Sri Lankan Fashion Retailing Dissertation

Sri Lankan Fashion Retailing: Using effective Visual Merchandising to improve consumer purchase intention [D.G Kushan Ravindu Lakshitha] Submitted to the Business School in partial fulfillment for the degree of Bachelor of Arts (Hons) in International Business Management Supervised By: [Dr. Prasad Neelawala] February 2016, Colombo CB004987 DISSERTATION APPROVAL I certify that I have read this dissertation and that in my opinion it is fully adequate in scope and quality as a final research project for the degree of Bachelor of Arts in [International Business Management] ………………………..…………….. [Dr. Prasad Neelawala] Supervisor I certify that this dissertation satisfies the requirements as a research project for the degree of Bachelor of Arts in [International Business Management] ………………………..…………….. [Mr. S. Kaluarachchi] Assessor Approval of the Dissertation Manager ………………………..…………….. [Dr. Prasad Neelawala] Dissertation Manager II CB004987 ABSTRACT Visual merchandising is one of the major marketing tools in fashion retailing industry. Since it is a customer based industry, attractiveness and ability to influence customers to purchase a product by communicating to their mindset is crucial. Thus, usage of effective visual merchandising elements to build an eye-catching store atmosphere will be a key competitive advantage for fashion retailers to improve consumer purchasing intention, while enhancing its sales performance. Therefore, the main purpose of this research is to evaluate the impact of effective visual merchandising on consumer purchasing intention, in order to increase the sales performance in Sri Lankan Fashion Retailing. The literature is silent on strategic retail perspective of visual merchandising because this aspect is very little elaborated in academic studies. Most researches have failed to examine the impact of effective visual merchandising on improving consumer purchase intention towards organization’s sales performance. Moreover, effective visual merchandising is a significant area of study in terms of Sri Lankan perspective because most of the Sri Lankan fashion retailers considered visual merchandising as a cost rather than an effective marketing tool and further they are willing to use short term profit oriented marketing tools since they are more of profit concerned rather than developing strategies which helps them to gain profits in the long run. This study is based on a triangulation approach and an empirical survey will be conducted to both male and female consumers aged between 18-50 using a questionnaire. The research will be only limited to Colombo city limits (Colombo 01-10) since most of the modern fashion retail outlets are located in Colombo region and it is the most urbanized region which has 242, 105 population with higher purchasing power when compared with the other regions. The analyzed data has reflected that window display and store atmosphere have a greater impact on improving consumer purchase intention while situational factors such as time pressure, human crowding and economic situation restrict the actual transaction. Therefore, this research concludes that there is a strong relationship between effective visual merchandising and III CB004987 consumer purchase intention towards organization’s sales performance in the context of Sri Lankan fashion retailing. Key words: Visual Merchandising, Purchase intention, Sales performance, Impulse purchasing IV CB004987 Table of Contents List of Tables ................................................................................................................................................................VI List of figures ..............................................................................................................................................................VII List of Abbreviations ....................................................................................................................................................IX Acknowledgement .........................................................................................................................................................X 1.0 Introduction ...............................................................................................................................................................I 1.1 Background to the study ........................................................................................................................................I 1.2 Problem statement .................................................................................................................................................I 1.3 Problem justification ............................................................................................................................................II 1.4 Objectives of the study .........................................................................................................................................II 1.5 Significance of the study ....................................................................................................................................III 1.6 Scope of the study ...............................................................................................................................................III 1.7 Chapter summary................................................................................................................................................IV 2.0 Literature Review ....................................................................................................................................................V 2.1 Effective visual merchandising in fashion retailing ...........................................................................................VI 2.1.1 Window display ........................................................................................................................................VIII 2.1.2 Store atmosphere.......................................................................................................................................VIII 2.1.3 Store layout ..................................................................................................................................................IX 2.2 Visual merchandising and consumer purchase intention ....................................................................................IX 2.2.1 S-O-R Model.................................................................................................................................................X 2.4 Effective visual merchandising and organization’ sales performance ................................................................XI 2.4.1 Time Pressure .............................................................................................................................................XII 2.4.2 Perceived crowding ....................................................................................................................................XII 2.4.3 Economic Situation ....................................................................................................................................XII 2.5 Chapter summary .............................................................................................................................................XIII 3.0 Research Methodology ........................................................................................................................................XIV 3.1 Research philosophy & strategy ......................................................................................................................XIV 3.2 Conceptual framework ....................................................................................................................................XIV (Refer to Appendix A) .............................................................................................................................................XV 3.3 Hypotheses ........................................................................................................................................................XV 3.4 Population and sample .....................................................................................................................................XVI 3.5 Survey instruments .........................................................................................................................................XVII 3.6 Data collection................................................................................................................................................XVII 3.7 Statistical method ...........................................................................................................................................XVII 3.8 Chapter summary ..........................................................................................................................................XVIII 4.0 Data Analysis ....................................................................................................................................................XVIII 4.1 Reliability test ...............................................................................................................................................XVIII V CB004987 4.2 Sample characteristics ...................................................................................................................................XVIII 4.3 Visual merchandising and consumer purchase intention ...............................................................................XXII 4.3.1 Consumer purchase intention (Dependent variable) ..............................................................................XXIII 4.3.2 Window display (Independent variable 1) ..............................................................................................XXV 4.3.3 Store atmosphere (Independent variable 2) ..........................................................................................XXVII 4.3.4 Store layout (Independent variable 3)....................................................................................................XXIX 4.3.5 Inference testing.....................................................................................................................................XXXI 4.4 Visual merchandising and organization’s sales performance ......................................................................XXXII 4.4.1 Reliability test .....................................................................................................................................XXXIII 4.4.2 Organization’s sales performance (Dependent variable) ....................................................................XXXIII 4.4.3 Time pressure (Mediating variable 1) ..................................................................................................XXXV 4.4.4 Human crowding (Mediating variable 2) ..........................................................................................XXXVII 4.4.5 Economic situation (Mediating variable 3) ........................................................................................XXXIX 4.4.6 Inference testing ........................................................................................................................................XLI 4.5 Chapter summary ............................................................................................................................................XLII 5.0 Discussion of Findings ......................................................................................................................................XLIII 5.1 Effective visual merchandising and consumer purchase intention................................................................XLIII 5.2 Effective visual merchandising and organizations sales performance ..........................................................XLVI 5.3 Strengths and weaknesses ...........................................................................................................................XLVIII 5.4 Limitations of the study ................................................................................................................................XLIX 5.5 Areas for future research ...............................................................................................................................XLIX 5.6 Chapter Summary..........................................................................................................................................XLIX 6.0 Conclusion ................................................................................................................................................................L References .....................................................................................................................................................................LI APPENDICES .............................................................................................................................................................LV Appendix A ..............................................................................................................................................................LV Appendix B.............................................................................................................................................................LVI Appendix C ...........................................................................................................................................................LVII Ethics Approval Form ............................................................................................................................................LXVII List of Tables Table 1 - Main objectives of the research ........................................................................................2 Table 2 - Golden rules of visual merchandising ..............................................................................6 Table 3- Developed hypotheses .....................................................................................................14 Table 4 - Reliability test ................................................................................................................16 VI CB004987 Table 5 - Age Category .................................................................................................................16 Table 6 – Gender............................................................................................................................17 Table 7 - Location .........................................................................................................................17 Table 8 - Monthly Income ............................................................................................................18 Table 9 - Purchasing frequency .....................................................................................................18 Table 10 - Model Summary ...........................................................................................................19 Table 11 - Average response of consumer purchase intention .......................................................19 Table 12 - Average response of Window display ..........................................................................21 Table 13 - Average response of Store atmosphere ........................................................................22 Table 14 - Average response of Store layout ................................................................................23 Table 15 - Inference testing for consumer purchase intention ......................................................25 Table 16 - Model summary 2 ........................................................................................................26 Table 17 - Reliability test 2............................................................................................................26 Table 18 - Average response of Sales performance .......................................................................27 Table 19 - Average response of Time pressure ..............................................................................28 Table 20 - Average response of human crowding ..........................................................................30 Table 21 - Average response of economic situation ......................................................................31 Table 22 - Inference testing for sales performance........................................................................32 Table 23 - Significance of visual merchandising elements ...........................................................34 Table 24 - Prior research findings..................................................................................................35 Table 25 - Significance of Situational factors ...............................................................................37 Table 26- Sample Size ...................................................................................................................45 List of figures Figure 1 - Elements of Visual merchandising .................................................................................7 VII CB004987 Figure 2 - S-O-R Model.................................................................................................................10 Figure 3 - Conceptual framework ..................................................................................................13 Figure 4 - Age group of respondents .............................................................................................16 Figure 5 - Gender ...........................................................................................................................17 Figure 6 - Location ........................................................................................................................17 Figure 7 - Monthly Income............................................................................................................18 Figure 8 - Purchasing frequency ....................................................................................................18 Figure 9 - Average response of consumer purchase intention .......................................................20 Figure 10 - Average response of Window display .........................................................................21 Figure 11 - Average response of Store atmosphere .......................................................................23 Figure 12 - Average response of Store layout................................................................................24 Figure 13 - Average response of Sales performance .....................................................................27 Figure 14 - Average response of Time pressure ............................................................................29 Figure 15 - Average response of human crowding ........................................................................30 Figure 16 - Average response of economic situation .....................................................................32 VIII CB004987 List of Abbreviations VM – Visual Merchandising DOCS - Department of Census and Statistics GDP – Gross Domestic Product IX CB004987 Acknowledgement I would like to take this opportunity to express my gratitude to Dr. Prasad Neelawala, my supervisor, for his continuous support, guidance, and encouragement which make possible the completion of the investigation. I also like to take this opportunity to thank Managers and consumers, who devoted much time to responding to my questionnaires. Further I would thank my parents for helping me out financially and morally to plan my career for the future ahead and for all the support given for me thus far. Special thanks to all individuals, whose names are not mentioned, but have given their best of support to make this dissertation as possible. Thank you. X CB004987 1.0 Introduction 1.1 Background to the study To successfully gain attention at the point of purchase, retailers need to understand what captures customers’ attention (Huddleston et al., 2015). Empirical studies have demonstrated the dominance of product display features among all other atmospheric cues in a store because display features act as silent salespeople who attract consumers in to the store and motivate them to touch, evaluate and purchase products. The importance of product displays to retailing was recognized in early 1869, which later evolved into the popular concept of Visual Merchandising (VMSD, 2012). Pegler (2012) has defined Visual Merchandising (VM) as the process of showing merchandise and concepts at their very best, with end purpose of making a sale by producing mental images that urge potential customers to make purchases. Thus, understanding the power of effective merchandise display elements has on enticing customers is of importance because it leads to a better shopping experience for consumers whilst enhancing retailer sales. Therefore, the role of effective VM has a strong impact in fashion retailing because visual cues serve as one of the primary influences on a consumer’s decision whether or not to enter a retail premises and purchasing and consumption decisions (Wu et al., 2013). Fashion retailing sector can be considered as one of the multi-billion dollar industries in Sri Lanka which has contributed nearly 6% to the Sri Lankan GDP in 2014 (LMD Corporate Website, 2015). Moreover, it is estimated that local fashion retailers are earning over 10 million US dollars annually (Dias, 2011). As stated by Dias (2011), “in witnessing the growth of Sri Lankan fashion industry, the retail market is likely to grow by 50% of the number of pieces made or displayed and sold”. Therefore, it is vital to work towards improving the performance of Sri Lankan Fashion retailing sector. Thus, the main purpose of this research is to provide an insight in to the effective VM and its impact on consumer purchase and organization’s sales performance. 1.2 Problem statement “To evaluate the impact of effective visual merchandising on consumer purchasing intention, in order to increase the sales performance in Sri-Lankan Fashion Retailing.” I CB004987 1.3 Problem justification VM enhances the attractiveness of a store and its perceived image from the viewpoint of customers because effective displays and other marketing point-of-purchase materials present an opportunity to capture consumer attention and their purchasing intentions. Bailey and Baker (2014) pointed out the fact that VM is often an underestimated and overlooked area by many retailers, yet it is a vital part of the fashion retailing sector. This is further supported by Clement et al. (2013) who recognized that the attention capturing power of in-store visual design cues has been overlooked. However, in Sri Lanka, utilization of the concept of effective VM is relatively low and can be considered as a neglected area when compared with western countries. According to Rathnayake (2015), Sri Lankan fashion retailers are more profit oriented and concerned about marketing campaigns which assist to earn profit in short term and tended to put more attention on bringing the cost down, rather than investing money on VM to build the attractive shopping atmosphere for customers which helps company to earn profit in the long run. Recently, Clement et al. (2013) agreed that “the effects of visual cues on in-store decision making are not thoroughly explored in marketing research”. Therefore, evaluate the usage of effective VM elements and its impact on consumer purchase intention and organization’s sales performance can be considered as a significant area of study for Sri-Lankan fashion retailers since 68% of customer purchasing decisions are unplanned (Stahlberg and Maila, 2010). 1.4 Objectives of the study Table 1 - Main objectives of the research 01 02 03 To identify the modern effective visual merchandising trends in fashion retailing. To establish the relationship between effective visual merchandising and consumer purchasing intention in fashion retailing. To identify the importance of effective visual merchandising and its impact on organization’s sales performance in fashion retailing. II CB004987 1.5 Significance of the study This research will be a significant endeavor for Fashion retailers in Sri Lanka to have a better understanding about the effective VM and its impact on the consumers purchasing intentions, which will assist retailers to build effective VM strategies. There are more than 30 modern fashion retail outlets are located within the Colombo city limits (Colombo01-10). Therefore, this study will be valuable for those fashion retailers to gain a competitive edge in the market by using effective Visual merchandising strategies to seek consumers’ attention. Furthermore, this study will be beneficial for Fashion Store Designers to identify the effective new trends in visual merchandising which are defined as silent salespeople to attract consumers, and utilize those trends to maximize the organization’s sales performance in order to gain a competitive advantage. Moreover, this research will include information about interior designing aspect towards visual merchandising of the modern fashion retailing outlets which will definitely assist designers to gain broad knowledge about interior designing of Sri Lankan fashion outlets. 1.6 Scope of the study The research is conducted to provide an insight into the impact of effective visual merchandising on consumer purchasing intention and organization’s sales performance in Sri Lankan fashion retailing. The scope of this research has been based on Colombo City limits (Colombo 01Colombo 10) because most of the modern fashion outlets are located within the Colombo region and further Colombo, as the commercial capital of the country, has tremendous retail potential and it is expected to witness fashion retail development in terms of both malls and high streets (LaSalle, 2013). Moreover, majority of the Sri Lankan population is available in Colombo region which is 2.58 million who has the high purchasing power and also because of the growing middle-class population (Department of Census and Statistics, 2014). Furthermore, Median household income of Colombo region is Rs.50, 071 and average monthly expenditure of per person in clothing, textile and footwear category is Rs.1, 495, which are higher when compared with other regions (Department of Census and Statistics, 2014). The period of the study is only 15 weeks which is started on first week of November. III CB004987 1.7 Chapter summary The concept of effective visual merchandising can be identified as a major influencing aspect towards consumers purchasing decisions in fashion retailing sector to boost organizations’ sales performance. Therefore, identifying the new trends of Visual Merchandising will assist for organizations to gain competitive advantage in the market through establishing consumer attractive environment with effective visual cues in the outlet. The next chapter will provide a broad view of literature related to the concept of effective visual merchandising and its impact on consumer purchasing intentions to increase sales performance of an organization. IV CB004987 2.0 Literature Review In fashion retailing practice, Visual Merchandising (VM) has come to describe not simply the means by which information about the product is communicated but how the message is received by the customer in a way that stimulates their senses and motivates them to buy (Iarocci, 2013). The term “Visual Merchandising” can be defined as the activity or process of presenting and displaying merchandise combining the effective design of environments and spaces (Wu, Kim and Koo, 2015). Effective visual merchandising strategies can be identified as the key success for the fashion retailers to attract consumers and increase their purchase intentions by capturing their attention and creating positive image in their mind set in order to increase sales performance because a positive mood serves as a contextual cue for evaluating the perceived quality, image of a product and store, and purchase intention (Law, Wong and Yip, 2012). However, this is an understudied area in academic research which resulted in a lack of scientific knowledge in this field (Wu, Kim and Koo, 2015). Researchers have confirmed that increased visual attention will increase the likelihood of choice and purchase intention of the consumer (Armel and Rangel, 2008). Therefore, this study focuses on purchase intention rather than behavior, because intention has wider implications and will often have a positive impact on an individual’s actions (Schlosser et al., 2006). Purchase Intention of a customer can be identified as one of the components of consumer cognitive behavior on how an individual intends to buy a specific brand or product (Joo-Park et al., 2006). Basically, it is about the reasonable unplanned behavior of a consumer who willing or decides to buy a specified product in a quick time. In the fashion retailing sector, the purchase intention of a consumer is also known as fashion oriented impulse buying behavior. However, consumer purchase intention has a direct impact on organizations sales performance in both short term and long term aspect because the company will only be able to increase its sales performance if they will able to capture the consumer purchase intention. According to Daft (2000), organization’s V CB004987 sales performance can be defined as the organization’s ability to attain its goals by using resources in an efficient and effective manner. Moreover, financial profitability is identified as the most common measure of sales performance in organizations by evaluating profit margin, return on assets, return on equity, and return on sales (Abu-Jarad et al., 2010). Therefore, in terms of academic focus, this research assists to understand the rationale of the impact of effective visual merchandising elements on consumers’ purchasing intention towards organizations’ sales performance. 2.1 Effective visual merchandising in fashion retailing Bailey and Baker (2014) has defined the term of effective Visual Merchandising as the selling the product or brand to the customer by creating a connection with the audience triggers an emotive response which will encourage customers to buy in that product. This is further supported by Zhu (2009), who defined Visual merchandising as the visual presentation created to communicate a store's fashion, value, and quality message to prospective customers in the fashion retailing sector. Thus, the general definition of Visual merchandising can be identified as everything that customer sees both exterior and interior which creates a positive image of the business and results in attention, interest, desire and action on the part of the customers (Mehta and Chugan, 2014). There are several key golden rules of Visual Merchandising. VI CB004987 Table 2 - Golden rules of visual merchandising [Source; (Jackson and Shaw, 2009)] Rule Simplicity Clear labeling of information Description To avoid sensory overload for the customers To provide clear explanations for the customers Logical positioning To ensure that the product is seen by customer (POS and in Windows) Clear garment and To help the customer to understand how to wear or use the product most color coordination effectively Logical adjacency Innovation To relate displays geographically to the correct area of the store To display the merchandise in an exciting, innovative and/or unique way to grab customer attention. However, most fashion retailers have considered VM as a cost rather than a major marketing tool since it is a long term result-oriented activity (Jackson and Shaw, 2009). This is further supported by the research done by Nordfalt (2010), who found that fashion retailers are more concerned about the short-term marketing tools since they are cost effective rather than moving to high investments which provides results in the long run. Therefore, the investment aspect regarding VM is relatively low among fashion retailers which in turn affect the business’s ability to encourage customers to try on and hopefully to purchase a garment. In the fashion retailing sector, the store exterior and interior are the two major areas covered in Visual Merchandising and a variety of components (color combination, product placement, lighting arrangement, layout and highlight design, mannequin and props selection, fixtures and fittings selection) are involved in creating a favorable shopping atmosphere (Zhu, 2009). VII CB004987 Figure 1 - Elements of Visual merchandising [Source: (Bakarne, 2008)] 2.1.1 Window display Window display can be identified as an important criterion of visual merchandising as it created first impression of the store on them (Mehta and Chugan, 2013). As stated by Bakarne (2008), it attracts the customers inside the store. This s further validated by Sen et al (2002), who discovered that window displays create awareness of merchandise type at the point of store entry and influence purchase decision of the consumer. Moreover, a study by Cornelius, Natter, and Faure in 2010 showed that innovative displays achieved better image valuations, and the store’s image is enhanced by the presence store front displays. Hence, window displays act a crucial role in attracting consumers to the store while improving their purchase intention. 2.1.2 Store atmosphere Kotler (2001) defines Store atmosphere as the designing of a buying environment in which specific buying emotions are created through the use of the senses (sight, sound, scent and touch) in order to enhance the consumer’s likelihood of purchasing. This is further supported by Levy et al. (2012) who described store atmosphere as the design of a store environment by making use of VIII CB004987 the five human senses. Store atmospheric cues such as effective lighting, sounding, fragrance and air conditioning features has the ability to influence consumers’ shopping satisfaction and purchasing decision since those features provide comfortable shopping experience for consumers (Berman & Evans, 2010). 2.1.3 Store layout Store layout influences the space at which consumers walk through a store (Mehta and Chugan, 2013). Customers can navigate their way through a store with ease with a well-designed store layout. A good (well-organized and spacious) store layout encourages customers to spend more time and make purchases that they would not have usually made (Levy & Weitz, 2012). 2.2 Visual merchandising and consumer purchase intention In fashion retailing sector, fashion-oriented impulse buying behavior refers to a person’s awareness or perception of fashion ability attributed to an innovative design or style (Joo Park, Young Kim and Cardona Forney, 2006). This is basically referred as the consumer purchase intention because fashion-oriented impulse buying occurs when consumers see a new fashion product and buy it because they are motivated by the suggestion to buy new products (Joo Park, Young Kim and Cardona Forney, 2006). This is further supported by Mehta and Chugan (2014) who defined impulse purchase as an unplanned action that results from a specific motivation which improve the consumer purchase intention. Therefore, understanding how the product display affects consumer purchase intention is useful because visual merchandising elements may affect consumers’ evaluation of the store, as well as other key decisions concerning purchase. Babin et al. (2003) demonstrated the fact that the combination of colors and lighting plays a critical role in influencing the purchase intention of consumers and store patronage because effective visual merchandising elements assist to capture the consumers’ attention. This is further supported by Nőrdfalt (2011), who found that special display elements are assumed to be a powerful tool to capture the customers’ purchase intention, but this aspect is very little elaborated on in academic studies. IX CB004987 However, Delgado-Ballester and Munuera-Aleman (2005) argued that the trust associated from past experience and loyalty of the customers becomes the major part for current purchase intentions of consumers rather than the attraction of the store atmosphere and VM elements which seek consumer attention. This is further supported by Bulbul and Menon (2010), who stated that effective emotional advertisements are expected to build long-term consumer relationships and loyalty which can result in higher purchase intention. As a result, identifying the factors influencing the consumer purchase intention can be considered as a problematic area of study because different authors have proposed different opinions. However, when consider about the consumer purchasing decisions, 68% of consumer purchasing decisions are unplanned (Stahlberg and Maila, 2010). Therefore, VM elements have a strong impact on improving consumer purchase intention, which is further validated by Huddleston et al. (2015), who found that attention-capturing power of merchandise display elements has practical significance and it leads to a better shopping experience for consumers. 2.2.1 S-O-R Model Mehrabian and Russell (1974) developed the Stimulus-Organism-Response (S-O-R) model in environmental psychology which is used to examine the effects of physical stimuli on human emotions and response behaviors. The S-O-R model holds that characteristics of a store environment (Visual merchandising elements) affect consumers’ internal states (Pleasure, arousal), which in turn affect their behavior such as purchase intention, satisfaction in that environment (Ha et al. 2007). Researchers have found that affective states experienced while shopping in fashion retail stores influence customers satisfaction and purchase intention (Machleit and Mantel, 2001). This is further supported by Eroglu et al. (2001), who found that images of the merchandise, music, icons, color, background patterns, layout, and fonts have a strong impact on consumer purchase intention. Therefore, this study focuses “stimulus” as visual merchandising elements of the store (Store atmospheric cues), “organism” as positive emotions, and “response” as the purchase intention of consumers. X CB004987 Figure 2 - S-O-R Model [Source: (Mehrabian and Russell. 1974)] 2.4 Effective visual merchandising and organization’ sales performance In fashion marketing communications, one of the most important tools is the retail environment because it can influence consumer moods, perceptions, attitudes, and images, and perhaps lead to the activation of purchase intentions (Easey, 2009). Visual merchandising can also consider as a silent marketing tool which presents products in the best way possible to catch consumer’s attention and hopefully to encourage awareness and ultimately a transaction by providing eyecatching shopping atmosphere in retail environment (Jackson and Shaw, 2008). This is further supported by Huddleston et al. (2015), who have explained the practical significance of attention capturing power of effective visual merchandising elements towards enhanced sales for retailers. Moreover, Nőrdfalt (2011) identified the fact that “Displays” have the capacity to increase sales because in his research, he found that disorganized displays, which signal cheaper merchandise, can increase sales by over 900 per cent. However, Graa and Dani-Elkebir (2012) have identified three situational factors which influence impulse purchasing behavior of consumers; economic situation, perceived crowding and time pressure which further have a direct impact on organization’s sales performance. Therefore, the impact of effective Visual merchandising elements on organization’s sales performance can be XI CB004987 either short term or long term due to the situational factors influencing consumer impulse purchase behavior. 2.4.1 Time Pressure Graa and Dani-Elkebir (2012) define the time pressure that is the opposite of the available time for a shopper to do the act of purchase. According to Pride and Ferrell (2014), a customer under severe time constraints is likely to either make a quick purchase decision or delay decision. Thus, the time pressure has a direct impact on consumer purchasing decision because it reduces the possibility of occurrence of a transaction while consumers having the purchase intention and willingness to buy. 2.4.2 Perceived crowding Retail crowding plays a major role in shaping consumer behavior, emotions, and value of the buying process. It also has a significant influence on the amount of time spent in the store, browsing behavior and consumers’ satisfaction (Byun and Mann, 2011). Machleit et al. (2005) identified two dimensions of perceived crowding: spatial crowding and human crowding. This research is only focusing on human crowding aspect which concerns the number of other people and the extent of social interaction among them in a store (Kazakevičiūtė and Banytė, 2012). This is further supported Machleit et al. (2010), who defined human crowding as the number of individuals as well as the rate and extent of social interaction among people in a given environmental setting which affects consumers’ purchase decisions. Therefore, perceived crowding is supposed to act negatively as well on the realization of an impulsive purchase as well as on the emotional states of the shopper. 2.4.3 Economic Situation Chaniotakis et al. (2010) stated that ‘the way of thinking’ influence consumers’ purchase intention as well as perceived of economic situation. According to Conroy (2010), consumers would try to save more money by purchasing low price products during economic downturn and once the condition turn to be better; they will shift back to their familiar brands. Therefore, economic situation can be identified as a restriction on actual purchasing decision. XII CB004987 2.5 Chapter summary Visual merchandising is a powerful marketing tool as an external motivator in the consumer’s purchasing intention. Effective visual merchandising elements can be identified as the factors to improve consumer purchase intention, but the actual purchase transaction depends according to the situational factors influencing consumer impulse purchase behavior. Therefore the impact on effective visual merchandising on organization’s sales performance can be occurred either in a short term period or long term period. Most of the past literature fails to directly identify the potential of Visual merchandising to influence consumer purchase intention in a detailed manner towards organization’s sales performance in fashion retailing sector. In order to address this vacancy and update this literature for the growing importance of effective Visual Merchandising, the next chapter will be specifically examined the Sri Lankan fashion retailing sector to identify the impact of effective Visual merchandising on consumer purchase intention towards organization’s sales performance. XIII CB004987 3.0 Research Methodology This study aims to examine the impact of effective visual merchandising elements on consumer purchase intention and sales performance of the organization. 3.1 Research philosophy & strategy The research is based on deductive approach to provide an explanatory descriptive type of study on effective VM and its impact on improving consumer purchase intention and organization’s sales performance. Thus, the study is based on triangulation research method using an empirical survey to collect the data from sample group to clarify the problem statement. A quantitativeapproach is conducted to test the relationship between effective VM elements and consumer purchase intention towards organization’s sales performance. 3.2 Conceptual framework XIV CB004987 Figure 3 - Conceptual framework (Refer to Appendix A) 3.3 Hypotheses Following hypothesis were created in order to determine the relationship between effective VM and consumer purchase intention towards organizations’ sales performance. XV CB004987 Table 3- Developed hypotheses H01 Store Layout has no impact on consumer purchase intention Ha1 Store Layout has a positive on consumer purchase intention H02 Store Atmosphere has no impact on consumer purchase intention Ha2 Store Atmosphere has a positive impact on consumer purchase intention H03 Window Display has no impact on consumer purchase intention Ha3 Window Display has a positive impact on consumer purchase intention Ho4 Time Pressure has no impact on Organization’s sales performance Ha4 Time Pressure has an impact on Organization’s sales performance Ho5 Human Crowding has no impact on Organization’s sales performance Ha5 Human Crowding has an impact on Organization’s sales performance Ho6 Economic situation of consumer has no impact on Organization’s sales performance Ha6 Economic situation of consumer has an impact on Organization’s sales performance H0 – Null Hypothesis Ha – Alternative Hypothesis 3.4 Population and sample Colombo is the most urbanized region which has 693,000 populations and has the highest purchasing power oriented population in Sri Lanka. The population for the study comprises of male and female consumers in Colombo city-limits (Colombo 01-10) who are in between the age of 18-50 years which is 242, 105 (DOCS, 2014), who can be further defined as consumers who have the purchasing power and who shop in fashion outlets in Colombo city limits. Furthermore, Median household income of Colombo region is Rs.50, 071 and average monthly expenditure of per person in clothing, textile and footwear category is Rs.1, 495, which are higher when compared with other regions (DOCS, 2014). Therefore, selecting the Colombo region as the population will be useful and effective in conducting this study. This research will be conducting using “Simple random sampling” which is a subset of a statistical population in which each member of the subset has an equal probability of being chosen. The sample size of this research is 373 consumers from Colombo (01-10) aged between XVI CB004987 18-50 (Sekaran, 2006). However, due to the limitation of the time, sample size is restricted to 230 with confidence level of 95% and marginal error of 5% (Refer to Appendix B). 3.5 Survey instruments A “Questionnaire” was designed using likert scale questions ranged from (1) strongly disagree to (4) strongly agree and close-ended questions to determine the relationship between effective VM and consumer purchasing intention towards organzation’s sales performance. Furthermore, documentary review and Interviews are conducted to collect information regarding organizations’ sales performance. A pilot-survey and reliability test are undertaken in order to prove the validity and internal reliability of consumer statistics. Questionaire was designed including two parts. First part of the quetionaire was included questions to determine the consumer perception and attitude towards visual merchandising elements such as window display, store atmosphere and store layout. The secod part consisted with situational factors where consumeres were provided with three practical scenarios to detrmine their purchasing behavior. Moreover, another questionaire was designed for fashion outlet owners/managers to determine the awareness and attitude towards visual merchandising (refer to appendix C ). 3.6 Data collection An empirical survey is conducted to collect the data from relevant sample, which contained several constructs related to this study of Visual merchandising. A questionnaire is distributed through postal mail, online and face to face discussions. 3.7 Statistical method The PSPP software and Regression statistical method will be utilized to analyze the collected data and test the developed hypothesis. The reliability test will be undertaken in order to prove the internal reliability of consumer statistics. Furthermore, the collected data will be summarized in two forms; Descriptive statistics and Inference testing. XVII CB004987 3.8 Chapter summary This study is based on triangulation-approach by conducting an empirical survey for the 230 consumers within the Colombo city-limits to determine the impact of effective VM on consumer purchasing intention and organzation’s sales performance in fashion retailing. PSPP software and Regression statistical method is utilized to analyze the collected data. The next chapter will provide an overall analysis of collected data. 4.0 Data Analysis 4.1 Reliability test The questionnaire has distributed among 230 individuals in Colombo district (1-10) through using online, postal and face-to-face discussion methods in order to identify the relationship between dependent variable and independent variables. The collected data was analyzed using the PSPP software. Table 4 - Reliability test [Source: PSPPIRE] Reliability Statistic Cronbach’s Alpha No. of Items Consumer Reliability Statistics 0.96 22 The decision rule is to achieve the reliability level of more than 0.69. Therefore, the Cronbach’s Alpha of this research is identified as 0.96 which suggested that the collected consumer statistics have higher internal reliability. 4.2 Sample characteristics Among the 230 individuals who participated, data from 211 was usable, which included respondents from four age groups who lives within the area of Colombo 01-10. The majority of responses were from female respondents (118) between the ages of 18-25 (51.17%) and 26-30 (26.29%) who has more involvement in purchasing fashion merchandise. Moreover, respondents who are in the age category of 18-25 can be considered as youth consumers who are more attached to shopping and new fashion trends. Figure 4 - Age group of respondents [Source: PSPPIRE] XVIII CB004987 Table 5 - Age Category [Source: PSPPIRE] Value Label Value Frequency Percentage 18-25 years 1 109 51.17% 26-30 years 2 56 26.29% 31-40 years 3 26 12.21% 41-50 years 4 20 9.29% 211 100% Total Table 6 – Gender [Source: PSPPIRE] Value Label Value Male 1 93 43.66% Female 2 118 53.34% Total 211 100% Figure 5 - Gender [Source: PSPPIRE] Frequency Percentage XIX CB004987 The collected data has been only limited to area within Colombo 01-10 since Colombo has the highest population with high purchasing power and further with the popular modern fashion outlets. The majority of responses were from Colombo 03, 05, and 07 since most of the popular fashion outlets such as Mondy and Dilly &Carlo are located in these areas. Table 7 - Location [Source: PSPPIRE] Figure 6 - Location [Source: PSPPIRE] Value Label Value Frequency Percentage Colombo-01 1 4 1.88% Colombo-02 2 18 8.45% Colombo-03 3 35 16.43% Colombo-04 4 24 11.27% Colombo-05 5 32 15.02% XX CB004987 Colombo-06 6 22 10.33% Colombo-07 7 27 12.68% Colombo-08 8 29 13.62% Colombo-09 9 12 5.63% Colombo-10 10 8 3.76% 211 100% Total Monthly income of major respondents were ranged between Rs. 20 000-30 000 (35.68%) and Rs. 30 001-50 000 (29.38%) since most of the respondents are young consumers and in the beginning of their job careers. Table 8 - Monthly Income [Source: PSPPIRE] Value Label Value Frequency Percentage Rs. 20000-300 00 1 76 35.68% Rs. 30001-500 00 2 62 29.11% Rs. 50001-750 00 3 32 18.31% Rs. 75001-100 000 4 24 11.37% Rs. 100 000+ 5 10 4.74% 211 100% Total Figure 7 - Monthly Income [Source: PSPPIRE] XXI CB004987 When considering the purchasing frequency of fashion merchandise of respondents, it can be identified that most of the respondents purchase fashion merchandise weekly (26.76%) and monthly (49.77%). Moreover, when analyzing collected data, majority of respondents were female respondents who purchase fashion merchandise weekly and monthly and most of the male respondents purchase quarterly. Furthermore, respondents who purchase fashion merchandise “Daily” were having monthly income more than Rs.100 000. Table 9 - Purchasing frequency [Source: PSPPIRE] Figure 8 - Purchasing frequency [Source: PSPPIRE] Value Label Value Frequency Percentage Daily 1 5 2.35 Weekly 2 57 26.75 Monthly 3 106 49.77 Quarterly 4 31 14.55 Biannually 5 11 5.16 Annually 6 1 0.47 211 100% Total 4.3 Visual merchandising and consumer purchase intention The “Regression Analysis” was utilized to analyze XXII CB004987 the collected data in order to identify the impact of visual merchandising elements of Window Display, Store Atmosphere and Store layout (Independent Variables) on consumer purchase intention (Dependent Variable). In reference to the below table, R square value is 0.45 which indicates that the model explains the variability of the response data around its mean. Table 10 - Model Summary [Source: PSPPIRE] R R Square Adjusted R square Std. Error of the estimate 0.67 0.45 0.44 0.41 The average response rates for each variable were taken in to consideration to identify the consumer attitude and perception towards visual merchandising elements. 4.3.1 Consumer purchase intention (Dependent variable) The questionnaire included four questions in order to determine the impact of effective visual merchandising elements on consumer purchase intention. Thus, respondents were provided with a number of conditions which they can experience in a fashion retail outlet which uses effective visual merchandising. In reference to the below statistics, it clearly reflects that 93.42% of respondents are in “Strongly agree and agree” level while only 3.76% are in “Disagree” level. Moreover, below statistics illustrate the mean of 1.89 with a standard deviation of 0.55 while the most responses (Mode value) are amounted to 1.50, which means that majority of respondents are agreed to purchase fashion merchandise from fashion outlets who have effective visual merchandising elements. Table 11 - Average response of consumer purchase intention [Source: PSPPIRE] Value Frequency Percentage 1.00 8 3.76% 1.25 24 11.27% 1.50 45 21.13% Level Strongly XXIII Total Percentage CB004987 1.75 43 20.19% 2.00 34 15.96% 2.25 19 8.92% 2.50 16 7.51% 2.75 8 3.76% 3.00 6 2.82% 3.25 4 1.88% 3.50 4 1.88% Total 211 Strongly Agree and Agree 93.42% Uncertain 2.82% Disagree 3.76% 100% Mean 1.89 Standard Deviation 0.55 Mode 1.50 Therefore, it can be proved that consumer purchase intention is improved by effective visual merchandising elements because the majority of respondents agreed that if they experience given VM factors in retail outlets, they decide to purchase, spend more and revisit. Figure 9 - Average response of consumer purchase intention [Source: PSPPIRE] XXIV CB004987 4.3.2 Window display (Independent variable 1) The questionnaire included five questions in order to find the consumer perception and attitude towards “Window Display” features such as attractive mannequins, exterior decorations on creating the consumer purchase intention. In reference to the below statistics, it clearly reflects that 87.31% of respondents are in “Strongly agree and agree” level while only 11.28% are in “Disagree” level. Moreover, below statistics illustrate the mean of 1.89 with a standard deviation of 0.73 while the most responses (Mode value) are amounted to 1.60, which means that majority of respondents are agreed to the fact that Window Display has an impact on building consumer purchase intention. Table 12 - Average response of Window display [Source: PSPPIRE] Value Frequency Percentage 1.00 24 11.27% 1.20 24 11.27% 1.40 20 9.39% 1.60 33 15.49% 1.80 31 14.55% 2.00 16 7.51% 2.20 14 6.57% 2.40 10 4.69% 2.60 3 1.41% 2.80 11 5.16% 3.00 3 3.20 Level Total Percentage Strongly Agree and Agree 87.31% 1.41% Uncertain 1.41% 10 4.69% Disagree 3.40 4 1.88% 3.60 4 1.88% 11.28% XXV CB004987 4.00 4 Total 211 1.88% 100% Mean 1.89 Standard Deviation 0.73 Mode 1.60 Therefore, it can be proved that Window Display has a positive influence towards improving consumer purchase intention because the majority of respondents agreed that due to the attractive mannequins, entrance decorations, exterior decorations and impressive merchandise views, Consumers decide to enter and spend more time in fashion retail outlets while increasing their willingness to buy fashion merchandise. Figure 10 - Average response of Window display [Source: PSPPIRE] XXVI CB004987 4.3.3 Store atmosphere (Independent variable 2) The questionnaire included eight questions in order to find the consumer perception and attitude towards “Store Atmosphere” features such as Quality Air conditioning, sufficient volume of background music, fragrance of the outlet and good lighting on creating the consumer purchase intention. In reference to the below statistics, it clearly reflects that 82.15% of respondents are in “Strongly agree and agree” level while only 15.97% are in “disagree” level. Moreover, below statistics illustrate the mean of 2.45 with a standard deviation of 0.60 while the most responses (Mode value) are amounted to 2.14, which means that majority of respondents are agreed to the fact that Store Atmosphere has an impact on consumer purchase intention. Table 13 - Average response of Store atmosphere [Source: PSPPIRE] Value Frequency Percentage 1.43 4 1.88% 1.57 6 2.82% 1.71 13 6.10% 1.86 16 7.51% 2.00 14 6.57% 2.14 32 15.02% 2.29 24 11.27% 2.43 24 11.27% 2.57 15 7.04% 2.71 13 6.10% 2.86 14 6.57% 3.00 4 1.88% 3.14 6 2.82% 3.29 2 0.94% 3.43 7 3.29% 3.57 2 0.94% Level Total Percentage Strongly Agree and Agree 82.15% Uncertain 1.88% Disagree 15.97% XXVII CB004987 3.71 7 3.29% 3.86 5 2.35% 4.00 1 0.47% 4.29 2 0.94% Total 211 Disagree 15.97% 100% Mean 2.45 Standard Deviation 0.60 Mode 2.14 Therefore, it can be proved that Store Atmosphere has a positive influence towards improving consumer purchase intention because the majority of respondents agreed that due to the Quality XXVIII CB004987 Air conditioning, sufficient volume of background music, fragrance of the outlet and Figure 11 - Average response of Store atmosphere [Source: PSPPIRE] good lighting, Consumers spends more time in fashion retail outlets and tend to buy fashion merchandise since above features creates positive consumer mindset and comfortable environment. 4.3.4 Store layout (Independent variable 3) The questionnaire included six questions in order to find the consumer perception and attitude towards “Store layout” features such as creative and systematic arrangement of products, Pictures attached inside the outlet and color of the outlet on creating the consumer purchase intention. In reference to the below statistics, it clearly reflects that 73.21% of respondents are in “strongly disagree and disagree” level while only 22.09% are in “strongly Agree and Agree” level. Moreover, below statistics illustrate the mean of 3.63 with a standard deviation of 0.95 while the most responses (Mode value) are amounted to 4.33, which means that majority of respondents are agreed to the fact that Store layout does not have a direct impact on consumer purchase intention. Table 14 - Average response of Store layout [Source: PSPPIRE] Value Frequency Percentage 1.00 4 1.88% 1.17 4 1.88% 1.50 1 0.47% 1.83 6 2.82% 2.00 7 3.29% 2.33 4 1.88% 2.50 8 3.76% Level Strongly Agree and Agree XXIX Total Percentage 22.09% CB004987 2.67 8 3.76% 2.83 5 2.35% 3.00 5 2.35% Uncertain 2.35% 3.17 6 2.82% 73.21% 3.50 19 8.92% 3.67 29 13.62% Strongly Disagree and Disagree 3.83 8 3.76% 4.00 8 3.76% 4.17 3 1.41% 4.33 44 20.66% 4.50 26 12.21% 4.60 5 2.35% 4.80 10 4.69% 5.00 1 0.47% Total 211 100% Mean 3.63 Standard Deviation 0.95 Mode 4.33 XXX CB004987 Therefore, it can be proved that Store Layout does not have a positive influence towards improving consumer purchase intention because the majority of respondents disagreed to the fact that creative and systematic arrangement of products, Pictures attached inside the outlet and color of the outlet assist to improve the consumer purchase intention. Figure 12 - Average response of Store layout [Source: PSPPIRE] 4.3.5 Inference testing Multiple regression analysis has been performed in order to test the developed hypothesis. The decision rule is to reject null hypothesis and accept alternative hypothesis if T value is more than one. In reference to the below table, “t” value of window Display and Store atmosphere can be identified as 3.19 and 2.48. Thus, it reflects that there is an impact of Window Display and Store Atmosphere variables towards Consumer purchase intention. Therefore, alternative hypothesis of those two variables can be accepted. However, since Store layout has a “t” value of less than one, Null hypothesis should be accepted due to the fact that there is no impact of store layout on consumer purchase intention. This can be further validated form the collected data, since majority of respondents 73.21% were disagreed to the fact that their purchase intention is improved through store layout. Moreover, higher the beta value the greater the impact of the XXXI CB004987 independent variable on the dependent variable. Thus, Window Display and Store Atmosphere have greater impact on consumer purchase intention because Standardized Coefficient (Beta) values are 0.36 and 0.23 respectively. However, there is a less impact of Store Layout on Consumer purchase intention since the Beta value is only 0.13 which is a less value when comparing with other two independent variables. Table 15 - Inference testing for consumer purchase intention [Source: PSPPIRE] Unstandardized Coefficients Standardized Coefficients “t” value Significance B Std. Error Beta (Constant) 0.66 0.12 0.00 5.39 0.000 Window Display 0.27 0.08 0.36 3.19 0.002 Store Atmosphere 0.21 0.08 0.23 2.48 0.014 Store Layout 0.08 0.09 0.13 0.93 0.354 When considering above analyzed data, following hypothesis can be accepted. • Ha1 - Window Display has a positive impact on consumer purchase intention • Ha2 - Store Atmosphere has a positive impact on consumer purchase intention • Ho3 - Store Layout has no impact on consumer purchase intention 4.4 Visual merchandising and organization’s sales performance The “Regression Analysis” was utilized to analyze the collected data in order to identify the impact of visual merchandising elements on organization’s sales performance. Thus, three situational factors (Time Pressure, Human Crowding and Economic situation) were considered as the independent variables in order to find if there is any impact on Organization’s sales performance (Dependent Variable). In reference to the below table, R square value is 0.48 which indicates that the model explains the variability of the response data around its mean. XXXII CB004987 Table 16 - Model summary 2 [Source: PSPPIRE] R R Square Adjusted R square Std. Error of the estimate 0.69 0.48 0.47 0.40 The average response rates for each variable were taken in to consideration to identify the impact of above three situational factors on sales performance. 4.4.1 Reliability test The questionnaire has distributed among 230 individuals in Colombo district (1-10) through using online, postal and face-to-face discussion methods in order to identify the relationship between dependent variable and independent variables. The collected data was analyzed using the PSPP software. Table 17 - Reliability test 2 [Source: PSPPIRE] Reliability Statistic Cronbach’s Alpha No. of Items Consumer Reliability Statistics 0.75 11 The decision rule is to achieve the reliability level of more than 0.69. Therefore, the Cronbach’s Alpha of this research is identified as 0.96 which suggested that the collected consumer statistics have higher internal reliability. 4.4.2 Organization’s sales performance (Dependent variable) The questionnaire included three questions in order to determine the impact of three situational factors (Time Pressure, Human Crowding and Economic situation) on consumer purchasing decision. Thus, consumers were provided with three scenarios in order to determine their purchasing behavior according to those scenarios. In reference to the below statistics, it clearly reflects that 92.06% of respondents are in “strongly agree and agree” level while only 3.74% are in “disagree” level. Moreover, below statistics illustrate the mean of 1.89 with a standard XXXIII CB004987 deviation of 0.55 while the most responses (Mode value) are amounted to 1.50, which means that majority of respondents are agreed to delay their purchase decision and revisit store later if they have experienced any of above mentioned situational factors while they are shopping. Table 18 - Average response of Sales performance [Source: PSPPIRE] Value Frequency Percentage 1.00 8 3.74% 1.25 24 11.21% 1.50 45 21.03% 1.75 43 20.09% 2.00 34 15.89% 2.25 19 8.88% 2.50 16 7.48% 2.75 8 3.74% 3.00 6 2.80% 3.25 4 1.87% 3.50 4 1.87% Total 211 Level Total Percentage Strongly Agree and Agree 92.06% Uncertain 2.80% Disagree 3.74% 100% Mean 1.89 Standard Deviation 0.55 Mode 1.50 XXXIV CB004987 Therefore, it can be proved that consumers’ actual transaction of fashion merchandise will get delayed due to the situational factors. However, majority of respondents have agreed to the fact that they will revisit and repurchase products. Therefore, it can be identified that there will be a long term positive sales impact for organization’s sales performance due to the effective Visual merchandising. Figure 13 - Average response of Sales performance [Source: PSPPIRE] 4.4.3 Time pressure (Mediating variable 1) A scenario is provided including three questions in order to determine the impact of Time pressure on consumers’ actual purchase decision and shopping experience. In reference to the below statistics, it clearly reflects that 82.15% of respondents are in “strongly agree and agree” level while only 15.97% are in “disagree” level. Moreover, below statistics illustrate the mean of 2.45 with a standard deviation of 0.60 while the most responses (Mode value) are amounted to XXXV CB004987 2.14, which means that majority of respondents are agreed to delay their purchase decision and revisit store later if they are under severe time constraints. Table 19 - Average response of Time pressure [Source: PSPPIRE] Value Frequency Percentage 1.43 4 1.88% 1.57 6 2.82% 1.71 13 6.10% 1.86 16 7.51% 2.00 14 6.57% 2.14 32 15.02% 2.29 24 11.27% 2.43 24 11.27% 2.57 15 7.04% 2.71 13 6.10% 2.86 14 6.57% 3.00 4 1.88% 3.14 6 2.82% 3.29 2 0.94% 3.43 7 3.29% 3.57 2 0.94% 3.71 7 3.29% 3.86 5 2.35% 4.00 1 0.47% 4.29 2 0.94% Total 211 Level Total Percentage Strongly Agree and Agree 82.15% Uncertain 1.88% Disagree 15.97% 100% Mean 2.45 Standard Deviation 0.60 XXXVI CB004987 Mode 2.14 Figure 14 - Average response of Time pressure [Source: PSPPIRE] Therefore, it can be identified that organizations short-term sales performance will be reduced due to the fact that majority of respondents have disagreed to go for a quick purchase decision if they are under severe time constraints. However, there will be a long term positive impact for organization’s sales performance since majority of respondents have agreed to revisit and repurchase products. Moreover, when analyzing the collected data, it can be identified that the majority of respondents who have disagreed to delay the purchase decision are in the category of higher income level which is more than Rs. 100 000. 4.4.4 Human crowding (Mediating variable 2) A scenario is provided including three questions in order to determine the impact of Human Crowding on consumers’ actual purchase decision and shopping experience. In reference to the below statistics, it clearly reflects that 86.91% of respondents are in “strongly agree and agree” level while only 10.29% are in “disagree” level. Moreover, below statistics illustrate the mean of 1.89 with a standard deviation of 0.73 while the most responses (Mode value) are amounted to 1.60, which means that majority of respondents are agreed to delay their purchase decision and go for another outlet or revisit later if there is a huge crowd inside outlet. XXXVII CB004987 Table 20 - Average response of human crowding [Source: PSPPIRE] Value Frequency Percentage 1.00 24 11.21% 1.20 24 11.21% 1.40 20 9.35% 1.60 33 15.42% 1.80 31 14.49% 2.00 16 7.48% 2.20 14 6.54% 2.40 10 4.67% 2.60 3 1.40% 2.80 11 5.14% 3.00 3 1.40% 3.20 10 4.67% 3.40 4 1.87% 3.60 4 1.87% 4.00 4 1.87% Total 211 Level Strongly Agree and Agree Total Percentage 86.91% Uncertain 1.40% Disagree 10.29% 100% Mean 1.89 Standard Deviation 0.73 Mode 1.60 XXXVIII CB004987 Figure 15 - Average response of human crowding [Source: PSPPIRE] Therefore, it can be identified that organizations short-term sales performance will be reduced due to the fact that majority of respondents have disagreed to purchase fashion merchandise if they experience a huge crowd inside the outlet. However, there will be a long term positive impact for organization’s sales performance since majority of respondents have agreed to revisit and repurchase products. Moreover, when analyzing the collected data, it can be identified that 74.5% of respondents have disagreed to do the actual transaction if they experience a huge crowd in point of purchase. Therefore, human crowding can be identified as a cause for consumers to feel uncomfortable while shopping and to deteriorate their consumer purchase intention. 4.4.5 Economic situation (Mediating variable 3) A scenario is provided including three questions in order to determine the impact of economic situation of consumers on their actual purchase decision and shopping experience. In reference to the below statistics, it clearly reflects that 73.37% of respondents are in “strongly agree and agree” level while only 12.61% are in “disagree” level. Moreover, below statistics illustrate the mean of 2.48 with a standard deviation of 0.62 while the most responses (Mode value) are XXXIX CB004987 amounted to 2.67, which means that majority of respondents are agreed to delay their purchase decision and go for alternative low price fashion merchandise in same outlet or different outlet, or revisit later if they are in an economic downturn situation. Table 21 - Average response of economic situation [Source: PSPPIRE] Value Frequency Percentage 1.00 6 2.80% 1.33 8 3.74% 1.67 16 7.48% 2.00 27 12.62% 2.33 49 22.90% 2.67 51 23.83% 3.00 30 14.02% 3.33 13 6.07% 3.67 7 3.27% 4.00 3 1.40% 4.33 1 0.47% Total 211 Level Strongly Agree and Agree Total Percentage 73.37% Uncertain 14.02% Disagree 12.61% 100% Mean 2.48 Standard Deviation 0.62 Mode 2.67 XL CB004987 Therefore, it can be identified that economic situation of a consumer can be adversely affected for organizations short-term sales performance since majority of respondents have disagreed to purchase fashion merchandise if they experience an economic downturn situation. However, there will be a long term positive impact for organization’s sales performance since majority of respondents have agreed to revisit and repurchase products when their economic situation get improved. Therefore, economic situation of consumers have a significant impact on organizations sales performance. Figure 16 - Average response of economic situation [Source: PSPPIRE] 4.4.6 Inference testing Regression analysis has been performed in order to test the developed hypothesis. The decision rule is to reject null hypothesis and accept alternative hypothesis if “t” value is more than one. In reference to the below table, T value of all three situational factors are above one. Thus, it reflects that there is an impact of Time Pressure, Human Crowding and Economic Situation variables towards Organization’s sales performance. Therefore, alternative hypothesis of those three variables can be accepted. Moreover, higher the beta value the greater the impact of the XLI CB004987 independent variable on the dependent variable. Thus, Time Pressure, Human Crowding and Economic Situation have greater impact on organization’s sales performance because Standardized Coefficient (Beta) values are 0.25, 0.37 and 0.20 respectively. Furthermore, decision rule is to accept alternative hypothesis and reject null hypothesis, if significance value is less than 0.05. Therefore, alternative hypotheses of all three variables can be accepted since all have less significance value than 0.05. Table 22 - Inference testing for sales performance [Source: PSPPIRE] Unstandardized Coefficients Standardized Coefficients “t” value Significance B Std. Error Beta (Constant) 0.38 0.14 0.00 2.76 0.006 Time Pressure 0.22 0.07 0.25 3.33 0.001 Human Crowding 0.27 0.06 0.37 4.82 0.000 Economic situation 0.18 0.05 0.20 3.41 0.001 When considering above analyzed data, following hypothesis can be accepted. • Ha4 – Time Pressure has an impact on Organization’s sales performance • Ha5 – Human Crowding has an impact on Organization’s sales performance • Ha6 – Economic situation of consumer has an impact on Organization’s sales performance 4.5 Chapter summary This chapter overall examined the data collected through the questionnaire. It was identified that majority of respondents are female consumers, at the age of 18-25 who has an income level between Rs.20 000-30 000. Moreover, it was identified that majority of respondents are purchase fashion merchandise once a month. The descriptive data analysis reflects that independent variables of window display, store atmosphere and situational factors have “t” value greater than one, which in turn has a greater impact to the dependent variable of competitive advantage. XLII CB004987 However, store layout has a less impact to the dependent variable since it has a “t” value less than one. Hence, the linear regression analysis concluded that all the null hypothesis to be rejected except store layout, while alternative hypothesis to be accepted to reflect that there is a strong relationship between variables analyzed. The next chapter will provide a broad discussion on analyzed data. 5.0 Discussion of Findings The major thrust of the current study is to understand the relationship of the importance of effective visual merchandising elements on consumer purchase intention and Organizations sales performance. Thus, this chapter provides a broad view on interpretation of findings to the identified objectives and outlines the elements and aspects associated with it. 5.1 Effective visual merchandising and consumer purchase intention The findings reflect that effective visual merchandising elements such as Window Display and Store atmosphere have a strong impact on consumer purchase intention. According to the findings, majority of respondents have agreed to the fact that attractive mannequins, exterior and entrance decorations captured consumers attention quickly. XLIII CB004987 Table 23 - Significance of visual merchandising elements [Source: (PSPPIRE)] Variable Window Display “t” 3.19 Significance Description 0.002 This factor has a greater positive impact on consumer purchase intention since the significance value is less than 0.05 Store atmosphere 2.48 0.014 This factor has a greater positive impact on consumer purchase intention since the significance value is less than 0.05 Store Layout 0.93 0.354 This factor does not have a greater impact on consumer purchase intention since the significance value is more than 0.05 This is further validated by Ghag (2013) who discovered that consumers are easily disposed to impulse buying when they enter stores that have good display patterns such as effective Window Displays with eye catching mannequins featuring fashion merchandise which attracts consumers’ attention and improve their consumer purchase intention. Conversely, it can be argued that most of the consumers are willing to go for fashion outlets which have good reputation among the community. But when considering the reasons behind their good reputation, it’s basically because of the effective usage of visual merchandising elements. The findings of store atmosphere were in agreement with the views of Ballantine et al., (2015), who discovered that interior furnishings, lighting, music, and temperature plays a crucial role in improving consumer purchase intention since these features make consumers feel more comfortable inside the store. Donovan et al. (1994) have previously stated that comfort in-store is essential because of the significant influence it can have on consumer purchase intentions. This is further validated by Chang et al., (2015) who identified that sufficient volume of soft music found to be the optimum level to induce participant comfort in-store. Moreover, when analyzing collected data, it can be identified that majority of respondents have disagreed to the fact that loud background music motivates consumers to spend more time inside the store. Ballantine et al., (2015) further validated above finding by discovering that excessively loud music made XLIV CB004987 consumers feel uncomfortable, as they had to strain to hold a conversation and could not concentrate on the merchandise. Parsons (2011) has found that following features plays a crucial role in creating attractive store atmosphere which makes consumers feel comfortable while shopping and improve their purchase intention. Table 24 - Prior research findings [Source: (Parsons, 2011)] Condition Music style Response Easy listening (40.0%); popular (top 40) (28.6%) Music volume Average (2.94: 0.072) Music tempo Average (3.03: 0.079) Music familiar and preferred by customers Yes (91.2%) Other sounds No other sounds (80%) Scent present No (76.5%) Scent pleasant Pleasant (2.13: 0.350) Scent congruence Temperature controlled Temperature Flooring Somewhat congruent (2.00: 0.267) Yes (85.3%) 18-251C (75.8%); 10-171C (18.2%) Carpet (73.0%); wood (32.4%); concrete (21.6%); vinyl (16.2%); tiles (13.5%) Lighting level Bright (2.08: 0.095) Lighting color Translucent (86.0%); white (14.0%) Lighting source Halogen (55.3%); natural light (50.0%); exposed fluorescent (42.1%); When considering about the Store Layout feature, it can be identified that Store layout does not have a greater impact on improving consumer purchase intention since majority of respondents have disagreed. However, disagreements may arise if the layout was cramped since consumers may face difficulty moving around the store to view fashion merchandise. Moreover, Levy and XLV CB004987 Weitz (1998) discovered that the more visible a product is, the greater the chance of being purchased. Thus, effective and attractive arrangement of the store space can be identified as a significant feature for fashion retail outlets to consider. However, Schiffman and Kanuk (2007) viewed consumers as rational decision makers who are only concerned with self interest. It can be identified that effective visual merchandising elements can create a positive attitude towards consumers’ mind which in turn affect for affective and cognitive states of consumer and improve consumer purchase intention while motivating and satisfying consumer to purchase fashion merchandise. Thus, it reflects the validity and usefulness of S-O-R model in terms of evaluating consumer purchase intention. Moreover, author has carried out interviews with managers/owners of fashion retail outlets in order to support the main research objectives. According to collected data, it can be identified that majority of managers considered effective visual merchandising as an investment rather than a cost since providing an attractive and comfortable environment assist to improve consumer purchase intention. Therefore, it can be identified that there is positive relationship between effective visual merchandising and consumer purchase intention in fashion retailing. 5.2 Effective visual merchandising and organizations sales performance The findings reflect that consumer will delay their purchasing decision if they experience any situational factors (Time Pressure, Human crowding and economic situation) while they are shopping. Time pressure can be identified as a serious threat since it allows consumers to either go for a quick purchase decision or delay their purchase decision. As stated by Stahlberg and Maila (2010), 68% customer purchasing decisions are unplanned. Therefore, it can be argued that there is a less possibility of going for a quick purchase decision since majority of customers decides what to buy when they enter in to the outlet. However, according to data collected, 15.97% of respondents have disagreed to delay their purchase decision. Thus, the reasons behind their quick purchase decision can be identified as either they are in high income level or they have already decided the fashion merchandise to buy before they enter in o the outlet. Moreover, it can be identified that if consumer has any emergency need to purchase fashion merchandise, consumer will go for a quick purchase decision. XLVI CB004987 Table 25 - Significance of Situational factors [Source: (PSPPIRE)] Variable Time Pressure Human Crowding Economic situation “t” 2.76 3.33 4.82 Significance Description 0.006 This factor has a greater positive impact on sales performance intention since the significance value is less than 0.05 0.001 This factor has a greater positive impact on sales performance intention since the significance value is less than 0.05 0.000 This factor has a greater positive impact on sales performance intention since the significance value is less than 0.05 The findings of human crowding were in agreement with the views of Ballantine et al., (2015), who discovered that Fashion outlets that were not crowded increased the amount of time consumers spent in-store, as they felt more comfortable. In comparison, a crowded fashion outlet decreased the amount of time spent in-store, as consumers did not feel comfortable and had difficulty accessing merchandise. Moreover, as findings reflected, 86.91% respondents have agreed to delay their purchase decision if they experience huge crowd inside the store. But this can be adversely affected for short-term sales performance of the organization since majority of consumers are likely to delay their purchase decision. Furthermore, it can result a black mark on the reputation of the company since consumers will spread the bad impression among the others. However, there will be an increase in long term sales performance since majority of respondents agreed to revisit and purchase due to the usage of effective visual merchandising elements which assist to capture consumers’ attention. According to collected data, a consumer with an economic downturn situation will either delay his/her purchase decision or go for an alternative low price fashion merchandise which suits his/ her requirements because people are becoming more price conscious; therefore, low price product may become their target. However, majority of respondents agreed to delay their XLVII CB004987 purchase decision and revisit and purchase later when their economic situation get improved. But 66.7% respondents were in agreement with purchasing low price alternative products in the same outlet. Thus, the major reason can be identified as the properly structured elements of visual merchandising, which results in providing eye catching shopping environment for consumers which in turn assist to capture their attention and improve their purchase intention while increasing the customer loyalty. Therefore, it can be identified that Time pressure and economic situation of the consumer cannot be avoided since these factors are embedded to the consumers. However, human crowding aspect can be solved by using effective and properly structured store layout systems which in turn can provide more space for consumer to shop and make them feel more comfortable. Moreover, it can be identified that short-term sales performance of organizations have adversely affected due to the situational factors, but there is a positive impact on long term sales performance since majority of respondents have agreed to revisit and purchase fashion merchandise if they experience any of the above situational factors. According to collected data from interviews, it can be identified that successful visual merchandising can enhance a store's image by displaying fashion merchandise in ways that are appealing, accessible and attractive, in which retailers can increase sales and improve their profit margins. Therefore, it can be identified that there is positive relationship between effective visual merchandising and organizations sales performance in fashion retailing. 5.3 Strengths and weaknesses The selected sample size of the research can be identified as the most suitable sample since Colombo is considered as the biggest commercial city in Sri Lanka which has highest purchasing power than other areas. Moreover, research has been limited to the consumers between age group of 18-50, which can be identified as the most relevant age category who has purchasing power and interest in fashion. However, lack of resources available in Sri Lankan context in terms of visual merchandising can be identified as the major weakness. Moreover, only few fashion retail outlets have implemented XLVIII CB004987 effective visual merchandising elements in their stores and further the majority of fashion outlets considered visual merchandising as a cost rather than a valuable investment. 5.4 Limitations of the study The following limitations were resulted due to the time constraints nature of this research. • The research has been limited to Colombo 01-10 since majority of modern fashion outlets are located in Colombo region. • The research has been carried out only for single fashion retail outlets (Shopping malls were not considered). • The collection of actual sample size was not possible due to the time constraints, thus, sample size of the research has been limited 230. • The survey used mostly closed ended questions without given respondents the ability to openly answer questions. 5.5 Areas for future research This research has been only limited to single fashion outlets located in Colombo region. Therefore, it can be identified that researchers can further examine the usage of visual merchandising in shopping malls as a future area of research due to the fact that consumers are attracted as a result of shopping mall ambiance. Thus, future researchers can analyze the impact and relationship of effective visual merchandising in shopping malls and consumer attraction. Moreover, it can be proposed for researchers to examine the awareness of visual merchandising elements in the perspective of Sri Lankan fashion retail outlets. Moreover, future research should attempt to minimize limitations of this exploratory study by increasing the number of the sample size, including more regions to the study. 5.6 Chapter Summary This chapter overall identified that the main objectives of the research is achieved through the findings and analysis conducted. Author has provided prior research findings in order to validate research findings. Hence, it can be identified that there is strong impact on visual merchandising XLIX CB004987 elements on consumer purchase intention while situational factors adversely affecting to the organizations’ short term sales performance. However, it can be identified that the effective visual merchandising elements have a greater impact on increasing long term sales performance of the organization. 6.0 Conclusion The term “effective Visual Merchandising” is a salient concept in the fashion retailing sector. Thus, the main purpose of this study is to provide a broad insight in to VM and its impact on consumer purchase intention and organization’s sales performance because this is a neglected area of study in terms of Sri-Lankan fashion retailing. The scope of the research has been only limited to Colombo city limits since it is the most urbanized area in Sri-Lanka and has the consumers with highest purchasing power. According to the previous literature, most researchers have identified the fact that effective VM elements play a crucial role towards improving consumer purchase intention. The S-O-R model was used to analyze the relationship between visual merchandising and consumer purchase intention. However, literature related to the impact of VM on sales performance can be considered as a neglected area of study because only few researchers have examined the situational factors affecting the consumer impulse buying, but could not be able to identify its impact on sales performance. Therefore, the above aspect can be identified as an area for future study. Data collection is conducted using triangulation approach in order to address the importance of effective VM on consumer purchase intention and organization’s sales performance. Thus, questionnaire was distributed among 230 consumers through online, face to face and postal methods. The key findings of the research reflect that effective visual merchandising elements have a greater impact on consumer purchase intention and organization’s sales performance due L CB004987 to the fact that visual merchandising provides attractive and comfortable shopping atmosphere for consumers. However, as identified in data analysis chapter, store layout does not have any significant impact on consumer purchase intention. Situational factors play a crucial role in terms of delaying consumers actual purchase decision. However, author recommends that adverse impact of human crowding feature can be minimized by using properly structured and effective store layout system. Ultimately, key findings prove that the objectives are achieved and research statement is proven to be true since majority of respondents were agreed to the point that visual merchandising has a greater impact on consumer purchase intention, while increasing the sales growth. References Armel, K.C. and Rangel, A. 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Perceived Retail Crowding and Shopping Satisfaction: What Modifies This Relationship?. Journal of Consumer Psychology, 9(1), pp.29-42. Machleit, K.A. and Mantel, S.P. (2001), “Emotional response and shopping satisfaction: moderating effects of shopper attributions”, Journal of Business Research, Vol. 54, No. 2, pp. 97-106. Available from: http://www.sciencedirect.com. [Accessed: 14th November 2015]. Mehrabian, A. and Russell, J.A. (1974), An Approach to Environmental Psychology, MIT Press, Cambridge, MA. Mehta, N. and Chugan, P. (2014). Impact of Visual Merchandising on Consumer Behavior: A Study of Furniture Outlets. Universal Journal of Management, 2(6), pp.207-217. Available from: http://www.emaraldinsight.com. [Accessed: 19th November 2015]. Mirabi, V., Akbariyeh, H. and Tahmasebifard, H. (2015). A Study of Factors Affecting on Customers Purchase Intention Case Study: the Agencies of Bono Brand Tile in Tehran. 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Window displays and consumer shopping decisions. Journal of Retailing and Consumer Services, 278-290. Available at: http://ac.elscdn.com [Accessed: 17th November 2015]. Stahlberg, M. and Maila, V. (2010), Shopper Marketing: How to Increase Purchase Decisions at the Point of Sale, Kogan Page, Philadelphia, PA. VMSD, (2015). | Visual Merchandising and Store Design. [online] Visual Merchandising and Store Design. Available at: http://vmsd.com/ [Accessed 7 Nov. 2015]. LIV CB004987 Wu, J., Kim, A. and Koo, J. (2015). Co-design visual merchandising in 3D virtual stores: a facet theory approach. Intl J of Retail & Distrib Mgt, 43(6), pp.538-560. Available from: http:// www.emaraldinsight.com. [Accessed: 16th November 2015]. APPENDICES Appendix A Researchers have found that affective states experienced while shopping in fashion retail stores influence customers satisfaction and purchase intention (Machleit and Mantel, 2001). This is further supported by Eroglu et al. (2003), who found that images of the merchandise, music, color, background patterns, layout, and fonts have a strong impact on consumer purchase intention. The cognitive states of consumers can be defined as the internal- mental states of individuals which can be affected by perception of information provided (Faryabi et al., 2012). LV CB004987 Affective states Affective states can be defined as the moods, arousal, and pleasure of consumers. Store environmental cues such as color, background pattern, music, stimulate consumers’ affective states, which in turn, result in greater purchase intention. Cognitive states It can be defined as the internal- mental states of individuals such as perception of information provided to consumers, which is positively related to the purchase intention. Motivation Consumer’s desire/ willingness to purchase a specific product. Satisfaction A psychological process of evaluating outcomes based on predetermined expectations. Source: based on (Ha and Lennon, 2010) and (Machleit and Mantel, 2001) Appendix B The following table is used to calculate the sample size Table 26- Sample Size Confidence Level 95% Marginal Error Population size 5% 3% 1% 50 000 381 1045 8057 100 000 383 1056 8762 250 000 384 1063 9249 500 000 384 1065 9423 Source: (Barlett et al., 2001) Sample Size = (384/500 000)*242 105 = 373 LVI CB004987 Appendix C 07th January 2016 Dear Sir/Madam, The Asia Pacific Institute of Information Technology (APIIT-Lanka) is a leading higher education institute established in collaboration with Staffordshire University-UK to offer tertiary education. As a part of the course assessment for the final year of the degree, I am undertaking this survey to gather required information in order to complete the assessment. Therefore, I wish to explore the possibility of you providing the assistance needed in gathering the required information from you, for the successful completion of the assignment. The main aim of this survey is to gather information regarding Visual merchandising and its impact on consumer purchase intention. Visual merchandising can be identified as a subject which provides opportunity to design and maintain the fashion retail outlet in an attractive manner in terms of exterior and interior decorations, Store layout and most importantly attractive store atmosphere. Basically, the role of visual merchandising is to capture the consumers’ LVII CB004987 attention by providing eye-catching shopping environment which makes consumers to shop for a long period of time and purchase more products. Few elements of effective visual merchandising are as follows. • Featuring new styles/designs on Mannequins • Window Display • Store layout and attractive environment Your views regarding the survey are very important and I would therefore be very grateful if you would spend a few minutes to complete the enclosed questionnaire. I assure you that the information gathered will be utilized only for the academic purpose and will be treated in the strictest confidence. LVIII CB004987 Thank you in anticipation of your cooperation. Would you like to Participate for the Research? Yes No Questionnaire Gender Born Year – Male – 1966-1975 Female 1979-1985 1986-1990 1991-1998 City (Colombo 01-10) – Monthly Income – Rs. 20 000 – 30 000 Rs. 50 001 – 75 000 Rs. 30 001 – 50 000 Rs. 75 001 – 100 000 How often do you purchase fashion products? Daily Weekly Quarterly 2- Disagree Monthly Bi-annually Please complete the following questions by placing a tick 1 – Strongly Disagree Rs. 100001+ 3- Agree Annually in the appropriate box. 4- Strongly Agree Visual Merchandising elements 1 Window Display I choose to enter in to a store because of attractive mannequin and product views. Attractive exterior decorations capture my attention easily and create positive perception towards the store. LIX 2 3 4 CB004987 The attractive entrance decoration motivates me to enter in to the store. Attractive product exhibits motivate me to look at the products more clearly. I tend to stay more time when I see attractive and impressive product views. I tend to buy when I come across attractive and impressive product views. I tend to buy when I see a featuring a new style/design on mannequin. Store Atmosphere Listening to music creates a relax atmosphere while shopping. Pleasant environment created by music makes me spend more time in the store. The sufficient volume of background music motivates me to buy more because it increases my well-being and comfort. The loud volume of background music motivates me to buy more because it increases my well-being and comfort. Fragrance of the retail outlet makes me to stay more time and encourages me to purchase more. The quality of the air conditioning makes me comfortable while shopping. The lighting of the outlet makes things more visible and attractive. The good lighting in the outlet is pleasing to the eyes, and attracts me towards purchasing more products. The cleanliness of the outlet motivates me to stay and buy more, and attracts me to revisit again. Store Layout The creative and systematic arrangement of products makes me easy to select products. The color of the outlet creates a positive image in my mind set. LX CB004987 Product items that are placed according to the color makes me easy to find them. Pictures attached inside the outlet creates a positive image in my mind set and captures my attention easily. The clean shelves of the store motivate me to go through more products. Products displayed in closer to point of purchase captures my attention quickly and motivate me to purchase more. Signage in form of tags offers more information about the product which motivates me more to buy the product. Attractive exterior decorations (Entrance lighting, etc) • Attractive and impressive product views • Attractive displaying of products using mannequin • Pleasant environment created by sufficient volume of music • Good Fragrance of the retail outlet • Eye-caching lightening system • Quality air conditioning • Clean environment • Clean, Creative and systematic arrangement of products • Signage in form of tags includes more information about the products • Attractive wall colors and pictures If you have experienced above conditions when you shopping, • Do you like to purchase in the retail outlet? Yes No • Do you like to shop longer in the retail outlet? Yes No LXI CB004987 • Do you like to revisit and repurchase products again? Yes No • Do you like to tell your family, friends about the retail outlet? Yes No If your answer is “No” for the any of above question, State the reason in the space given below. ➢ ……………………………………………………………………………………………… …………………………………………………………………………………………….... ➢ ……………………………………………………………………………………………… ……........................................................................................................................................ ➢ ……………………………………………………………………………………………… ……………………………………………………………………………………................ ➢ ……………………………………………………………………………………………… ……………………………………………………………………………………………… PART II Fill following tables according to the given situation. If your shopping time is limited and you are under severe time constraints, 1 – Strongly Disagree 2- Disagree 3- Agree 4- Strongly Agree 1 Time pressure I tend to go for a quick purchase decision I tend to delay the purchase decision LXII 2 3 4 CB004987 I will revisit the store again and repurchase the product I will go for another shopping outlet later and look for different products If there is a huge crowd inside the retail outlet and you feel uncomfortable, 1 Perceived crowding 2 3 4 I will continue shopping and purchasing products I tend to go for another fashion outlet I will revisit the store later and purchase the products You have already selected products to purchase and if point of purchase is crowded and you have to spend more time to do the actual transaction, 1 Perceived crowding 2 3 4 I will purchase products I have selected I will revisit the store again and repurchase the products I have selected I will go for another shopping outlet later and look for similar types of products If you are in an economic downturn situation and you have selected some products which are expensive, 1 Economic Situation LXIII 2 3 4 CB004987 I will purchase products I have selected I tend to delay the purchase decision I will go for an alternative low cost products rather than expensive ones in the outlet I will revisit the store again and purchase the product when my economic situation gets better. I will go for another shopping outlet and look for alternative low cost products If you have any further comments, write below. ……………………………………………………………………………………………………… ……………………………………………………………………………………............................ …………………………………………………………………………………………………….... ....................................................................................................................................……………… ……………………………………………………………………………………………………… …………………………………………………………................………………………………… ……………………………………………………………………………………………………… ……………………………………………………………………………………………………… Thank you for your help and contribution towards this study LXIV CB004987 Questionnaire Location (Colombo 01-10) 1. Is Visual merchandising a significant area of study in terms of Fashion retailing? And why? Yes No ……………………………………………………………………………………………………… ……………………………………………………………………………………............................ ……………………………………………………………………………………………………... 2. What type of marketing strategies do you like to prefer? And why? • TV advertisements • Poster/ Banner advertisements ` • Sales Promotions (Discounts) • Layout planning • Lightening and Sounding system • Exterior and Interior decorations • Layout designing ……………………………………………………………………………………………………… ……………………………………………………………………………………............................ ……………………………………………………………………………………………………... 3. What do you think about Visual Merchandising? Is it a cost or an investment for the Company? And why? I considered Visual merchandising as a cost I considered Visual merchandising as an investment LXV CB004987 ……………………………………………………………………………………………………… ……………………………………………………………………………………............................ ……………………………………………………………………………………………………... 4. Effective visual merchandising elements help to increase the sales performance of the organization? Yes No ………………………………………………………………………………………………… …………………………………………………………………………………………............ Please complete the following questions by placing a tick 1 – Strongly Disagree 2- Disagree 3- Agree in the appropriate box. 4- Strongly Agree 1 Visual Merchandising Visual Merchandising helps to make the outlet attractive to the consumers. Visual Merchandising helps to make comfortable atmosphere and better shopping experience for customers. Visual Merchandising helps to create a positive image in consumer’s mind set. Visual Merchandising is a cost rather than an effective marketing tool. Visual merchandising is an effective investment in terms of long-term result oriented aspect. Visual merchandising helps to increase the sales performance of the organization in the long run. Investing on Visual merchandising is a waste of money. Investing money on short term result oriented marketing campaigns such as TV advertisements are very much effective than investing on visual merchandising. LXVI 2 3 4 CB004987 If you have any further comments about Visual merchandising, write below. ……………………………………………………………………………………………………… ……………………………………………………………………………………............................ …………………………………………………………………………………………………….... ....................................................................................................................................……………… ……………………………………………………………………………………………………… Thank you for your help and contribution towards this study Ethics Approval Form APIIT Sri Lanka/Staffordshire University Application for Ethical Approval of Research Dissertation This form must be completed by the researcher, and submitted to the designated supervisor, who should consider it and if approved, then forward it to the APIIT Research Ethics Committee. The latter should keep it on file as an agreed record of the research being undertaken. Proposals for staff research projects that require ethical approval should also be considered by this Committee. 1. RESEARCHER Name: D.G Kushan Ravindu Lakshitha Faculty: Business Supervisor/ Head of Field: Ms. Shurmara Fernando Academic status of applicant: Undergraduate Commencement and expected duration of Dissertation: 09th February 2016 (15 weeks) 2. DISSERTATION Title: Sri Lankan Fashion Retailing: Using effective Visual Merchandising to improve consumer purchase intention LXVII CB004987 Please offer a brief paragraph indicating answers to the following questions where relevant: Where the research is to be carried out; Whether adequate facilities are in place enabling the dissertation to be properly carried out; • Whether procedures are in place given the occurrence of any adverse event; • Names of other individuals or organizations involved in the dissertation; • Whether other approvals have been gained or are to be sought.++ The research is based on the Colombo city limits (Colombo 01-10) since most of the population with higher purchasing power and large numbers of modern fashion outlets are available in this area. The period of the study is only 15 weeks which is started on first week of November. Freely accessed facilities such as online data collection, statistical analysing software such PSPP is available in order to conduct the dissertation. Moreover, contingency planning methods such as face to face questionnaire discussions are available to avoid the risk of any adverse effect. In addition, dummy variables will be used to analyze the identified modern fashion outlets names. Moreover, 12 supervisor meetings are conducted in order to get required advices and approvals. • • LXVIII CB004987 3. PURPOSE OF RESEARCH DISSERTATION Please offer a brief paragraph indicating: 1. 2. 3. 4. The aims and objectives of the research; Its rationale; The research question or specific hypotheses to be tested; The background to the research. The main objective of this research is to provide a broad insight in to the effective visual merchandising and its impact on consumer purchase intention and organization’s sales performance. Thus, the research question is identified as to evaluate the impact of effective visual merchandising on consumer purchasing intention, in order to increase the sales performance in Sri Lankan Fashion Retailing. Therefore, in order to carry out an effective research, three main objectives are identified. • To identify the modern effective visual merchandising trends in fashion retailing. • To establish the relationship between effective visual merchandising and consumer purchasing intention in fashion retailing. • To identify the importance of effective visual merchandising and its impact on organization’s sales performance in fashion retailing. The main reason for this study to be conducted is that the concept of visual merchandising is a neglected area in terms of Sri Lankan fashion retailing because they consider visual merchandising as a cost rather than considering it as an effective marketing tool. Moreover, Sri Lankan fashion retailers are more profit oriented and concerned about short-term results oriented marketing tools. Therefore, Visual merchandising can be identified as a significant area of study in terms of Sri Lankan fashion retailing. NB. It is not the job of the APIIT Research Ethics Committee to consider the methodology of the research. However this Committee does need assurance that the appropriate methodology has been properly considered before it can consider whether the research is ethically justifiable. LXIX CB004987 4. BRIEF OUTLINE OF RESEARCH Please offer a summary of the procedures it is proposed to follow in carrying out the research. Such descriptions might vary according to the nature of the research and the academic area involved, but they should normally include at least the following: 1. 2. 3. 4. The design of the research (including, where appropriate, issues of statistical power); The procedures to be followed; The participation of subjects in the research; How the design of the research and the procedures followed are likely to assess the research question or test the hypothesis in question or establish some significant result. The research is based on triangulation approach to provide an explanatory and exploratory descriptive type of study on effective VM and its impact on improving consumer purchase intention and organization’s sales performance. The research will be carried out only in Colombo city limits (Colombo 01-10) since most of the modern fashion outlets and consumers with high purchasing power available in this area. A quantitative approach is used to examine the relationship between effective Visual merchandising and consumer purchase intention. Therefore, an empirical survey will be conducted using a Questionnaire to test the developed hypothesis, which is designed using likert scale questions that ranged from (1) strongly disagree to (5) strongly agree to determine the relationship. A qualitative approach is used to determine the relationship between effective Visual merchandising and organization’s sales performance. Therefore, interviews, documentary reviews and questionnaire with open ended questions is utilized to determine the relationship. LXX CB004987 LXXI CB004987 5. RECRUITMENT OF SUBJECTS This section should contain clear information indicating the basis on which the proposed participating subjects are appropriate to the research. Normally researchers should adequately answer the following questions: 1. The number of subjects involved in the study (including the adequacy of the sample size) and how it is proposed to recruit them; 2. Whether there are any inclusion or exclusion criteria, together with their justification; 3. The age range of subjects; the gender balance of subjects; and the state of health of subjects; 4. Whether there is any inducement to participate in the study; 5. Whether the research involves any special groups requiring some additional justification or permission (e.g. whether subjects are especially vulnerable, i.e. children, students, the elderly, those with learning difficulties or mental health problems, those with some disadvantage or dependency, those in hospital or those in prison). The population for the study comprises of male and female consumers in Colombo city limits (Colombo 01-10) who are in between the age of 18-50 years, who have the purchasing power and usually shop in fashion outlets around Colombo city limits. Colombo is the most urbanized region which has 693, 000 populations and average monthly household income of Rs.50, 071 which are higher when compared with other regions (Department of Census and Statistics, 2014). In addition, Colombo city limits (Colombo 01-10) have 263, 105 population who are in between the age of 18-50 years. This research is conducted using “Simple random sampling” to improve the accuracy of the investigation while minimizing the misrepresentation risk The sample size of this research is 203 consumers from Colombo city limit (Colombo 01-10) aged between 18-50 with confidence level of 5% and marginal error of 5%. Furthermore, interviews and documentary review will be conducted with sales department employees of the fashion outlets to collect the data regarding sales performance. NB Researchers must also ascertain from their Supervisor whether or not they need to obtain Criminal Records Bureau clearance (or equivalent) to enable this research to proceed. If this is the case the application must make clear whether or not it has been LXXII CB004987 obtained. Any data collection or other activities requiring this clearance must not begin until it has been obtained. 6. PARTICIPATION OF SUBJECTS Research Participants Information Sheet Study Title: Sri Lankan Fashion Retailing: Using effective Visual Merchandising to improve consumer purchase intention Visual merchandising is one of the major marketing tools in fashion retailing industry since it is a customer based industry and attractiveness and ability to influence customers to purchase a product by communicating to their mindset is crucial. Thus, usage of effective visual merchandising elements to build an eye-catching store atmosphere will be a key competitive advantage for fashion retailers to improve customer purchasing intention while enhancing its sales performance. Therefore, an empirical survey will be conducted using a Questionnaire to test the developed hypothesis, which is designed using likert scale questions that ranged from (1) strongly disagree to (5) strongly agree to determine the relationship. A qualitative approach is used to determine the relationship between effective Visual merchandising and organization’s sales performance. Therefore, interviews, documentary reviews and questionnaire with open ended questions is utilized to determine the relationship. What is the purpose of the study? The main purpose of this research is to evaluate the impact of effective visual merchandising on consumer purchasing intention, in order to increase the sales performance in Sri Lankan Fashion Retailing. Do I have to take part? Your participation is voluntary. I would like you to consent to participate in this study as we believe that you can make an important contribution to the research. If you do not wish to participate you do not have to do anything in response to this request. What are the possible disadvantages and risk of taking part? All the information collected related to the questions about Visual merchandising will be kept confidential at all times and only researcher and supervisor will have access to the information you provide to me. Furthermore, all responses to our questions and information provided by you will be anonymous. What are the possible benefits of taking part? LXXIII CB004987 There will not be any personal benefits to your participation in this study, however the information you provide can contribute researcher to fulfill his/her undergraduate level academic requirements. What will happen to the results of the research study? All information provided by you will be stored anonymously on a computer with analysis of the information collected. What will be the expected results of the research? The expected result is to determine the impact on effective visual merchandising on consumer purchase intention and sales performance. Who is organizing the research? The research is conducted by the undergraduate student of APIIT University and the researcher is responsible if any harmful activity occurred. Name – D.G Kushan Ravindu Mobile – 0774209162 ……………………………… CONSENT TO PARTICIPATE IN RESEARCH Title of project: Sri Lankan Fashion Retailing: Using effective Visual Merchandising to improve consumer purchase intention I have been given and have understood an explanation of this research project. I have had an opportunity to ask questions and have them answered to my satisfaction. I understand that I may withdraw myself (or any information I have provided) from this project before 10th January 2016 without having to give reasons. I understand that any information I provide will be kept confidential to the researcher and the supervisor. I understand the published results will not use my name, and that no opinions will be attributed to me in any way that will identify me. Signature of the participant: ………………………………. Date: ……………………………………. LXXIV CB004987 7. INFORMATION AND DATA The application must contain a clear statement of what information will be collected about each subject, the data obtained as part of the procedures described in section 4, how it is proposed the data will be stored, how the data contributes to the research, together with a statement of how long it will be stored and how eventually discarded. Please offer answers to the following questions: 1. What information about the subject do you wish her or him to disclose to you in order for the research to commence? • Consumer satisfaction and interest regarding the store atmosphere • Consumer interest about store design (lightning, sound system, etc) • Factors concerned when making in-store purchasing decisions • Situational factors related to purchase decisions 2. What data will be gained about the subject in the various stages of the research? • First stage – factors related with consumer purchase intention • Second Stage - situational factors influencing purchase decision 3. What form does this data take (measurements, observations, audio/video tape recording)? • Measurements • Observation • Recordings 4. How will this data be stored (manually or electronically)? • Electronically 5. How is protection given to the subject (e.g. by being made anonymous through coding and with a subject identifier code being kept separately and securely)? The name of the participant will not be collected. Information provider will be an anonymous. 6. What assurance will be given to the subject about the confidentiality of this data and the security of its storage? The collected data will be only shared with the supervisor if it’s required and will be stored with the researcher. LXXV CB004987 7. Is assurance given to the subject that they cannot be identified from any publication or dissemination of the results of the research? Yes, Assurance is provided. 8. Who will have access to this data, and for what purposes? • Researcher and Supervisor • To determine the impact of effective Visual merchandising on consumer purchase intention and sales performance. 9. How is the data relevant to the research and the determination of its results? The data will be important to determine if there is relationship between effective VM and consumer purchase intention. 10. How will the data be stored, for how long, and how will it be discarded? The collected data will be stored in the researcher’s laptop for one year because in case if any problem occurred about the statistics. Afterwards, collected data will be deleted 8. RISK, HARM AND OTHER ETHICAL CONSIDERATIONS This final section invites an estimate by the researcher of the perceived benefits or outcomes of the research weighed against the possible harms caused to the participating subject. Please submit two brief paragraphs. The first should identify both [a] any potential risks or hazards that might be caused to subjects or the researcher, in addition to any discomfort, distress or inconvenience to them, together with any ethical problems or considerations that the researcher considers to be important or difficult in the proposed research; and [b] offer an explanation of how it is proposed to deal with them, along with any justificatory statements. The second paragraph provides an opportunity for the researcher to highlight any remaining ethical considerations and to respond to them in a way which may assist the Research Ethics Committee in arriving at some judgement upon the proposal. This second paragraph is not an invitation to take on the work of the Committee, but rather emphasizes the expectation that both researcher and Committee share the responsibility for assuring that the proposed research will be carried out ethically and with full regard to ethical principles. When conducting this research, the researcher will face potential risks such as being inconvenience to the customers by conducting questionnaire to them while they are shopping since customers are too busy and considered time and scarce resource. Therefore, it is proposed to conduct the questionnaire within the off-peak time slots. Moreover, it is proposed to send the questionnaires using the postal and online methods to be more convenience to the consumers. LXXVI CB004987 Furthermore, in order to avoid the distress which occurred due to the demographical information, questionnaire is designed using range/ categories such as age group, income range. In addition, it is proposed to use dummy variables as for the names of fashion outlets without publishing actual names. 9. SIGNATURES OF RELEVANT PERSONS I undertake to carry out the research described above in accordance with ethical principles. I have completed the application in good faith. I accept that providing false information constitutes scientific fraud and will be subject to appropriate disciplinary procedures. Signature of Researcher - ………………………………………. Date-…………….. I have examined this proposal; confirm that the rationale and methodology is appropriate and that it can proceed to the stage of ethical consideration. Signature of Supervisor or relevant Head of Unit-………………………. Date-……………... This research proposal has received ethical approval either by a supervisor on behalf of the Committee or has been considered by the Committee and received ethical approval. Signature of Chair of APIIT-……………………………… Research Ethics Committee LXXVII Date-……………... CB004987 LXXVIII