White Paper

The ultimate
Visual Merchandising
Handbook
A paper about the importance of Visual
Merchandising, Tips & Tricks and more.
Table of content
01 Introduction

02 What is Visual Merchandising

03 Values and Benefits of VM

04 VM as an Art and a Strategy

05 Why Visual Storytelling?

06 Tips and Tricks

07 How to measure VM strategies

08 Final words: Future trends in VM

 1
Introduction
As brands and retailers increasingly look to pour more money into
their online efforts, there is a recognizable need to remember the
value of the physical retail store to the customer experience and
wider brand identity.

More than ever, the physical store has to be looked at as a place to

sell more than just merchandise. Modern consumers, especially
Millennials and Generation Z, crave experiences. The very idea of
what a store is has changed completely. It’s morphed from a place
where people come to buy to a place where people come to discover.

Visual Merchandising (VM) must be factored into the business

equation in the earlier stages of marketing and product development.
It is the first tangible representation of a brand’s new marketing efforts.
In order to communicate the intended messages properly, stores must
be merchandised consistently. This requires investment in both, time
and resources.

This brand book gives you an insight into the nature of Visual
Merchandising, which role it plays in building customer
relationships and how you are able to measure your VM efforts.

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What is Visual
Merchandising?
What is Visual Merchandising? It’s presenting your products to
customers in the most attractive way - with a focus on driving
commercial performance and maximize sales. The impact of
visual appeal cannot be overstated in retail. Visual Merchandising
is able to tell a story, to represent your brand’s values and inspire
your customers.

It highly contributes to the first impression that customers get

from your brand. It all starts with the window display. Gone are
the days they were thought of as mere product shelving. The
front window is revealing the soul of your store at first blink.

But this is not where the work ends. Once you are inside, the
store itself should arouse you with a specific artistic presence
which is known as Visual Merchandising.

Like any other medium, this ephemeral art form possesses

certain attributes that define yet differentiate it from other
creative expressions. But as consumer tastes evolve and become
more demanding, merchandisers must continually reevaluate the
role of contemporary Visual Merchandising strategies.

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Values and
Benefits of VM
The single and most important value of Visual Merchandising is
to engage and inspire your customers. Encourage them to buy the
products you want them to buy and therefore increase your sales,
margin and return on space. If shoppers can feel a certain message
delivered to VM practices within a store they will feel motivated to
get involved with your brand. The way you merchandise your store
is how your customers will receive the story behind it. Of course
therefore you also need to know your customers’ taste. There
should exist a good balance between what they want to see and
what you want to tell them.

Designing a store is so much more…

• Create experiences
• Tell immersive stories
• Develop new states of minds
• Generate moments, landmarks and points of view
• Adding value to the shopping journey
• Effective space planning
• Window displays are the eyes to your store’s soul

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Visual Merchandising is both -
an art and a powerful strategy
The foundation of Visual Merchandising

Which skills are required from a good Visual Merchandiser and

which of them come to them as inner gifts? Organization and
self-management, communication and interpersonal skills can
be learned. The innovative and creative aspects are most of the
time the facets that really distinguish VM’s from each other. What
does that mean? Let’s break 7 aspects down to prove why VM is
an expression of art.

What you need to express VM as an art:

Talent, Concept, Medium, Context, Style, Value, Aesthetics

Talent

The chief aim of a Visual Merchandiser is to maximize sales by

communicating with the target audience and creating a positive
atmosphere. But as personal experiences mold artistic expression,
the presentation of VM is intrinsically linked to its creator –
a reflection and expression of their personality. While the ability
to execute design is more academic, the intelligence needed to
conceptualize these visual creations is not something easily taught.

Concept

There are four major Visual Merchandising messages: critical,

reflective, testimonial, and exaltation. Within these messages
lie manifest, codified, or intellectual concepts. When you dive

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deeper into these concepts, personal themes may emerge that

express feelings, ideals, motivations and experiences. Likewise,
environmental themes including political, religious or philosophical
ideologies of individual creative directors may also exist within
their creations.

Most brands, however, tend to shy away from statement-making

displays. Visual Merchandisers have the responsibility to express
the principles and values of the client.

That said, it’s nearly impossible to erase the complete individual

identity of the artist. And sometimes, when you commission a
more famous artist (perhaps with a more famous temper), you
must understand that by employing their name and reputation,
you may bite off more than you can chew.

By telling a story, you help the customer better understand

the product and enable the buying decision.

Medium

In its format, both the store’s exterior and interior showcase

a storyline. This visual storytelling is similar to that of an artist’s
rendering - with regards to composition, proportion and lighting.

However, artistic techniques and disciplines are only the means

expression, not the art itself. Consider hereby the differences
between photographic and digital art. Contemporary Visual
Merchandising and window dressing work in the middle of both,
on presentation of merchandise with a commercial view on top
of the mind.

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Context

The ideal outcome of any conception regarding VM is to convert

shoppers into buyers. This means that Visual Merchandisers have
to set products in the context of merchandise but also in an
aesthetically pleasing fashion.

Considering contemporary art disciplines and events, artistic

displays often reflect a particular situation - place and time -
which the merchandiser chooses. This means that the context is
often influenced by personal preferences or by the merchandiser’s
personal environment.

Style

Visual Merchandiser The work of visual art of the last century is influenced by the
noun. [ vizh-oo-uh I ] artistic styles that have defined certain aesthetic, conceptual or
[ mur-chun n-dahyz-er ] ideological characteristics shared and assimilated in certain eras.

Someone who solves a problem Visual Merchandisers have obviously to stay up-to-date on latest
you didn’t know you had in a fashion trends, but yet understand the values and history of the
way you don’t understand. brand they are representing through their merchandising strategies.
Another aspect they should never neglect is always focusing on
See also wizard, magician
the customers that are targeted to buy from the brand. After all,
as consumers increasingly demand more personalized products
and experiences, it is up to the VM team to create a sense of loyalty
with a brand. They do this through taking a trend and making it
their own – crafting a style – and embodying a specific personality.

Value

VM might be dependent on a viewer’s perspective and visual art,

but nevertheless it always has a purpose and value. You can’t
compare an art piece in MOMA with a shop window, no matter
how cool the latter may be.

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There are certain skills required by Visual Merchandisers, they have

to be able to transcribe styles of a particular era into something
customers easily understand. They should have the ability to
approach certain themes with an objective yet creative eye.

Aesthetics

Art is not synonymous with beauty or aesthetics, although it’s

an intrinsic quality present in most. Aesthetics is completely
subjective and there is no parameter to define it. From the
viewer’s preference, personal conception, and cultural context,
all form aesthetic perceptions.

The globalization of Visual Merchandising – both in the context

of stores and e-commerce – are imposing the same visual tastes
across the planet. As Andy Warhol once said:

“Someday, all department stores will become museums

and all museums will become department stores.”
Andy Warhol
Visual Merchandisers who create a complete visual strategy are
artists in their field and their creations – from window dressing
to online stores to merchandising – this is already an art.

It’s not only linked to an attractive way of distributing the product

but also to the selling logic. The sales monitoring in relation with
the distribution of the product, let you define the consumers’
behavior, giving out important information about the product
and its presentation into the store.

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Why Visual
Storytelling?
In the current digital age, with information floating around us
constantly, trying to get our attention, visuals matter! It is a fact
that attention spans are notoriously shrinking. People get the
sense of a visual scene in less than 1/10 of a second and 65%
of the world’s population are visual learners.

Change the conversation from “I want this” to “I need this”.

Visual storytelling is the cornerstone of advertizing, but the

same is true for Visual Merchandising. Effective visuals are a
strategic asset.

Today’s consumers no longer simply want to buy – they’re looking

for a rewarding shopping experience, made of emotions – of stories.
Stories make you feel things. They help convey information and
help people retain information better.

Storytelling is a great way of conveying what your brand is about.

It helps create a value proposition, a point of difference, and
connecting products to a brand’s mission. Additionally, good
stories are worth remembering and sharing – a must in our
current social landscape.

Using Storytelling in Visual Merchandising

The human mind craves meaning. It even goes so far as to create –

even invent – connections. What’s more, if the mind cannot create
an orderly narrative from incoming information, it tends to ignore it.

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5 Why Visual Storytelling?

If your merchandising is styled haphazardly, potential customers

will not understand and, ultimately, will not buy. As such, selecting
new product and making sure it’s in the right store locations is a very
small part of a merchandiser’s responsibilities. The most important
part is to present the merchandise in visually and imaginative ways
that it engages the customer and compels them to buy.

Great merchandising should produce seamlessly clear storytelling –

through aesthetic sensibility and creativity. Merchandisers themselves
must be connoisseurs of lighting, layouts, window dressing, and
advertizing graphics.

Merchandisers must become master storytellers – creating a world

that customers can step into. They must choose the right decor,
products, and branding to design and curate the perfect exhibition
showcase concept – expertly telling stories with merchandise that
connects with the needs, desires, and the imagination of customers.

More tips and tricks about storytelling in Visual Merchandising can

be found in the following chapter.

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Tips and Tricks -
How to VM
Grouping by style or type Grouping by style or type
Color balancing
Keep it fresh and interesting A high density of products needs to be balanced with a practical way
Storytelling for customers to interact with them. This could be by brand, product
type, color or by price.
Use symmetry in displays
Focal points
Grouping separate categories or styles of clothes ensures there is a
Leverage technology
clear defined space that can easily be interacted with.
Always think from a
customer experience
point of view It’s one of the most common tools in a Visual Merchandiser’s toolkit,
especially when space is at a premium.

Color balancing

One of the most important aspects of a Visual Merchandiser’s job is

how he/she utilizes color. From the planning stage, creating product
collections and ranges based on color can heighten the cohesiveness
and visual styling of your store.

Whether you go for a high-contrast dramatic look or a palette of

matched tones, what’s important is that you balance them well
and utilize an array of placement and spacing variations to
achieve the right feeling.

Keep it fresh and interesting

Loyal customers return to your stores - that’s one of your main

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goals right? Deepen customer relationships with your brand and

make them come back over and over again. But this also means
that you have to mix up your VM game every now and then. If
shoppers aren’t seeing anything new when coming back, they will
less likely make another purchase. Even worse, they might get
bored and don’t have the feeling they will find anything interesting
in your store when everything looks too familiar. A fresh VM design
also helps you to experiment with more creative ways of displaying
your products and helping you to identify what makes your brand
stand out in the eyes of shoppers.

Storytelling

As mentioned before Visual Merchandising is able to tell a story.

Your brand story. Alongside telling the customers your brand story,
they are able to trigger an aspirational feeling as they create
inspiration for certain styles for the customer.

Picture: StudioXAG x Adidas Originals

at the Fouberts Place store.
Storytelling in a broader sense
Your creativity should know no bounds when it comes to store
design and temporary window displays and in-store installations.
Customers nowadays, do not only want to shop, they want to be
entertained. Surprise them with presentations they might not

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expect - that will definitely make them stop and consider to walk
into your store. And in the best case: buy.

Storytelling of collections in-store

Storytelling in Visual Merchandising is a way to incite imagination.
A tight visual concept can give a potential customer inspiration for
a certain style, and can trigger an aspirational feeling. Simply, it’s all
about conveying a theme through the way your products are laid out.

Keep your brand identity consistent

Your Visual Merchandising and the included storytelling plays a huge
role in how you retain your loyal customers and create an impression
in the minds of new shoppers. Whilst it is always important to change
and spice things up from time to time, you should make sure that the
displays always correspond to your brand identity.

Tell your customer their very own outfit story

By grouping items into a scene or showing consumers how to wear
certain products, you are essentially teaching shoppers. What you
want to achieve is that they say: “I want the lot”. How come? By
presenting them whole outfit displays, it’s easier for them to imagine
how to style those items at home. It puts such a clear picture of the
whole outfit into their minds that they don’t want to experiment
themselves with single items but buy the whole picture. Especially
since shoppers nowadays want access everything easily and fast.

Using symmetry in your displays

Repeating the way your products are folded, stacked, hung and
styled in symmetrical ways can elevate your store’s visual feeling.
When repeating products around a focal point and using symmetry
in styling your display, you can also look to incorporate different
color balancing techniques to deliver an even more striking look.

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ETRO store in Milan presenting outfits

on mannequins to create focal points.
Focal points

A focal point is a hotspot - in a store window for example - that

acts as the centrepiece in combination with styled mannequins
or displays, props or signage. Place focal points in key sight lines,
endcaps and entrance tables to a store or department. The focal
point acts as the ‘draw’ and can compel a shopper to enter the
store - or a specific area of your store - and take a closer look at
your products.

Effective space planning is key

Whilst packing as much product per square metre in as possible

may sound like a good idea from a sales perspective, it doesn’t
make for a particularly great in-store experience - especially in
stores with high foot traffic.

When planning your retail space consider how many gondolas,

mannequins, racks and backwall displays you have and how they
can be placed in a manner that feels appealing for a customer to
browse. This helps from a fixture cost planning perspective as well
as maximizing the valuable retail space that you’re paying for.

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Include trends, holidays and themes into your

VM calendar

Many stores will rotate their Visual Merchandising displays when it

comes to specific holidays or capitalizing on modern trends in order
to bring in shoppers and drive sales with a specific angle and story.

Make sure you plan your VM efforts well in advance of holidays to

maintain a competitive advantage and allow more time to create a
better product collection - and ensure you have all of the necessary
fixtures and signage to create the best display possible.

Think about the Customer Experience

All those tips become worthless if you don’t have the probably most
important factor in mind: think like your customer and look through
the eyes of your customer. It’s all about how a prospective buyer
makes the decision to enter your store to their feelings browsing
until they exit and make a purchase.

All those tips become worthless if you don’t have the probably
most important factor in mind: think like your customer and
look through the eyes of your customer.

You have to understand what your target audience wants and

needs to create more relevant, effective VM displays. For example,
a customer in a high-end retail store will expect the store to give
off a luxurious feel and make them want to imagine how their
home would look with the inclusion of your products.

Introduce technology! Everyone does.

How to easen up things? With technology! It’s not a surprise that

technology takes over our everyday and working lives. It just
makes a lot of processes way easier. When it comes to Visual

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Merchandising, teams can hugely benefit by the use of technology

to help them plan and merchandise the collection in ways that
are both, attractive and can help drive sales performance in the
most efficient way possible. The store is a tool of communication, and
it’s the successful retailer who will strategically curate the deployment of
technology into the store to expand the dialogue
with the targeted customer. It’s changing the way Visual Merchandising
takes place in that it allows stores to change their in-store content
anytime they want. From media displays to interactive floor models,
creativity knows no bounds.

Windows are the eyes to your store’s soul

The customer engagement starts even before they have set foot in
your store. But in a world where consumers have their faces buried
in their phones, you only have a few seconds to attract customers
to your store.

That’s why the window is really your first chance to grab your guest’s
attention. The purpose being to stop customers in their tracks.

Shop windows symbolize the job of a host – the smiling face that
greets passersby, the wind of change that delivers new seasons.
Important to remember is hereby, that a dynamic and eye-catching
window display doesn’t mean a big budget. Often the most inventive
windows are the result of limited budgets, those where you have had
to stretch your imagination in creative terms rather than financial.

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How to measure
VM strategies
As we mentioned above, Visual Merchandising serves the customer,
makes the shopping experiences inspiring and is able to increase
sales, if you know how to implement it correctly.

But, as with any other business as well, every action in-store should
be able to be measured. There’s the need of following up and evaluate
the performance of your VM efforts. Otherwise you are not able to see
if they actually worked and increased sales.

Building VM into your overall marketing plan should be considered

as an investment, and not as an expense. We present two ways to
measure the effectiveness of VM. In the following section we will
also explain how “simple” add-on sales can effectively increase the
turnover within, let’s say one year. Why? Because it’s easier to sell
to a person that has already entered your store than trying to get
more people into the store. In this case, VM can act as a silent
salesperson.

The basket size basically describes the value of the shopping

basket: Sales divided by number of customers.

Naturally there should always be targets set, and follow ups to see
if the window displays are performing as they should, and analysis
to find out what is working and what is not.

Example for add-on sales: How much do 10 euros add-on sales for
4 customers per day increase the turnover in 1 year?

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Taking a retail store in consideration that is open from Monday to

Sunday, 4,5 weeks per month. The target is to make $ 10 add-on sales
respectively with 4 customers. To sell those add-on items they should
pragmatically and cleverly be merchandised in the store to get the
customers’ attention. The task of Visual Merchandisers is therefore,
to place those add-odd items in this way, that sales associates have
an easy job to suggest those to customers (e.g. for rounding up a
whole outfit and give it an extra kick). The add-on sales target is also
taken into account in window displays, in-store campaigns and in
social media marketing campaigns. Let’s break it down: Per day:
$ 10 x 4 = $ 40, Per week: $ 40 x 6 = $ 240, Per month: $ 240 x 4.5 =
$ 1,080, Per year: $ 1,080 x 12 = $ 12,960

Per day: $ 10 x 4 = $ 40,

Per week: $ 40 x 6 = $ 240
Per month: $ 240 x 4.5 = $ 1,080
Per year: $ 1,080 x 12 = $ 12,960

You see, you are able to increase the yearly turnover by almost
$ 13,000. And here we are only speaking of add-on sales. Imagine
what main pieces of a collection can do, when merchandised
creatively and strategically.

Translating add-on sales targets for in-store teams

Imagine a company that has $ 200,000 turnover per year. They want
to increase sales by 10% ($ 20,000). Now the question is how to make
a sales target for add-on sales more reachable and easier to grasp for
retail employees? How can a VM do his or her work in a way that is
aiming for the target while planning and creating the displays?

What you can do is simpy divide the big amount into monthly, weekly,

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daily targets and even divide it into product levels. This basically
signifies using the basket size option, only in a reversed way.

Let’s assume the store is open six days a week for 4,5 weeks per
month. In order to reach the target of $ 20,000, the company needs
to have additional sales: $ 20,000/12 ≈ $ 1,667 per month, $ 1,667/4.5
≈ $ 370 per week, $ 370/6 ≈ $ 62 per day.

$ 20,000/12 ≈ $ 1,667 per month

$ 1,667/4.5 ≈ $ 370 per week
$ 370/6 ≈ $ 62 per day

Breaking it down, we know that add-on sales worth $ 62 per day

have to be reached. This could be divided into $ 10 per 6 customers,
or one product of that price per customer, or two worth $ 31 items
etc. This target also provides a monetary target for Visual Merchandisers
whilst planning displays and product combinations.

Another tool to measure in-store merchandising, service and store

performance, is to calculate the hit rate: the percentage of how many
store visitors actually bought something. It is easily calculated
by the number of sales divided by the number of visitors.

How to use basket size and hit rate to measure the

possible effects of Visual Merchandising in creating
more sales?

Imagine a store owner, that has a shop with a yearly turnover of

$ 200,000, hit rate is 20% and the basket size is $ 25. Furthermore,
there are 40,000 visitors and 8000 sales per year. When people are
passing the store, the rule says that 10% of passersby actually
enter your store. In this example we know that as a result 400,000

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potential customers pass by our store annually. If the store owner

decides to increase the passersby number by 1 %, and hit rate and
basket size would stay the same, the shop could increase sales by
10 %. Have a look at the calculation in figure 1.

11% passersby x 400.000 passersby

= 44.000 potential customers

20% hit rate x 44.000 10%

= 8.800 paying customers increase
in sales
$25 - basket size x 8.800
= $220.000 turnover

To reach the target of increasing the hit rate up to 20 % with 11 %

of passersby entering the store, the store owner decides to invest in
great customer service and customer experience, having great items
ready for campaigns, themes, sets and styling in order and seasonal
items at the right time at the right place. Just by increasing the hit
rate by 5%, its effect on increasing sales is 25%.

The third step is to include a raise in basket size. The right styling
of add-on sales and specific marketing strategies are helpful to
inspire the customer in-store. Creative window displays even draw
more people into the store. Increasing the basket size by e.g. $ 10
would lead to a turnover growth by 40 % compared to the original
numbers. So what if a store owner truly understands the value of
VM, great customer service and decides to increase hit rate by 5%,
basket size by $ 10 and get 1% additional passersby into your store?

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11% passersby x 400.000 passersby

= 44.000 potential customers

25% hit rate x 44.000 92,5%

= 11.000 paying customers increase
in sales
$35 - basket size x 11.000
= $385.000 turnover

In Figure 2 you can see that the result would be a 92,5% raise in
sales. Sounds promising, right?

Setting targets to increase hit rate, turning passersby in actual

customers and enhance basket size should all be accompanied by
an omni-channel customer experience, great VM and exceptional
marketing strategies. If you successfully implement all VM strategies,
you have the right items at the right times in-store and your omni-
channel marketing works out, you will be able to increase your
turnover by 92,5%!

Strategically planned seasonal add-on items in-store, a tidy store

front and well laid out window displays are hereby all factors that
VMs have to keep in mind. This way VM can significantly help to
increase turnover.

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Final words:
Future trends in VM
Some might argue that the job of Visual Merchandisers face critical
times as retail is changing every day in a rapid pace. But here lie -
what we think - very multifaceted and adventurous perspectives.
Since retail has to think of new ideas to attract customers and turn
them into loyal returners, VM’s carry the responsibility to come up
with creative strategies and are able to explore the limits of their
own imagination and cross over them.

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