basis. However, different organizations have focused on different visual merchandizing procedure for creating favourable market share in an effective way. For that reason, it can be assessed that visual merchandizing strategy is independent variable of this research study. As per the article by Park, Jeon and Sullivan (2015), visual merchandizing not only focuses on effective utilization of display strategy of products but also examines physical environment concerning various elements. Visual communication and simulation have long been regarded as crucial aspect of retailing that encourages customers to create favourable market environment. For that reason, businesses will have to focus on assessing the prime needs and wants in an effective way, which will increase the effectiveness of the visual merchandizing strategy.

On the other hand, Kouchekian and Gharibpoor (2012) focused on developing effective conceptual framework regarding the impact of visual merchandizing on purchase level of the potential customers. 

The above figure illustrates the fact that visual merchandizing is extremely important for encouraging customers to invest more on purchasing different products and services. Now, in order to evaluate the impact of visual merchandizing, businesses also have to focus on assessing the attitude of the customers toward product. It will help businesses to highlight most desired products of the customers, which eventually will create positive impact on the revenue level. For that reason, Kim (2013) have mentioned that visual merchandizing have created chain wise impact on the customer psychology that will induce customers to favourable purchasing decision.

Literature review

There are three kinds of research variables, dependent, independent and moderating. The dependent variables are the ones where the researcher contributes more interest. The changes within the dependent variable indicate to the measurement of the research. The independent variable is the one that affects the dependent variable. On the other hand the moderator variable is the one that influences the potency of the relationship between the independent and the dependent variable.

From the evaluation of literature review section, it can be assessed that the study will have to use visual merchandizing as the independent variable. On the other hand, consumer behaviour, motivation and purchase decision will have to be regarded as the dependent variable of the study. The analysis of the literature review section highlighted the fact that consumer behaviour or perception towards a particular product depends heavily on the identification of usage pattern of the visual merchandizing technique (Jain, Sharma & Narwal, 2012). The literature review has also emphasized the fact that effective use visual merchandizing is positively correlated with the other factors. For that reason, retail organizations will have to focus on using visual merchandizing technique is such a way so that it can able to create maximum impact on the business procedure.

There are several marketing tools that are used to boost the sales. The visual merchandising tool also relies on the validity and reliability properties. The reliability factor is the one that that generally reflects the extent that contributes in producing the stable and consistent result. However there are several other forms of the reliability tests. There are different kinds of tests such as test-retest reliability, parallel forms reliability and inter-rater reliability that studies can use for assessing the information. For this study, the researcher will focus on the parallel forms of reliability in order to assess the extent of information effectively. However in addition to that, the validity factor is the one that aims to assess the measures of the test. There are also different kinds of validity tests such as face validity, criterion related validity, formative validity and sampling validity. This study will focus on the sampling validity procedures because this process ensures that it covers a huge range of the area. Therefore, it would ensure the outcome of the research could add value to the business perspectives.

As described by Pegler (2012) visual merchandizing can be regarded as an effective tool for visual communication that likely to create positive perception within the mind of the customers. Visual merchandizing reflects an activity that coordinates effective merchandizing selection with the use of appropriate merchandizing display. Specifically in retail market, visual merchandizing creates massive impact on enhancing the desire level of the customers on purchasing a specific goods and services. Moreover, visual merchandizing also creates positive impact on dividing the recognizable specific areas, which allows customers to identify specific portion of the outlets for identifying specific goods and service. On the other hand, Park, Jeon and Sullivan (2015) have mentioned the fact that visual merchandizing focuses on enhancing the appeal of the products through the utilization of light, props and colour. It induces people to visit stores on regular basis, which is likely to create positive impact on the sales level of the organization.    

Identification of other variables

For assessing the kind of impact visual merchandizing can have on sales at Tesco, the study will focus on evaluating following hypothesis,

Hypothesis 1:

H₀: Visual merchandizing is not a key tool for marketing communication to the customers

H₁: Visual merchandizing is a key tool for marketing communication to the customers

Hypothesis 2:

H₀: Effective utilization of visual merchandizing strategy does not create positive impact in developing favourable consumer behaviour

H₁: Effective utilization of visual merchandizing strategy does create positive impact in developing favourable consumer behaviour

Hypothesis 3:

H₀: Appropriate use of visual merchandizing is not important for motivating customers to purchase products and services at Tesco   

H₁: Appropriate use of visual merchandizing is important for motivating customers to purchase products and services at Tesco

Hypothesis 4:

H₀: Visual merchandizing does not create favourable impact on the sales volume at Tesco

H₁: Visual merchandizing does create favourable impact on the sales volume at Tesco

As described by Krishnakumar (2014) many customers perceive they are buying products at the time of shopping but they often purchase the overall experience of the shopping. Thus, the way products are promoted and displayed can have significant impact on the consumer reaction. Effective utilization of display technique can easily create positive impact on the sales volume. Visual merchandizing requires encompassing window display, advertising, packaging appearance and placement. For that reason, it often requires more space and investment from the management in order to create desired impact on customers’ psychology. For that reason, many studies have argued that visual merchandizing might not guarantee appropriate recovery of all the investments at all time. Therefore, it creates questions regarding the exact amount of impact visual merchandizing can have on the sales volume at Tesco. As described by Bailey and Baker (2014) visual merchandizing induce businesses to open store at all the premium positions of country in order to reach to maximum number of customers in an effective way. It also has to ensure that the displayed strategies can have positive psychological impact on the consumer perspective. Otherwise, it might not able to create required level of impact on the market. Therefore, the study will focus on capturing information regarding the exact amount of impact visual merchandizing can have on the sales volume at Tesco.   

Questionnaire

Name of the respondents:

Relationship with Tesco (customers / employees):

Age:

How often do you visit at the retail outlets of Tesco?

Validity and reliability properties

Have you ever influenced by visual merchandizing at Tesco to purchase a particular product?

How far do you agree visual merchandizing is important for developing favourable purchasing decision of the customers?

Do you believe visual merchandizing can create positive impact on the motivational level of the customers?

How far do you agree effective utilization of visual merchandizing will increase sales volume at Tesco?    

Justification:

The above questionnaire has only focused on including closed-end questions due to the quantitative nature of the study. The utilization of closed-end questions will definitely help the research study to include different statistical tools and techniques for analyzing the captured data about visual merchandizing. The above questionnaire has focused on including both independent and dependent variable for accomplishing all the research aims and objectives in an appropriate way.

According to Mackey and Gass (2015), development of perfect questionnaire is impossible. Therefore, studies need to focus on assessing the effectiveness of the developed questionnaires for ensuring successful completion of the research topic. Generally, undeclared and participative are the two types of pre-test of questionnaire available that studies can use for evaluating the effectiveness of the questionnaire. In order to evaluate the impact of visual merchandizing on sales volume, the study will use undeclared form of pre-test technique. It will help the study to understand whether the developed questionnaire is able to grab the attention of the respondents or not. It will also help to identify the necessary areas of questionnaire for making further improvement.  

Population reflects the entire group of people that involves to a particular study (Silverman, 2016). Now, this study has focused on evaluating the impact of visual merchandizing on sales at Tesco. Therefore, the population of the study includes all the employees, management, shareholders, distributors, suppliers and customers of Tesco. It reflects massive population size, which is extremely difficult to cover within the limited timeframe. Hence, the study will have to focus on using sampling frame and procedure for accomplishing all the objectives in an effective way.

As described by Taylor, Bogdan and DeVault (2015) sample frame reflects the source of device or materials from which a specific portion of the sample is drawn. Sample frame includes all elements present in the population. As a result, it allows the research study to cover different aspect of the topic in an effective way. In order to evaluate the impact of visual merchandizing on sales, sampling frame will help to categorize the all elements of the population effectively. For instance, it will help to include both marketers and customers’ point of view about the research topic, which will eventually add value to the eventual outcome.

The Sampling technique can be if two kinds, probability and non probability. The sampling technique generally means the selections of the specific sample for the research study. In the probability sampling technique the every member of the entire sample has a fixed position, however in the later one there is no such particular probability of belonging to the sample.

For assessing the impact of visual merchandizing on sales at Tesco, the population of the study includes all the stakeholders of the organization. Therefore, it represents massive population size that cannot be covered for capturing data about the research topic. Hence, the study would focus on sampling technique. Probability sampling and non-probability sampling is the types of sampling technique available that research studies can select for capturing relevant information about the research topic (Vaioleti, 2016). In order to assess the impact visual merchandizing on sales, the study will use non-probability sampling technique.  

Here, the study would use non-probability sampling technique, as it will help to select those individuals who are capable of providing appropriate information about the research topic. Here, the study will include both managers and customers’ point of view for adding value to the eventual research outcome. For that reason, the study would select 90 regular customers of Tesco along with 30 marketing managers for capturing in-depth quantitative information about the impact of visual merchandizing. The study will ask similar questions to both managers and customers for evaluating the differences in an effective way.   

Collection of appropriate data about the research topic is extremely vital for accomplishing all the aims and objectives of the study. As stated by Flick (2015) quantitative and qualitative are the types of data collection procedure that studies can use for gathering in-depth information about the topic. In order to investigate the impact of visual merchandizing on sales at Tesco, the study will focus on quantitative data collection procedure. As mentioned earlier, the study will develop questionnaire with closed-end questions, which will help to identify the exact amount of impact independent variable visual merchandizing can have on the dependent variable customer purchasing decision. The study will use online survey technique for the effective distribution of the developed questionnaire to the respondents.

Here, the study will focus on utilizing quantitative data collection procedure, as it will help to formulate trend about the research topic. Moreover, quantitative data collection procedure requires comparatively lesser time, which will allow the study to capture data from large sample size. As per the article by Panneerselvam (2014), large sample size reduces the probability regarding the errors of sampling in a major way. As a result, it will increase the reliability of the outcome of the research study. On the other hand, the study would focus on online survey technique, as it is likely to enhance the security level of the collected data from the respondents. Moreover, utilization of online survey will reduce the time required for data collection procedure. It also increases the convenience level of the respondents, as it allow to provide responses according to their free time. As a result, it would increases the probability of capturing accurate information about the impact of visual merchandizing on sales at Tesco significantly. Moreover, the selection of quantitative data collection procedure will help the study to include different advance statistical tools like mean, median, mode and standard deviation. Moreover, quantitative data collection procedure will also help the study to include regression and correlation technique, which is eventually add value to the research outcome.

As illustrated by Billig and Waterman (2014) selection of data analysis technique heavily depends on the data collection procedures. Now, as the study would use quantitative data collection process for assessing the exact amount of impact visual merchandizing can have on the sales at Tesco, it will use different statistical tools and techniques. The study will use advance software application like SPSS for analyzing the collected data accurately. Moreover, selection of SPSS will help the study to provide results through different graphical and pictorial forms, which will add value to the eventual outcome. The data analysis procedure will also include different tables for evaluating the captured data in an effective manner.

Maintenance of ethical aspect is critical for any research study for accomplishing all the goals and objectives in an effective way (Creswell, 2013). The ethical statement is required for every research study as the fundamental purpose of the statement is to protect the rights and welfare of the participants of the research. The researcher should reflect the primary legal and ethical responsibilities towards the research participants along with the basic values of research such as justice, beneficence, respect for each of the persons and integrity. Therefore for this study the research will maintain the basic integrity and respect towards the participants and their privacy. It will also maintain the basic guideline provided by the data protection acts in order to ensure the completion of the study within the given time frame. The data collector will also remain unbiased for ensuring respondents can share their actual views and perspectives in an effective way.  

Conclusion: 

From the above illustration, it can be assessed that visual merchandizing is a key aspect of marketing in retail sector. It has the capability to influence purchasing decision of the consumers in a major way. For that reason, ineffective utilization of visual merchandizing procedure can create severe business related challenges for the retail sector organizations. Here, the study will focus on assessing the exact amount of impact visual merchandizing can have on the sales level of Tesco. Therefore, it is likely to provide the best possible way to utilize independent variable visual merchandizing for creating positive impact on dependent variables such as consumer behaviour, motivation and purchase decision. In addition, the outcome of the research study will also help retail businesses to identify the suitable method for increasing the effectiveness of the visual communication procedure for maximizing the impact on sales volume.  

References:

Bailey, S., & Baker, J. (2014). Visual merchandising for fashion. A&C Black.

Bhatti, K. L., & Latif, S. (2014). The Impact of Visual Merchandising on Consumer Impulse Buying Behavior. Eurasian Journal of Business and Management, 2(1), 24-35.

Billig, S. H., & Waterman, A. S. (Eds.). (2014). Studying service-learning: Innovations in education research methodology. Routledge.

Creswell, J. W. (2013). Research design: Qualitative, quantitative, and mixed methods approaches. Sage publications.

Flick, U. (2015). Introducing research methodology: A beginner’s guide to doing a research project. Sage.

Jain, V., Sharma, A., & Narwal, P. (2012). Impact of Visual Merchandising on Consumer Behavior towards Women’s Apparel. International Journal of Research in Management, 5(2), 106-117.

Kim, J. (2013). A study on the effect that VMD (Visual Merchandising Design) in store has on purchasing products. International Journal of Smart Home, 7(4), 217-223.

Kouchekian, M., & Gharibpoor, M. (2012). Investigation the relationship between visual merchandising and customer buying decision case study: Isfahan hypermarkets. International Journal of Academic Research in Economics and Management Sciences, 1(2), 268.

Krishnakumar, M. (2014). The role of visual merchandising in apparel purchase decision. IUP Journal of Management Research, 13(1), 37.

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Mehta, N., & Chugan, P. K. (2013). The impact of visual merchandising on impulse buying behavior of consumer: a case from Central Mall of Ahmedabad India.

Panneerselvam, R. (2014). Research methodology. PHI Learning Pvt. Ltd..

Park, H. H., Jeon, J. O., & Sullivan, P. (2015). How does visual merchandising in fashion retail stores affect consumers’ brand attitude and purchase intention?. The International Review of Retail, Distribution and Consumer Research, 25(1), 87-104.

Pegler, M. M. (2012). Visual Merchandising. Kanada: Farchild Books.

Siirila, E. R., Navarre-Sitchler, A. K., Maxwell, R. M., & McCray, J. E. (2012). A quantitative methodology to assess the risks to human health from CO 2 leakage into groundwater. Advances in Water Resources, 36, 146-164.

Silverman, D. (Ed.). (2016). Qualitative research. Sage.

Taylor, S. J., Bogdan, R., & DeVault, M. (2015). Introduction to qualitative research methods: A guidebook and resource. John Wiley & Sons.

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Vaioleti, T. M. (2016). Talanoa research methodology: A developing position on Pacific research. Waikato Journal of Education, 12(1).

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