By Bruce A. Barteldt Jr.
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.
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.
- 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.
THE BOTTOM 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., AIA, RDI, LEED AP 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.
Photo Credit: Vitold Muratov