What role does the shop window play in the retail marketing mix? In co-operation with the EHI retail Institute, Messe Frankfurt ­– the event organiser behind such fairs as Tendence, Ambiente and Heimtextil – has published a report investigate. Issued at Frankfurt’s Tendence exhibition in August, the report draws from German retailers, yet contains a number of universal findings, revealing the effectiveness of this relatively low-cost marketing tool.

Visual merchandising is an important tool in the communication mix of a retail company. The term refers to the optimisation of product presentations and the sales environment within the framework of an efficient visual sales-promotion strategy.

At the point-of-sale, this includes visual communication of the corporate identity, the presentation of products and brands in a way designed to promote sales and the company image, as well as target group-, customer- and sales-oriented product presentations and decorations. The core task of visual merchandising is to communicate with the customer on a visual plane. Therefore, the shop window is a key aspect of visual merchandising.

Despite the fact that the budgets for visual merchandising and window dressing are “one of the best-kept secrets” according to the companies polled, the study shows the high degree of importance attached to the subject by the retail trade.

At around €80m, expenditure on window dressing represents about 2% of the marketing costs of the relevant segments of the German retail trade. While department stores, etc, tend to invest more than 2% of their marketing budget in window dressing, the figure is slightly less in the case of chain stores, which focus more on in-store presentations. As a rule, smaller retailers have no fixed budget for window dressing.

Polls for the EHI Shop Fitting Monitor 2014+ reveal that service providers and suppliers from the visual-merchandising field noted a general increase in expenditure on decoration elements for visual merchandising and window dressing. According to a company from the chain-store segment, greater standardisation and the multiple use of elements has also led to an increase in efficiency within the framework of the investments made.

As a visual-merchandising tool with leverage effect, shop windows can make a great impression. Using just a fraction of the total marketing budget, they can have a powerful effect at a relatively low cost. Thus, a slight increase in window-dressing expenditure can achieve a major impact.

However, the direct link between window dressing and in-store sales is difficult to quantify due to the different factors that influence purchasing decisions. Hence, one of the companies polled reported that this used to be an area where costs were cut without further ado. Today, however, the shop window is seen as an important aspect for differentiation against the competition. 

Growing in importance
Window dressing is one of the most important marketing tools for the retail trade, and has grown continuously in significance as a channel of communication over recent years. The trend towards chain stores and the online trade form the background against which retailers must reach their customers on an emotional plane.

From the point of view of the companies polled, the functions of the shop window are clearly defined. A number of topical surveys confirm that people now walk faster in cities. Thus, it is all the more important for retailers to make customers stop and grab their attention. All companies polled said this was an important shop window function.

In response to the question of what they primarily aimed to achieve by window dressing, more than two thirds said they wanted to increase the level of customer awareness of their shop and cultivate their image. The statement – “Shop windows are more important than just sales. They are about image” – illustrates the significance of window dressing.

Spotlighting products and assortments is also very important. More than two thirds of companies polled said this was a vital window-dressing function. “The shop window is the setting for core product and brand claims,” said one of the companies. Almost two thirds of respondents also said that shop windows should generate purchasing impulses.

All in all, the results of the survey clearly show that there is a trend towards more elaborate presentations at the point-of-sale. Despite the current internet boom, one of the companies polled continues to see the retail trade in a better position for reaching customers via emotional product presentations and added: “This definitely includes the shop window, the significance of which will increase in the future”. Another said: “Shop windows have undoubtedly become more important again,” and considers that this process will continue in the future.

A smaller retail company said that it had employed someone specially for the visual merchandising segment in 2013. Beforehand, the services of external service providers were included in the visual merchandising budget. With the new appointment, the retailer concerned had increased the amount spent on visual marketing in comparison to the previous year by the personnel costs.

There is a great demand for visual marketing experts, and this reflects the increased importance of window dressing and visual marketing. In 2004, the job profile and training plan of window dressers was thoroughly modernised and enhanced.

Today, the training plan includes not only job-related IT applications but also graphic, layout, and image-processing software. New commercial subjects are intended to enable trainees to plan and calculate projects, as well as monitor the results. Nowadays, the job title is ‘visual-marketing designer’. 

A multi-faceted medium
Presentation is becoming more and more important. Under the buzzword ‘emotionalisation’, the attention of customers is drawn to a subject or story that, if possible, begins in the shop window and continues inside the shop. The ways in which visual merchandising and window dressing are organised and implemented in the retail trade differs greatly from one type of outlet to another.

Many retailers say they are prepared to invest in visual merchandising but are held back by budgetary restrictions. Only the bigger companies of those polled have independent visual merchandising departments, which are generally subordinate to the marketing department. The majority of companies prepare a marketing plan in close co-operation with the merchandising team and the marketing department.

For modern department stores, window dressing is closely bound up with their campaign themes. The subjects and activities dictate a holistic line which runs through all media, whereby particular importance is attached to the central planning and implementation of visual marketing and window-dressing concepts. The shop window is part of consistent POS marketing.

The trend towards more elaborate shop-window presentations is particularly pronounced in the case of department stores, whereby the more exclusive the product, the more extravagant the presentation. When products from the gift and home segments are on show, they are generally part of a themed presentation.

To ensure a homogenous, competitive intelligence- (CI) compliant presence in the market, the window-dressing specifications for chain stores come almost always from head office. Overall, chain stores give less emphasis to the shop window for gift and home products than department stores and specialist retailers – priority is given to in-store product presentations.

In many cases, an open shop window offers a view inside the shop. When the windows are decorated, they frequently revolve around special offer themes and have no back wall. Nevertheless, the statements given in chain store polls leave no doubt that the shop window is gaining in significance. “Shop windows are ideal for large-scale coverage. Unfortunately, all too little use is made of the opportunities opened up by good window dressing,” said one company.

The shop window is of immense significance especially for smaller retailers because it is frequently the most important medium in the marketing mix. Particularly in the case of retailers with only one shop, the shop window is an essential aspect of differentiation – especially given the spread of chain stores in city centres.

Most of the respondents in the group say they only have a very rough idea of the subjects and activities for the coming year. Window dressing is the responsibility of the proprietor, the store manager or a store employee. Nevertheless, small retailers are also moving away from straightforward product presentations. The principle here is that ‘appearance is more important than product density’. One of the smaller retailers said: “There is a trend towards more individual concepts [and], in many cases, niche concepts are trend setters.”

Almost all companies have their shop windows dressed by their own employees – visual-merchandising specialists, decorators or sales personnel. Only two of the companies polled also make use of external experts. In the case of department and chain stores, the window dressing is changed every four to six weeks, depending on campaign duration and the introduction of new subjects.

Smaller retailers take advantage of the flexibility to change the window dressing as and when the need arises. Factors influencing this are, for example, sales-promotion activities for new products, as well as seasonal aspects and external impulses, such as major events that are reflected by the window dressing. 

Messe Frankfurt, one of the world‘s leading trade show organisers, commissioned EHI Retail Institute to conduct a survey of selected businesses, and the results formed the basis of this report, entitled Shop windows as a factor for success – a study on the significance of window dressing in the retail trade.