Influence of Visual Merchandising Over Retail Store Sales - A Research Report in Indian Context

International Journal of Application or Innovation in Engineering & Management (IJAIEM)
Web Site: www.ijaiem.org Email: editor@ijaiem.org

Volume 5, Issue 5, May 2016
ISSN 2319 - 4847
Influence of Visual Merchandising over Retail

Store Sales - A Research Report in Indian Context
Syed Md. Faisal Ali Khan1, Dr. Devesh Kumar2
1
Research Scholar (PhD) Shri Venkateshwara University, Gajrola, India

2
Assistant Professor Shri Venkateshwara University, Gajrola, India
ABSTRACT
This paper brings is based on visual merchandising and its influence over purchase decision in an organized retail store. In
current scenario where there is high competition between organized and unorganized retailers and among organized retailers
few organized retailers uses visual merchandise as tool to increase their sale. Here in this report various comparison has been
made using SPSS 18.0. In this report it has been reflected that product display, store ambience, floor merchandising,
promotional strategy and discount signage are the visual merchandising elements which invokes consumer in purchase
decision. In this report five hypotheses are proposed and is tested using co-relation analysis. Factor analysis is used to test the
reliability of the questionnaire framed for primary data.
Keywords: Organized Retailers, Unorganized Retailers, Consumer Behavior, Visual Merchandising, and Promotional
strategy.
Introduction
Window display is often the contact the customer is having with merchandise. This type of display is often used in
organized retail stores. Visual merchandising is briefly defined, as the presentation of a store and its merchandise in
ways that will attract the attention of potential customers and motivate them to make purchases (Diamond et.al 2007).
There is a radical change happening in the Indian retail market. With the urbanization the purchasing power of the
consumer is also increasing. The consumers are becoming more brands conscious (Mehta et.al 2014). In the past
decade there are major changes happening in the retail. Retail is among one of the growing sector in Indian market.
The retail sector in India is observed to be emerging as one of the largest sectors in the economy. In 2015, the total
market size was estimated to be around US$ 600 billion and thereby registering a CAGR of 7.45 per cent since 2000.
It is expected that the Indian retail industry is expected to grow to US$ 1.3 trillion by 2020 and registering a CAGR
of 9.7 per cent between 2000 -2020 (KPMG 2016). Currently the rank of India in global retail development index is
14th which has slipped down by 9 ranks as compared to last years rank (Kearney, 2013).The key drivers which are
adding flavor to the growth in this sector are change in demographics and changing consumer profile, increase in
number of international brand available in the local market, impact of Government policies on economy, increase in
urbanization, availability of credit, development of infrastructure, technological changes and real estate development.
After the penetration of FDI in retail sector, Indian retail sector is expected to grow by 15 to 20 percent in next five
years (Kearney, 2012).
In current scenario organized retailers are trying to create and develop the image of retail outlets in customer mind
through visual merchandising to develop loyalty in customer. This can be done by strategic planning and merchandise
featured and location that are supposed to be placed (Diamond and Diamond, 2007).
It has been observed that visual communications that are been exposed to the customers in the retail outlet has more
than 80% affect other sensory organs and hence it is said that it is an efficient and inexpensive way of marketing than
other means of communications (Tullman & Clark, 2004). In organized retail stores, visual merchandising is a key
driver to encourage a customer to purchase any product. Window display is another important criterion of visual
merchandising. Window display is the first impression of the store over customer (Mehta & Chugan, 2012, Mehta &
Chugan, 2013)
Review Literature
Levy & Weitz, 2012 in their study said that smooth customer flow influence customer purchase decision. Factors
which influence customer purchase decision include well designed retail store layout with optimal store space for
customers to walk-in.
Vrechopoulos, OKeefe, Doukidis, and Siomkos (2004), in their study illustrated that store layout is an important
determinant of store image. They further focused on the three major store layout types which include Store Grid, Store
Freeform & Store Racetrack/boutique. They explained that store Grid layout deals with the routine and planned
shopping behavior while freeform layout deals with the time which customers are willing to spend in the store on the
other hand Store Racetrack/boutique is the layout which deals with the movement of the customers throughout the
Page 12

ISSN 2319 - 4847
store. Their study r suggested that for the usefulness & entertainment of any customer a freeform layout was most
preferred by customers. They further added that for the ease of use, customers use to prefer the grid layout. A good store
layout provides businesses opportunity to increase sales.
Bellizzi, Crowley, and Hasty (1983) in their study expressed color encourages sales. Color is an important driver for
influencing the purchase decision. He further added that the first things which customers see before entering a retail
store are the color. Every individual responds to color in different ways.
Mauger (1964) in his study explained lighting creates an effective atmosphere that makes products more appealing and
influence customers to shop more.
Colborne (1996) in his further illustrated retail lighting is an important factor for apparel businesses. He said that
lighting creates an atmosphere which attracts customers towards stores in order to make them purchase. With proper
and effective lightening, customers are able to match up their items & visualize how merchandise will look after the
purchase.
Bell & Ternus (2012) in their study supported the theories given by earlier scholars and added lighting can enhance
the retail space and increase the value of product in customers mind. The marginal benefits of the products were
enhanced.
Yalch and Spangenberg (2000) in their study said that music has significant effect on retail setting on shopping time.
Music plays deep impact on time, exploration, communication and satisfaction in retail setting.
Sen, Block, and Chandran (2002) in their research advocated that window displays has an influence on store entry &
purchase decisions. Window display creates an awareness of merchandise type for the entry on the other hand it shows
how the merchandise is to be presented in window displays which would influence buying decision.
Scope of the Study:
The scope of this research is limited to the state of Uttarakhand of India.
Objective of the Study:
1. To explore visual merchandising as a driver of buying decision.
2. To evaluate and access influence of visual merchandise on buying behavior of consumer.
Research Methodology:
The present study is descriptive cross sectional study in nature. The methodology is designed is to examine visual
merchandise and its influence on buying behavior of consumer. The focus is made on to examine the determinant of
influencing the buying behavior of consumer. Explanatory study was made and was taken into consideration with the
quantitative research strategy. The study is based primary as well as secondary data.
Sampling
In order to identify the impact of visual merchandise on buying pattern customer with age 14 years and above were
selected. The primary data was collected from five major cities of Uttarakhand including Rudrapur, Roorkee, Kashipur,
Dehradun, and Haldwani. 200 Questionnaires were distributed to the consumers of the said cities who were identified
shopping to organized retail stores. 50 samples were taken purposively from Dehradun and rest was equally distributed
from other 4 cities. Out of 200 questionnaires only 164 completely filled questionnaires were taken into account. The
collected data was analyzed in SPSS and Chi Square test, co-relation and factor analysis were used for data analysis
and data integrity.
Research Hypothesis:
H1: Product display has significant impact on buying decision.
H2: Store Ambience has significant impact on buying decision.
H3: Floor Merchandising has significant impact on buying decision.
H4: Promotional has significant impact on buying decision.
H5: Discount Signage has significant impact on buying decision.
Table 1: Data Analysis and Interpretation
Description
N (%)
Questionnaire handed over in person
200
Completely filled questionnaire and further taken for the analysis
164
Response rate
82
In the given study 200 Questionnaires were distributed to the consumers of the said cities who were identified shopping
to organized retail stores. Out of 200 questionnaire, 164 completely filled questionnaire were identified, as to taken for
analysis, giving a response rate of 82%.
Page 13

ISSN 2319 - 4847
Table 2: Demographic Variables

Demographic Variables
Frequency
Percent [%]
98
66
59.76
40.24
4
56
33
28
19
24
2.43
34.14
20.12
17.04
11.58
14.63
1
20
75
68
0.609
12.19
45.73
41.46
3
23
46
68
24
1.82
14.02
28.04
41.46
14.63
110
49
5
67.07
29.87
3.04
Student
Salaried
Business
Unemployed
Housewife
Family size
44
36
38
12
34
26.82
21.95
23.17
7.31
20.73
0 to 1
1 to 2
2 to 4
4 to 7
More than 7
3
20
112
29
0
1.82
12.19
68.29
17.68
Gender
Male
Female
Age
0-20 years
20-30 years
30-40 years
40-50 years
50-60 years
60 and above
Education
No schooling
Secondary school
Under graduation
Post graduation
Income
Less than 5000
5000-10000
10000-25000
25000-50000
50000-100000
Marital Status
Married
Unmarried
Divorced
Occupation
Page 14

ISSN 2319 - 4847
Figure 1: Demographic Variables

Table 3: Factor Analysis
Eigen Value
% of Variance
2.227
45.1%
Variables
Product Display
Store Ambience
Floor Merchandising
Promotional Strategy
Discount Signage
1.388
1.747
1.467
2.744
71%
45%
49%
70%
Alpha Value
0.701
0.722
0.704
0.698
0.684
Extraction Method: Principal Component Analysis with varimax extraction.

Reliability Analysis for Questionnaires: First the reliability test for all five variables was carried out using SPSS
18.0. The Cronbachs Alpha of the reliability test was 0.701 for product display, 0.7 for Store Ambience, and 0.702 for
floor merchandising, 0.699 for promotional strategy and 0.69 for discount signage; this means the questionnaire is
reliable.
Table 4: Correlation with buying decision
Variables
Pearson Coefficient
Significance (p)
Product Display
0.41
0.00
Store Ambience
0.20
0.00
Floor Merchandising
0.38
0.00
Promotional Strategy
0.50
0.01
Discount Signage
0.31
0.00
Pearson correlation tests were used to see the correlations existing between the dependent variable (buying behavior)
and independent variables mentioned above. In addition linear regression analysis were used to conduct hypothesis
testing using the buying behavior as a dependent variable and each visual merchandising variable
Hypothesis
Intercept
H1
2.601
H2
2.915
H3
2.788
Table 5: Hypothesis Testing and Outcome

R Square
p-value
Conclusion
Co-efficient
0.170
0.000
Customer buying is influenced by
product display.
0.045
0.005
Customer buying is influenced by
store ambience.
0.156
0.000
Floor Merchandising has influence
buying decision of a customer.
Page 15

H4
2.221
0.261
0.001
H5
2.223
0.091
0.000
ISSN 2319 - 4847
Promotional Strategy influence buying

decision of consumer.
Discount Signage influence buying
decision of consumer.
In the above table a Pearson correlation test, a significant correlation test was shown between the buying behavior and
product display.
H0: Product display has no significant impact on buying decision.
H1: Product display has significant impact on buying decision.
Here the p value is 0.000 which is less than 0.05 so in this case we will reject the null hypothesis and accept
alternative hypothesis. So we can say that there is impact of product display on buying decision of customer.
H0: Store Ambience has no significant impact on buying decision.
H1: Store Ambience has significant impact on buying decision.
alternative hypothesis. So we can say that there is impact of store ambience on buying decision of customer.
H0: Floor Merchandising has no significant impact on buying decision.
H1: Floor Merchandising has significant impact on buying decision.
alternative hypothesis. So we can say that there is impact of floor merchandising on buying decision of customer.
H0: Promotional strategy has no significant impact on buying decision.
H1: Promotional strategy has significant impact on buying decision.
alternative hypothesis. So we can say that there is impact of promotional strategy on buying decision of customer.
H0: Discount Signage has no significant impact on buying decision.
H1: Discount Signage has significant impact on buying decision.
alternative hypothesis. So we can say that there is impact of discount signage on buying decision of customer.
the
the
the
the
the
CONCLUSION
This study illustrates some external factors which influence buying behavior of a customer. From the review literature it
has been clearly stated that store ambience has a deep impact on influencing buying decision of a customer. Color,
music store location, product display, music plays a vital role in invoking customer to make purchase. This was theory
was further supported by the outcome of the result. The results proved that there is a relationship between customers
buying behavior and product display, store ambience, floor merchandising, promotional strategy and discount signage.
When consumers are made to exposed to these visual stimuli, it is observed that they are more likely to make a
purchase. These visual effects make an effect in consumer mind which makes a desire to purchase a product. It has also
been observed that more a customer spends time in a store more he likely to make a purchase and these merchandise
factors tends to retain customer more in a store. Retailers must use these concepts to increase their sale. As seen earlier
window display is the first touch point of store with the customers. Promotional strategy and discount signage will
enhance the experience of the store.
Upcoming Research Paper to be published shortly: Influencing Factors for Online Purchase A case Study of Delhi
& NCR Region of India
REFERENCES
[1] Diamond & Diamond (2007), Contemporary Visual Merchandising and Environmental Design, Fourth Edition,
Published by Prentice Hall. Pearson Education, Inc.
[2] Mehta & Chugan (2014), Impact of Visual Merchandising on Consumer Behavior: A Study of Furniture Outlets,
Universal Journal of Management 2(6): 207-217, 2014, DOI: 10.13189/ ujm.2014.020601.
[3] Kearney,
A.
T.
(2012),
Retail
Global
Expansion:
A
Portfolio
of
Opportunities,
http://www.atkearney.com/documents/101 92/3903b4b7-265c-484e-932c-50169e5aa2f3, accessed on 10/10/2013.
[4] Kearney, A. T. (2013), The 2013 Global Retail Development Index Global Retailers: Cautiously Aggressive or
Aggressively Cautious?
[5] Tullman M. L. & Clark, R. K., (2004), Revitalizing Visual Merchandising-Restoring Balance to Retail
Environment Entails Engaging all Five Senses, pp. 1-2.
[6] Mehta, N. & Chugan, Pawan K. (2012), "Visual Merchandising: Impact on Consumer Behavior (An Exploratory
Study of Apparel Segment in Ahmedabad City)," Mapping the Global Future: Evolution Through Innovation and
Page 16

ISSN 2319 - 4847
Excellence, Reading Book, Delener, N. Fuxman, L. Lu, F. V. & Rodrigues, S., Global Business and Technology
Association,
Fourteenth
Annual
International
Conference,
New
York
pp.
607614,http://papers.ssrn.com/sol3/papers.cf m?abstract_id=2217487
[7] Mehta, N., & Chugan, Pawan K. (2013), The Impact of Visual Merchandising on Impulse Buying Behavior of
Consumers: A Case from Central Mall of Ahmedabad India, Universal Journal of Management 1(2), pp. 76-82.
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2355742
[8] Vrechopoulos, A. P., OKeefe, R. M., Doukidis, G. I., & Siomkos, G. J. (2004). Virtual store layout: an
experimental comparison in the context of grocery retail. Journal of Retailing, 13-22.
http://dx.doi.org/10.1016/j.jretai.2004.01.006
[9] Bellizzi, J. A., Crowley, A. E., & Hasty, R. W. (1983). The effects of color in store design. Journal of Retailing, 59,
21-45. Retrieved from http://www.scribd.com/doc/83749608/Effect-of-color-on-store-design
[10] Colborne, R. (1996). Visual merchandising the business of merchandise presentation. Albany, New York: Delmar
[11] Mauger, E. M. (1964). Modern display techniques. New York, NY: Fairchild.
[12] Bell, J., & Ternus, K. (2012). Silentselling best practices and effective strategies in visual merchandising (4th ed.).
Manhattan, New York: Fairchild
[13] Yalch, R. F., & Spangenberg, E. R. (2000, August). The effects of music in a retail setting on real and perceived
shopping
times.
Journal
of
Business
Research,
49,
139-147.
Retrieved
from
http://www.sciencedirect.com/science/article/pii/S014829639900003X
[14] Sen, S., Block, L. G., & Chandran, S. (2002). Window displays and consumer shopping decisions. Journal of
Retailing
and
Consumer
Services,
278-290.
Retrieved
from
http://ac.els-cdn.com.er.lib.kstate.edu/S0969698901000376/1-s2.0S0969698901000376-main.pdf?_tid=887af440-9741-11e3-926200000aacb361&acdnat=1392579527_393bdbbe72e8681f4fe0f0db3cbb0cb7
[15] Neha P. Mehta*, Pawan K. Chugan, The Impact of Visual Merchandising on Impulse Buying Behavior of
Consumer: A Case from Central Mall of Ahmedabad India, Universal Journal of Management 1(2): 76-82, 2013,
DOI: 10.13189/ujm.2013.010206 Online:http://www.ibef.org/industry/retail-india.aspx
AUTHOR
Syed Md. Faisal Ali Khan has received his Bachelor of Computer Application from Patna Public
School of Information Technology, MCRP University in 2005 and PGDBM (MBA Equiv. by
AICTE) from New Delhi Institute of Management, New Delhi in 2008. During his Post Graduation
he opted Marketing and Information Technology as his core specializations. He joined Aditya Birla
Retail Limited as a Branch Manager Operations in 2008. He served the organization till late 2009
and joined SGI, Rudrapur as Asst. Professor. Currently he is final year PhD research scholar in Shri
Venkateshwara University, Gajrola. His area of interest is retailing and consumer behavior. He has published around 15 research
paper in an international journal of repute including Thomson Reuters. He has also presented paper in International Seminars and
International Conferences abroad. Currently he is working on gap analysis between customer expectation and service deliver from
organized retail industry.
Page 17

Influence of Visual Merchandising Over Retail Store Sales - A Research Report in Indian Context

Diunggah oleh

Informasi Dokumen

Judul Asli

Hak Cipta

Format Tersedia

Bagikan dokumen Ini

Bagikan atau Tanam Dokumen

Opsi Berbagi

Apakah menurut Anda dokumen ini bermanfaat?

Apakah konten ini tidak pantas?

Hak Cipta:

Format Tersedia

Influence of Visual Merchandising Over Retail Store Sales - A Research Report in Indian Context

Diunggah oleh

Hak Cipta:

Format Tersedia

International Journal of Application or Innovation in Engineering & Management (IJAIEM)

Web Site: www.ijaiem.org Email: editor@ijaiem.org

ISSN 2319 - 4847