Grocery Business - February 2019

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Calculating ROI

ROI Calculation is Not Widespread

While ROI may be important as a desired metric, few respondent companies actually calculated it. ROI, when calculated, also varied among all the respondents regard less of company type. Answers ranged from payback on capital investments, to energy savings and customer feedback.

Those who do calculate ROI, however, do it consistently; the majority of whom calculated it on all their projects. While desired ROI outcomes vary among groups, one aspect was consistent among the three: the typical timeframe for calculating ROI was relatively short term (more than 1 year, but less than

3 years).

Shop! found that 60% of retailer respondents calculated ROI on a store redesign. Only 27% of the designer respondents calculated ROI on a store redesign, and 19% of manufacturer respondents calculated ROI on products sold for store design.

ROI is greater when a holistic approach is taken. When the moti vators are focused on subjective as well as objective goals, the scope becomes robust and impacts more customer touch points, resulting in a cohesive instore experience that inherently reaps tangible results.

While objective goals of overall sales and instore traf fic continue to be of high importance, more subjective goals of brand perceptions and shopper engagement are undeniably proving to hold significant value as they often drive overall sales, albeit less directly and immediately. The power of “buzz,” online reviews, bloggers, and others are highly influential, whether positive or negative. The store experience is a key touchpoint that can create passionate brand advocates, or detractors.

“It’s impossible to know how long a redesign will last. We used to believe seven years, but now we are looking at five. Maybe this too will change soon, but if so, we need to really look at how to assess ROI and our whole way of what redesign looks like. ” — retailer

KEY LEARNING:

Given the importance of ROI for retailers in evaluating store design success, designers and manufacturers must strive for the same metrics. Tangible impacts on sales/profits, foot traffic, and conversion rates are important, as are less tangible impacts on brand perceptions, loyalty, shopper engagement and experience.