1 / 27

Business Makeover Case Study : Michael Jones & Jeff Rexhausen

Business Makeover Case Study : Michael Jones & Jeff Rexhausen. The Economic Impact of Exterior LED Message Boards. Why is this topic important?. LED Message Boards are increasingly used by businesses as exterior on-premise signage. 

yul
Download Presentation

Business Makeover Case Study : Michael Jones & Jeff Rexhausen

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. Business Makeover Case Study:Michael Jones & Jeff Rexhausen The Economic Impact of Exterior LED Message Boards

  2. Why is this topic important? • LED Message Boards are increasingly used by businesses as exterior on-premise signage.  • Are these signs, which allow businesses to communicate more information at a lower cost, associated with better store performance? • This research provides new insights into the benefits of investing in LED Message Boards, based on the latest performance metrics from a major retailer.

  3. Retailer’s Previous Research • Shopper perceptions of message boards (exit surveys) • MB detracts from community attractiveness – yes:7%, no:81% • MB shows store cares about community – yes:55%, no:10% • MB should have community messages – yes:67%, no:11% • Preference for monument signs in suburban settings • Want info on convenience and household items • Want info about sale items “when I need them”

  4. Retailer’s Previous Research (cont.) • Shopper awareness • Overall, 30% of exiting shoppers read the sign Comparison LED Manual Gain • Read the sign 41% 28% +13% • Remember the message 21% 10% +11% • Demographic characteristics • More likely to be noticed by parents, blacks, frequent shoppers • Adding sales price moved 55% more of on-sale products

  5. Our Own Previous Research • Digital electronic sign cases: effective messaging • Value Place • Better branding • Better financial performance • Anderson Ford • More customers and service department revenue • More “goodwill” through community service messages

  6. Key Points of Previous Research • Shopper perceptions • Messages are appreciated • LED messages are more noticeable and memorable • Other retailer research • Sales price info increases product sales • Economics Center research • Increases in business performance • Enhanced business image

  7. What is this project? • A set of case studies of LED use by a major retailer.  • Each case study compared a store with changes to its on-premise manual message board to three other stores on the basis of market area demographics and store performance prior to the change.  • Typical case: replacement of manual board with an LED message board of the same size and location.

  8. Test Store Comparisons • Urban South stores had some variation in changes. • ID # Before After • 760 None LED • 424 Manual LED • 605 Manual LED • 854 Manual LED on shared pylon • 449 LED 87% larger LED • Midwest test stores all involved conversions from Manual to LED message boards.

  9. LED Readerboard Use

  10. What did we do? • We worked with the retailer to identify stores with new LED message boards: • South and Midwest regions • Between July 2010 and June 2012 • For each store with a message board change, we identified 3 control stores, based on: • Market characteristics (median household income, demographic peer group) • Store performance (sales, customers)

  11. Composition of Test Store Demographics • Median Household Income • Broad range of income areas • White Population • Most market areas are relatively homogeneous

  12. One Example of Store Matching • Market characteristics • Peer group covers race/ethnicity, geographic region • Some comparisons for one test store: • Store performance • Control stores averaged 6.9% larger, 6.8% more customers, and 15.9% more sales in FY 2009.

  13. Total Store Sales 1 week before sign change vs. 1 week after sign change

  14. Total Store Transactions1 week before sign change vs. 1 week after sign change

  15. Comparison of Test to Control Stores:Week After vs. Week Before Sign Change • Over 100 data points – a lot of noise • Need to simplify

  16. Comparison of Test to Control Stores:Week After vs. Week Before Sign Change • Use of control stores eliminates some significant causes of variability, but much still remains. • Focus on “difference in difference” statistics. • Difference of 2 weeks in test store compared to difference in 2 weeks of control stores • Averages from multiple cases … Sales: +2.55% Transactions: +2.60%

  17. Impacts Beyond the First Week • Investigate whether these gains can be sustained or disappear over time. • More data increases the confidence in findings. • By looking at one month instead of one week, we can begin to address these points.

  18. Total Store Sales 4 weeks before sign change vs. 4 weeks after sign change

  19. Total Store Transactions4 weeks before sign change vs. 4 weeks after sign change

  20. Comparing First Week to First Month • On average, results using four weeks of data show test stores only retained 40% of their initial gains. • What happens if we expand to compare the 52 weeks before the sign change to the 52 weeks after?

  21. Total Store Sales 1 year before sign change vs. 1 year after sign change

  22. Total Store Transactions 1 year before sign change vs. 1 year after sign change

  23. Comparison of Test to Control Stores:Year After vs. Year Before Sign Change • Most showed gains, generally larger than losses Each pair of bars represents one test store.

  24. Comparison of Test to Control Stores:Average Sales and Transactions Before and After Sign Change • Gains increased compared to first 4 weeks • Yearly figures showed larger gains for sales than for transactions

  25. Latest Research Findings • Impact of expanding the data set to 20 stores • Impact of LEDs on convenience/impulse sales • Convenience & impulse items likely to be more affected than other items that tend to be more destination-type purchases) • Comparing investment in upgrading a sign to increases in sales: expected return on investment

  26. Next Steps • Determine statistical significance of research findings • Prepare final research report • To be completed later this year • Will also be submitted to professional journal

  27. Questions?

More Related