Visual

Merchandising

Mannequins presented at GlobalShop in March 2005

2005
IndustrySurvey
by Quebec-based mannequin house RHO Inc.

A benchmark study made possible by a research grant from:

 Visual values By RoxAnna Sway, Editor in Chief and Gareth Fenley, Contributor

DDI surveys visual merchandising usage, trends and budgets

Methodology
DDI compiled this survey of our readers
to measure their use of visual merchan-
dising techniques, products and budgets.
The survey was conducted by Equation
Research (www.equationresearch.com)
for DDI with survey forms reaching 1,418
DDI readers and resulting in an 8 percent
response rate. DDI survey respondents
consist of 40 percent retail organizations
that operate 500 or more stores; 25 per-
cent are vice president/directors of visual
merchandising for retail stores; 37 percent
are visual merchandising corporate man-
agement; 9 percent are visual merchandis-
ing regional management; and 15 percent
are visual merchandising staff level.
Budgets on the rise
DDI asked our readers to disclose the
approximate visual merchandising budgets
for all existing stores in their organizations in
2005. Thirty-two percent of respondents
indicate that their organizations plan to
spend more than $2 million on visual mer-
chandising this year. Budgets between $1
million and $2 million captured 14 percent
of respondents. When all categories below $1
million are added up, 41 percent of respon-
dents planned to spend that much. The
budgets for visual merchandising in new
stores in 2005 are more modest: 18 percent
plan to spend more than $2 million, 6 per-
cent are spending between $1 million and $2
million, 37 percent are spending less than $1
million and 25 percent do not know.
Our survey shows an upward trend in
visual merchandising budgets. While only 15
percent of respondents said they had seen
budgets cut since last year, 44 percent said
the 2005 budget is higher than that of 2004.
In 35 percent of organizations, budgets
stayed about the same. This trend is expect-
ed to continue into 2006, when 10 percent of
respondents expect a smaller budget, 42 per-
cent expect having more dollars and 36 per-
cent expect about the same budget.
Christmas drives the year in retail, and
that was clear in a quarterly profile of visual
merchandising budgets, although spending
is pretty much equally distributed through-
out the year. Respondents spend 21 percent
of their budgets from January through
March, 24 percent from April through June,
27 percent from July to September and 29
percent from October to December.

Visual Merchandising budgets Implementation of V.M. programs

for stores in 2005 (Multiple answers are included where appropriate)

Under
$25,000 Existing stores By in-store
$25,000 - New stores staffs
$99,999 By roving personnel
$100,000 - from headquarters
$249,999 Left up to
$250,000 - store management
$499,999 By roving personnel
$500,000 - from regional office
$999,999 By in-store sales
$1 million - and
$2 million stock keeping staff
More than By vendors and
$2 million brand marketers
By outside
Don’t know contractor/company

Sixty percent of survey respondents have annual

V.M. budgets for existing stores of more than Most V.M. installations are
$500,000, with 32 percent having budgets of more implemented by in-store staffs
than $2 million. Thirty-two percent of respondents (47.8%) or roving personnel
have annual V.M. budgets for new stores of more from headquarters (44.2%).
than $500,000, with 18 percent having budgets of
more than $2 million.

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 Decisions and implementation
Our survey explored the range of per-
sonnel responsibilities involved in visual
merchandising today. Overwhelmingly, staff
at corporate headquarters (in 82 percent of
respondents’ organizations) control the
budgets. Likewise, design decisions are made
at the top, with 87 percent accounted for at
corporate headquarters.
Respondents were asked to indicate all
types of personnel who implement in-store
visual merchandising programs within their
organizations. The categories included in-
store visual staff (48 percent), roving person-
nel from the headquarters office (44 percent),
store management (35 percent), roving per-
sonnel from regional offices (32 percent), in-
store sales and stockroom staff (27 percent),
vendors and brand marketers (20 percent),
and outside sourcing companies (15 percent).
Purchasing intentions
Respondents detailed their plans to buy
mannequins in the next 12 months, and they
are buying more. The leading category is
headless mannequins, of which respondents
indicated they intend to purchase 20 percent
more of in the coming months. Also on the
shopping list are full abstract mannequins
(12 percent will buy more), child man-
nequins (10 percent will buy more), full real-
istic mannequins (10 percent will buy more),
teen mannequins (8 percent will buy more),
full-figured mannequins (8 percent will buy
more), ethnic mannequins (6 percent will
buy more), petite mannequins (5 percent will

Comparison of Comparison of anticipated

2005 V.M. budget with 2004 2006 V.M. budget with 2005
Months in
which retailers
will open the
More than More than most new
2004 2005 stores in 2005:
About the same About the same 1 June
as 2004 as 2005
2 March
Less than Less than 3 August
2004 2005 4 April
Don’t know/ Don’t know/ 5 October
aren’t sure aren’t sure 6 July
7 May
8 September
Visual merchandising budgets appear to be healthy, with 44 percent of respondents reporting that their
2005 budgets were increased over 2004, and 42 percent expecting an increase for 2006.

Annual Christmas Holiday Percent of annual V.M. budget spent

V.M. budget for each holiday
(Of the 70 percent of respondents who say
they use seasonal display programs)
Under $10,000
$10,000 - $24,999 Christmas
$25,000 - $49,999 Back to School
$50,000 - $99,999 Other
Mother’s Day
$100,000 - $249,999
Valentine’s Day
$250,000 - $499,999 Easter
$500,000 - $999,999 Father’s Day
$1 million - $2 million Thanksgiving
More than $2 million Fourth of July
Don’t know/aren’t sure Memorial Day
Labor Day
Hanukkah
Of survey respondents, 13 percent have V.M. Christmas
budgets of $1 million or more. As expected, Christmas accounts for the largest expenditure of
V.M. budgets that are committed to seasonal trim. The top five
seasonal expenditures are: 1) Christmas, 2) Back to School, 3)
Mother’s Day, 4) Valentine’s Day, 5) Easter.

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 buy more), and pet mannequins (3 percent
will buy more).
Signage and graphics continue to gain
ground in the industry. In the next 12 months,
43 percent of respondents plan to buy more
promotional/POP signing. Thirty-five percent
will buy more large format photo blowups, 30
percent will buy more price point signing, 27
percent will buy more standard size photo
blowups, 23 percent will buy more banners,
and 19 percent will buy more light boxes.
Audio and visual technology have become
mainstream. More audio equipment is on the
list for 21 percent of respondents in the next 12
months. Twenty percent will buy more
kiosks/interactive displays, 19 percent will buy
more LCD screens, 18 percent will buy more
plasma screens, 13 percent will buy more digital
signage, 8 percent will buy more TV monitors.
Finally, 38 percent of respondents will
buy more decoratives and props in the next 12
months, 34 percent will buy more seasonal
trim, 32 percent will buy more customer seat-
ing/in-store furniture, and 31 percent will buy
more promotional POP displays such as
countertop and in-department displays.
Shopping all year long
DDI asked our respondents about their
purchasing habits throughout the calendar
year. The resulting profiles for different
visual merchandising categories showed
that buying patterns are unevenly distrib-
uted. For mannequins and forms, buying
peaks in April.
Signage and graphics, however, showed
a different buying pattern. Purchases were
skewed toward later in the year, between
May and October.
Christmas holiday trim is also mostly
purchased between May and October, with
the high point in July.
The biggest months for buying decora-
tives and props are April and July.
Final facts
Visual merchandising and display props
in the stores of DDI readers are coming
mostly from U.S. resources. While 71 per-
cent of products are American, the remain-
der (29 percent) are from overseas resources
and direct imports.
Seasonal display programs are popular
today. Seventy percent of respondents are
using them. Christmas takes the lion’s share
of the budget, fully 42 percent of annual sea-
sonal budget dollars. Back to school gets 13
percent of the seasonal budget, and all other
individual holidays specified by DDI
account for 6 percent each or less.

Percent of annual V.M. budget Percent of annual V.M. concepts

controlled by each organizational level designed at each organizational level

Corporate As respondents indicate,

Corporate Headquarters
Headquarters the vast majority of both
Divisional design and expenditure
Divisional decisions are made at
Contractor/ the corporate
Regional Freelancers headquarters of retail
organizations: 82
Store level Regional percent of budget
decisions and 87
Store level percent of design
decisions.

Planned new store openings in 2005 Annual V.M. budget spent

in each quarter of the year
Retailers opening more Jan. – March
that 200 new stores
April – June
Retailers opening July – Sept.
51 to 199 new stores
Oct. – Dec.
Retailers opening
1 to 50 new stores

New store openings continue According to the survey, V.M.

at a healthy pace, with 51 buying is a year-round
percent of survey respondents endeavor that does not vary
opening more than 200 new dramatically by season of the
units in 2005. year, allowing for a slight
increase in the second half.

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 Purchasing plans for V.M. selected categories
in the next 12 months DDI asked respondents with
Christmas display programs to estimate
Buy more their approximate annual budgets for visu-
Mannequins al merchandising programs associated with
(full realistic) Buy the same
that holiday, including all in-store promo-
Buy less
tions. Respondents gave a wide range of
Mannequins Do not use figures ranging from under $10,000 (8 per-
(full abstract) cent) to more than $2 million (7 percent).
Sixty-five percent of all budgets reported
Mannequins Watch for stores to were under $1 million.
(headless) Our survey shows a flourishing and
perk up and get
pretty! Thirty-eight diverse use of visual merchandising in retail
Decoratives percent of survey today. The trend to strength in this category
and Props inspires confidence in the industry.
respondents plan to
buy more
Seasonal decoratives and A free PDF version of the report is avail-
Trim able at www.ddimagazine.com. The Web
props in the coming
months, and 32 version includes additional information.
POP percent plan to buy
displays
more seasonal trim.

Custom seating/
Survey respondents told
in-store furniture DDI what they saw as the
top trends in V.M.
■ Color and lots of it
■ Return to realistic mannequins
Purchasing plans for signing and graphics ■ Return to propping
categories in the next 12 months ■ Clean lines, less clutter
■ Electronic technology:interactive,digital
Signing & Buy more ■ Sustainability
Graphics Buy the same
(all types) ■ Return to drama and theater
Buy less ■ Customer-centric store environments
Light Do not use
boxes ■ Less is more; simplicity
■ More theme-oriented promotions
Signing and graphics
Photo blow
up graphics continues to be important
to visual merchandising.
Large Forty-three percent of
format respondents plan to buy Seasonal purchasing patterns
graphics more signing and Months in which retailers buy
graphics in the next 12 the most mannequins:
POP months, with 43 percent 1 April
signing/ planning to buy more 2 May
graphics
POP signing. Thirty-seven 3 January
percent are planning to 4 February
Price point
signing buy more large format
Months in which retailers purchase
graphics, and 27 percent the most Christmas trim:
are planning to buy more 1 July
Banners photo blow-ups. Price 2 May, June and September (tie)
point signing was also 3 August
indicated for increased 4 October
usage by 30 percent of
respondents.

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 Purchasing plans for technology equipment
in the next 12 months

Buy more
Audio equipment
Buy the same
Buy less
Plasma Screens Do not use

LCD screens In the technology arena, the

leading categories in which
survey respondents plan to
TV monitors increase their buying the
most are: Audio equipment
(21 percent) and Kiosks/
Digital Signing Interactive (20 percent).
Close to 20 percent of
respondents plan to buy
more LCD and Plasma
Kiosks/Interactive
screens.

Survey respondents told

Seasonal purchasing patterns
Months in which retailers buy the
most signing and graphics:
1 October
2 May
3 January and June (tie)
4 September
DDI what they saw as the
biggest challenges for V.M.
■ Rising costs of materials
■ Shakeout from the merger/
consolidation of major retailers;
lots of displaced talent
■ Staffing—attracting creative talent
Months in which retailers purchase
the most props and decoratives: ■ Developing meaningful content for
1 April the digital medium
2 July ■ Evaluating the viability of technology
3 May ■ Budgets, especially for technology
4 June ■ Properly trained personnel
■ Lack of available talent
■ Price wars via signs
■ Being creative within budget confines
■ Narrowing field of vendors

Source for purchases of all

V.M. equipment/supplies
for the past 12 months
U.S. resources
While most U.S. retailers purchase V.M. Overseas/direct
imports
equipment from U.S. manufacturers and
companies, 29 percent purchase offshore.

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