Visual Merchandising

Survey Report

2016

Presented by:

Usha Vijayakumar Kishan Sahani Asish Pithadaiya Jatin Taneja

Presented to:

Prof Steven Litt Seneca College

2 Executive Summary

This research helps to state the thoughtful and supporting

gesture that were provided by the respondents on the four

distinct variables of visual merchandising which are

Colours, Store Lightings, Music played in the Store and

window displays.

This idea has made shops to focus upon their visual merchandising side, as it has

grown to be a pivotal element in order to run the stores.

This research also provides assistance to the retailers who are willing to expand

their familiarity on the visual merchandising theory and strategies.

Keywords: variables, store layout, design, colour, lighting, music, fixtures,

window displays, survey, observation.

3 Business Situation

Background:

Tommy Hilfiger was founded in 1985. Along with

Calvin Klein, it’s one of PVH’s two flagship brands.

In 2011, PVH Corp. (PVH) acquired Tommy Hilfiger

for approximately $3 billion. At the time, it

was the largest business combination in the

clothing and apparel industry. The acquisition was

a good fit for PVH. Both entities shared a similar

culture. It gave it a better platform to grow

internationally.

For 2014, Tommy Hilfiger’s global retail sales were $6.4 billion. PVH booked revenue of near $3.5 billion in

2014. The difference can be explained by licensee revenue of approximately $2 billion. PVH only gets to

report about 5% of the revenue on its books. Tommy Hilfiger gets 59% of its sales from North America, 28%

from Europe, 9% from Asia, and 4% from Latin America and Mexico. Its North American operations are retail

centric. Over 70% of the revenue from this region

comes from freestanding, company-operated

stores and concession shops. Tommy Hilfiger

gets 59% of its sales from North America, 28%

from Europe, 9% from Asia, and 4% from Latin

America and Mexico. Its North American

operations are retail centric. Over 70% of

the revenue from this region comes from

freestanding, company-operated stores and

concession shops.

Opportunity: Canada is only making 5% of the total revenue of the Tommy Hilfiger. Opportunity over here

is we can increase the sales of Canadian Tommy Hilfiger Stores by implementing new marketing strategies

like Visual Merchandising, when can play a pivotal role in the buying behaviour of the consumer.

1. To study about consumer buying behavior of young and fashion conscious people

2. To investigate the role of visual merchandising impact on consumer buying behavior;

Window Display

In-store Display

Promotional Display

Store Layout

Music Color and Lighting

Exterior Signs / Mannequin display

3. To study the relation between floor merchandising on consumer buying behavior,

4. To study the impact of Tommy Hilfiger brand name on young fashion conscious people’s buying

behavior and

4 Objective of the Study

5 Research Objectives

Hypothesis 1 is constructed to find out whether there is a significant

relationship between customer impulse buying behaviour and Mannequin

display.

Hypothesis 2 is designed to find out whether or not there is a significant relationship between customer’s

impulse on buying behaviour and In-store display.

Hypothesis 3 is designed to find out whether or not there is a significant relationship between customer’s

impulse on buying behaviour and promotional signage.

Hypothesis 4 is designed to find out whether or not there is a significant relationship between customer’s

impulse on buying behaviour and store layout.

Hypothesis 5 is designed to find out whether or not there is a significant relationship between customer’s

impulse on buying behaviour and interior ambience that is colour, music and lighting.

Customer Behavior

Customer Activities

Buying Using

Customer Responses

Expressive Psychological

6 Previous Studies

Visual merchandising is purely a marketing concept that helps in collaborating

the details of the products through hoardings, pamphlets, shop boards, shelf

makers, banners, posters, etc. which the customers can scrutinize during their

visit to the market. (Source: Hefer and Cant)

Behaviour of the Consumer also plays a pivotal role in the attempts of Visual Merchandising. Consumer

behaviour can be defined as “the study of individuals, groups or organizations and the processes they use to

select, secure, use and dispose of products, services, experiences, or ideas to satisfy needs and the impact

that these processes have on the consumer and society”. (Source: Cant, van Heerden, and Ngambi)

The main purpose of this research is to examine the stimulus of impulse buying due to window display,

colour, lighting and music by the customers in the store. (Source: Kardes, Cline and Cronley) Adding to this

topic, stating that consumer behaviour also includes the consumer’s expressive, psychological and social

responses that lead, establish or follow these responses as demonstrated in Figure.

7 Target Audience

As the major chunk of crowd will be youngsters, and our research will be

conducted on Tommy Hilfiger’s Visual Merchandising Strategy in Toronto,

Canada. The research will be done in the form of Survey questions, which will help us in finding the impulse

of customers on their buying behaviour.

We are targeting this segment and doing research on fashion conscious people of the group between mainly

18 to 44 years of age (male and female) who are more inclined toward in-trend shopping of big brands.

8 Methodology

This research was conducted over a 45 day period in the last quarter of 2016 by our

Research Team. The first part of this report includes secondary research and their

insights.

Survey is generated using the Q-Fi solution tool and the number of respondents were 1100.

Survey was conducted online for the people of Greater Toronto Area (GTA).

Data was gathered using the Q-Fi simulator (mock data) and the decisions were taken on the basis of the

generated data.

Survey incentives were offered in terms of 40% off coupons of Tommy Hilfiger.

Every effort is made to provide accurate information. The information provided is “best available” on the day the data

was gathered. Changes in personnel, company products and operations change daily. Previous projects indicate the

most volatile information will be found with changes in personnel and company operations reported in the Prospect

Directory.

8 Data Rules

Criteria for discarding a respondent’s survey:

Respondent who will select “Never Visited” option in Q3 (How often do

you go at Tommy Hilfiger’s store) the respondent will be redirected to

the general questions to Q5 which is intended to ask general questions

to the respondents.

Respondent who will select “No” in Q7 will be redirected to the general questions which is Q13 which

will be pictorial based question of store layout as the questions from Q8 to Q12 is for the Tommy

Hilfiger store’s questions.

Criteria for complete survey:

Respondent who will select any of the following responses from Q3 other than “Never Visited” will be

qualified for the complete survey.

Survey with the respondents answering “Yes” in Q7 will be moved to rest of the survey questions and

will be qualified for the complete survey and that data will be valuable to us.

9 Respondents Profile

Approximately 32% i.e. 400 respondents are from 18 to 34

years old and only 59 of them are married and the rest of the respondents are either single or separated.

A significant observation eliminates the gender bias in income as 142 out the 261 high income

respondents are female compared to the 119 male respondents. A higher percentage of respondents

earn less than 10000$ as income and of les than 18 years of age.

A total of 1100 respondents were surveyed for this research

project. They are of different demographics and background

charateristics. Table 1 displays the various characteristics of the

project respondents. A total of 276 respondents preffered not

to share their gender. Overall the respondents are equally

distributed as male, female and otherwise.

10 Respondent Purchase Behaviour

From the survey report it is observed that Female purchase more than men

with highest purchase frequency as weekly. The age distribution of female

has a mean of 11.6 and is centered around the female respondents

between 18 to 24 years old which is approximately 16% of the female

population. Hence there is an oppurtunity in the young women

population.

Table 2 exhibits the income distribution of the respondents with respect to age and gender.

Table 2 – Distribution of annual income with age and gender

The age distribution of male is skewed towards the right with 22% of the respondents are of higher age

than 45. Hence these respondents consists of the high annual income segment among the population.

Women have the higher distribution than men in the first and the last segment of income.

With respect to Tommy Hilfiger, the following insights are observed:

18% of the respondents have never visited Tommy Hilger store i.e. 201 out of 1100

Most female respondents who visited Tommy Hilfiger have less than $10000 income as compared to most of the male respondents who vistied Tommy Hilfiger hav between $25000-$50000 as their house hold income.

Male and Female singles visits Tommy Hilfiger more often than married men and women. Tommy’s major customers can be described as,

A single woman who has an household income less than $10000

A divorced man who has an household income of $25000 to $50000

11 Key Finding- 1

Factors Influencing Purchase Decision

Figure 1. Influential factors for purchase decision

Figure 1 highlights the below mentioned insights:

Visual merchandising factors have the highest

agreement of approximately 21% of the overall 899

respondents

Respondents are not highly price sensitive and Brand

name is the second-high influential factor

Figure 2 highlights the below mentioned insights:

Older Respondents are highly influenced by visual

merchandising compared to the young ones. Respondents of

age 25 to 44 are less influential by the visual merchandising

Based on the general and purchases at Tommy Hilfiger, the respondents were asked questions on factors which

contributes maximum to their purchase. Out of 1100(N) respondents, 899 respondents have visited Tommy Hilfiger

already and answered the questions specific to the factors influencing their purchase with respect to Tommy Hilfiger.

The results support the research objective of visual merchandising impact on the purchase behavior.

These highly influential factors

contribute to visual merchandising

and will help to the customers to have

better experience

Thes

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cto

rs c

on

trib

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to

V

isu

al M

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and

isin

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Price and discount offers are least

influential towards their purchases

Figure 2. Heat Map of the VM influence over age groups

12 Key Finding- 2

Fashion Conscious

Price sensitive

Brand Lovers Customers who

plan their purchase, likes to purchase on their own and makes in and out of the

store by themselves are considered influence able customers who are our target

markets. These customers can be influenced easily by the visual merchandizing like

store layout and arrangement of the stores etc. Approximately 18% of the highly

agree respondents are young and less than 24 years old. Mannequin displays are

influencing older respondents who are more than 45 years old at the ratio of 39

out of 150. Middle aged men and women are least influenced by the visuals and

displays.

Hence the target segment for visual merchandizing is “Influence-able Customer” who maybe:

Young women who are less than 24 years’ old

Older men who are 45 years old or more

Possible Target Segments – Visual Merchandising

Customers who follow online Fashion blogs and social media to keep in trend

with the current fashion and follows celebrity endorsements are considered to

be fashion conscious. 6.27% of respondents are fashion conscious of which

2.16% respondents are most likely to purchase a product when endorsed by a

celebrity.

A general analysis of the data suggests that the overall population is not price

sensitive. It is observed from the factors influencing purchase with Price,

discounts and promotional signs held the highest disagreement. And it is

observed that the respondents above middle are not price sensitive and are

likely to purchase the product at any cost. About 35% of the middle respondents

have strong agreements to insensitivity towards price

Brand lovers are customers who are aware of premium brands and overlaps in

characteristics with the fashion lovers in following the celebrity endorsements for

a particular brand. Out of 284 female respondents, 80 of them are highly likely to

purchase a product for its brand name and 60 out of 260 male respondents

believe brand name will influence their decision. Young respondents who are

between 18 to 24 years old tend to be more influenced by brand names and

celebrity endorsements

Influence-able

13 Key Finding- 3

A variety of questions were asked covering the possible segments and

the results are interesting. The questions varied from general purchase

beavhior to visual merchandising questions regarding store display and

layout mannequin displays etc. From the analysis of possible segments,

the following observations are obtained:

Women visits shops often than men both in generel and at Tommy Hilfiger. From weekly to yearly, women shipping frequency is higher for weeekly and mothyl purchases. With respect to Tommy Hilfiger, the observations remains the same, as women visits shops in terms of weekly and monthly.

When it comes to price, men spend significantly more than women. The price distribution with respect to gender, it is obsserved that mean purchase price of men is $60 compared to $53 of women. It is also obsrved that men are likely to buy a product at any cost than women. Interestingly Men and Women with higher income range are likely to spend less than

54% of men are highly motivated by the premium brands compared to 41% of women. In correlation with the price analysis, men are likely to spend more and purchase premium brands given that the general population behavior Is not price sensitive.

Being a shopper with little help and observing fashion sense from mannequins suggests that women shoopers can be influenced more with visual merchandizing than men. The store layout and mannequin fashion reference are high factors for women’s purchase. 16% of women belives previous purchase experience, store layout and arrangement of products are important factors for their purchase

Men are brand lovers, Women are price sensitive

14 Conclusions and Recommendations

Older men and Younger women are influenced by store layout and mannequins e

Targeting fashion conscious young people by celebrity endorsements on window displays will drive an increase in footfalls for the store

High earning men and low income women are the major customers for Tommy Hilfiger which suggests that needed shift to the rest of the target segments

Influence-able customers are the main target segment who can be highly influenced with visual merchandising concepts

APPENDIX

16 Matching Diagram

17 Matching Diagram

18 Peer Evaluation