In Search of
Retail Design ROI:
Myth or Reality?
• And where exactly has the new design been
unveiled? Was it at an existing location or a new
site? A new site brings in multiple issues affecting the customer’s response: visibility, adjacent
tenants, parking, traffic patterns, etc.
ROI IS LIKE THE HOLY GRAIL for the
industry. But so often, it is more like “Monty
Python’s Holy Grail” (“bring out yer dead. ...
bring out yer dead. …”).
The pursuit of measurable ROI is a worthwhile pursuit—we should always be focused on
a measurable return on a design investment.
But the key word here is “design.” This is where
it gets rather dicey. Because in reality, measuring pure design ROI is next to impossible.
So there, I said it.
Any design firm salesperson can tell a retailer
that his or her company has “proven” a design
ROI methodology, but by now I believe many
industry veterans are rather skeptical of such
a pitch. To be clear, I am not asserting that
elements of a new design can’t be measured
in terms of cost/benefit. However, we must
emphasize a critical approach and be certain
we’re not fooling ourselves.
THE BOT TOM LINE
Unless you can isolate or eliminate the implications of multiple variables, we may collectively be looking at skewed data. And if that is
the case, we might as well get back to the “other
method”—an intelligent guess.
We have found that every design decision
should be considered in direct relation to its
potential impact on triggering customers’ decision to buy. Then evaluate the cost of that design
strategy relative to increased sales potential.
Are these two quotients out of balance? Will you
pay too much for the effect and not see a comparable result?
Let’s say we want to lower the ceiling in a particular area of a store in order to create a more
intimate shopping experience for a specialized
product array. Lowering the ceiling will cost
$10,000. Will the additional cost pay itself back
and then some? Break it down—measure the
data on that particular product array and track
fluctuations for that alone. Keep going, one area or one new concept at a time. Always isolate the impact area from outside forces.
In the end, there still are innumerable variables. My point is that
designers must shift their process away from “design for design’s
sake” toward ROI as THE design driver. And while ROI still will
be the Holy Grail for which we must always continue to seek (and
never find), over time good things can and must follow.
BRUCE A.BARTELDT, JR.
partner and national studio
ROI is next to
WHY IS THIS SO HARD?
It is far more difficult to measure the results of new prototype
retail design. Why? There are many factors besides design that
contribute to store sales—that either individually or collectively
result in a uptick (or reduction) in sales performance.
• First off, customers tend to react positively to a “fresh” design.
There will be a resulting boost in sales on that alone. Actually,
in the case of a mediocre design, you’re more likely measuring
how customers are responding to change than how they are reacting to the merits of a new design.
• A new prototype often introduces new aspects of operations
or merchandising that may have little to do with how a store
looks or whether or not more expensive flooring or lighting matters. For example, the new proto may have also included an edited
assortment, eliminating clutter and clarifying the offering, making the product sing rather than be lost in a quagmire of choices.
But, that’s really not a design strategy, it’s a merchandising strategy. Does it falsely suggest that the design itself was the catalyst
for sales boosts? Has a coincident adjustment in pricing strategy
affected customer response?
• Another example: While a decision to eliminate the cashwrap
is a design decision, it is really more of a customer service strategy
that results in better-trained, tablet-enabled sales associates who
improve customer service.
Bruce A. Barteldt, Jr., AIA, RDI, LEED BD+C, is a partner and
national studio principal, retail, of Charlotte, N.C.-based Little,
where he leads all retail activity. He also serves on A.R.E.’s Board of
Directors, and chairs the association’s DREAM Team of retail designers. Contact him at 704-561-3461 or BBarteldt@littleonline.com.
TALKING ABOUT ROI
The lack of solid information validating retail environments invest
ments continues to pose a challenge for the industry. In response,
A.R.E. is pursuing an initiative to gather information and get some
conversation started about returnoninvestment benefits of investments
including new store design, lighting, fixtures, visual merchandising,
instore communications, and more. Retailers, design firms, and A.R.E.
members interested in continuing the discussion are asked to contact
Karen Schaffner, email@example.com, 9542414810.
Confidentiality requests will be honored.