Visual Merchandising Strategy in Online Retail VS Offline

Retail to Build Consumer Preferences to Buy

Amalia Nurhidayati

Bandung Institute of Technology, Ganesa No.10, Lb. Siliwangi, Coblong, Bandung

40132
E-mail: amalia.nyt@gmail.com

Abstract. COVID-19 changed various aspects in the retail industry. Many retails
had to shut down during this pandemic. Online furniture retail has begun to see
new behavioral shifts in shopping habits, which changes over the past year show
signs of growing. To survive in the middle of the competition, furniture retailers
need a proper marketing strategy. One of them is through a visual merchandising
strategy. The purpose of this research is to find the the difference Visual
Merchandising strategy between physical and online retail on consumer
preference to buy the products at IKEA, Dekoruma. Many reasons motivate people
to buy products after seeing the display. Some buy products for basic needs, and
some for self-actualization. The methods: using a mixed-method with 3 variables
to be studied, visual merchandising online strategy, visual merchandising offline
strategy, and consumer preference. A survey of 104 retail customers in
Jabodetabek will be developed to conduct this study. The result of this study is to
provide a comprehensive insight into visual merchandising strategies in online and
physical retail that are affecting the consumer motivation.

Keywords: Visual Merchandising, Consumer Preference, Furniture Retail, Product

Presentation

1 Introduction
The growth of the retail sector impact increasing the number of stores that
have sprung up and become competitors for both online and offline retail.
Under these conditions, retailers have to change their strategy to increase
market competition. An interior design strategy that has its characteristics,
is comfortable, but still functional, and supports a shopping atmosphere
can be an advantage over other stores. However, there are different
applications in online and physical retail, visual merchandising techniques
play a role in building an online and physical retail atmosphere so that
visitors are interested in buying furniture products/interior design services.
Visual merchandising covers the entire store environment including
merchandise presentation, store design and images, lighting, graphics, and
other things that affect the sale of a product and the image of a retail store.
Based on tracking similar web, 2021 There has been a decrease in the
number of visitors in the first quarter of 2021 in two online retails, IKEA
and Dekoruma. In addition, many consumers feel disappointed with their
product purchases because the displayed on the web are different from the
original product. During the pandemic, there was a change in the life-cycle
of consumers who were more likely to buy furniture and design services
online through e-commerce. Therefore, this research is trying to study the
phenomenon of differences in visual merchandising strategies in online
and offline retail to build consumer preferences to buy.
2 Methodology
This study uses a mix-method approach, emphasizing qualitative but
assessing quantitative data. This approach focuses on building theory from
the results of synthesis data. Variables used are consumer preference, as
the dependent variable, and visual merchandising, as the independent
variable. The primary data through interviews and distributing
questionnaires to visitors who open the IKEA, Dekoruma website and
application. The secondary data was taken through publications, research,
journals, and web data processing. The sample size in this study refers to
the Slovin formula with a power value (zα) based on table Z of 1.96, value
of (P) 0.5, and Q (1-P) of 0.5, an accuracy rate (d) of 10% resulting in 96
respondents in this study. The sampling technique in this study is
convenience sampling. This technique easy to reach, randomly sampling,
meets certain criteria. In this study, the population studied was
Jabodetabek consumers who had visited online and offline retail (Ikea,
Dekoruma). The sample can be classified by gender, age, occupation, and
monthly income.

Tabel I Variabel penelitian

3 Findings and Result

3.1 Physical Retail
Physical retail data collection is done by interview and observation. This
interview was conducted in person in February – March 2021 by visiting
physical retailers IKEA and Dekoruma Bandung. In physical retail,
researchers interviewed IKEA consumers, Dekoruma waiters, and
Dekoruma visual merchandisers.
Subjek yang
Kategori Hasil Wawancara
diwawancara
Consumer Emosi konsumen
• When entering retail, he was confused
Maria Elizabeth (25 saat mengunjungi
about which way to go, because of
th) visited IKEA retail
the many items on display, and whe
Bandung Consumer emotions
turned to the right
when visited retail
• Feeling happy when he saw the
aesthetic office chair “Mullfjalet”, on
display complete with his study desk
and he liked it
• He finds it difficult to memorize the
location of furniture that he has
seen before. He bought a shelf for the
living room
Consumer Physical furniture is different from being
motivation photographed, according to him, by
going to the store, he can feel the material
 of the furniture (good quality). He just
wanted to look at IKEA products, he
didn't want to buy them.
According to him, the price of furniture at
IKEA is quite expensive, there are still
many marketplaces that sell cheaper goods
Price According to him, the price of furniture at
IKEA is quite expensive, there are still
many marketplaces that sell cheaper goods
Dekoruma Waiter Retail Informetion
• The arrangement of “inspirasi ruang”
Mas Tino (25 th),
furniture is on the 1st and 2nd floors of
Dekoruma Dago
DEC (Dkoruma Experience Center)
Bandung retail waiter
Dago Bandung. Visitors per day can
reach 50 people
• Dekoruma showroom does not serve
furniture purchases directly, but must
be ordered through the website and
sent from Tangerang
• Dekoruma Dago achieved the most
sales, which is 120% since it opened in
January 2022
Visual Styling
• Due to the small retail area, to
Merchandiser
maximize the space, not all displays
Dekoruma
use the concept of space inspiration
Tracy Amanda,
(bundled presentation), but only a
Jakarta Barat
single presentation
Product
• Customers prefer to see promo
products at the very front. This makes
physical retailers need a lot of banners
to focus on promotions
 1. IKEA categorizes displays in showrooms by persona, activity and
interior theme. For example, family togetherness, this display
communicates about a family room, work area, and dining area
can be integrated with open space
2. The IKEA layout is made quite complicated (labyrinth) as an

Figure 1 IKEA interior showroom

“attempt” to increase the perception of value will solve the maze.

Shoppers will walk through the IKEA "showroom area" (50+
shades of interior space) After traveling 1km+, they will pick up
furniture in the "market hall". Subconsciously, buying goods is a
reward for all the distance the buyer has traveled. Like the casino,
IKEA's showroom and market hall have no windows. Shoppers
lose their sense of time and space, so stay focused on shopping.

3.2 Online Retail

These are some conclusions from respondent regarding online retail :

1. As many as 27% of respondents, gave negative sentiments about

online retail, related to the expectations that were built and doubts
about the quality of the goods. Then below is the data from the
identification of the topic of what the respondents talked about.
2. Respondents felt that, by just looking at the IKEA and Dekoruma
websites, they were tempted and wanted to checkout. As many as
60 people out of 104 people who have been surveyed agree on
this. There are 7 people who feel doubtful and not interested in
 checkout, this is because they are still weighing what kind of
items
3. Respondents considered the website as a reference only, buying
furniture at a physical store. A total of 70 respondents agreed with
this. However, 34 respondents did not agree with this, they first
saw the quality of the existing goods, if they were good, they
would directly buy through the website.

4 Discussion
4.1 Visual Merchandising strategy in physical retail
There’s difference between interior styling techniques at Dekoruma and
IKEA physical retail. The difference found in tertiary element as a display
support. Tertiary elements are products that function as decoration, with
the aim of enlivening the arrangement of furniture. Tertiary elements
include pillows, blankets, plants, vases, books, baskets, frames. The
following is the arrangement of primary, secondary, tertiary elements in
the living room display.

Figure 2 Primary, secondary, tertiary elements in Dekoruma

The tertiary elements of IKEA physical retail are very well structured
compared to the photo styling content of its online retail. This is because
IKEA physical retail is the main business focus compared to online retail.
IKEA maximizes physical retail with its restaurant, market hall, showroom
and FnB tenant facilities. In addition, IKEA physical retail was established
in 2014, earlier than online retail (website and application). This results in
the arrangement of furniture in physical retail being more organized in
detail and mature. The following is an illustration of the difference
between photos in online retail and real goods in physical retail. In online
retail, Trotten tables are presented without tertiary/decorate elements, even
just a table mockup. Meanwhile, in IKEA physical retail, the use of the
Troten table is maximized. There are tablet stands, books, vases, study
lights, file storage on the table. This brings Trotten table displays to life
and gives an idea of the size of a table that can fit so many products.

Figure 3 tertiary elements in IKEA

At Dekoruma Radio Dalam physical retail, Kumo Sofa is only displayed

on a sofa rack that is arranged with other sofas. The condition is low light
and is in the area below. This is because the Dekoruma retail area is not
large, to maximize the land, the displays that are arranged do not all use
the concept of space inspiration (bundled presentation). The existence of
high operational costs to buy tertiary products as decoration is one of the
hypotheses why displays in physical retail are not good. In addition, it is
influenced by marketing strategy: Only expensive sofas (> IDR 5,000,000)
are displayed with a livingroom atmosphere in physical retail. Cheap price
sofa (< IDR 5,000,000) in simple display. Whereas in online retail,
products with low prices and best selling are kept at the top to attract
visitors.

4.2 Visual Merchandising strategy in online retail

online merchandising visual styling technique focuses on the proportion
of 60,30,10; shape and size; balance ; use of tertiary elements. This is
confirmed by Dekoruma's internal observation data. Balance on a display
is a visual equalization or balance between sides. Balance is affected by
size, color, texture, amount, space. The following is an example of the
balance that Dekoruma applies to its online retail content.
The next online visual merchandising technique is frame composition.
This is a composition setting (positioning position in display styling).
Dekoruma applies a composition technique, namely by arranging the
background, foreground, and middle ground correctly. The background is
arranged in a cut and minimal color to highlight the product. The
foreground is shown halfway and not too clear, aiming to focus on product
highlights. Middle ground is the position of the main furniture that takes
the largest portion. The composition of the product must take up the largest
space of a frame so that the product is more visible to consumers. This
product is large-sized furniture, such as sofas, cabinets, tables, chairs. By
paying attention to this composition, the content presented will attract
visitors.
Furthermore, based on the results of a survey of respondents, it is stated
that consumers use the website as a reference only, buying furniture with
large sizes can directly visit physical retailers. As many as 67% of 104
people agree with this, because consumers are hesitant to buy furniture at
high prices through websites or applications. By coming directly to
physical retail, consumers can ask directly to the waiter and see firsthand
the goods.
The next conclusion, based on the results of observations, the technique of
product preparation on the website is influenced by the price and quantity
purchased the most. This can be seen on the Dekoruma website, the price
of furniture that is low and the most purchased will appear at the top. This
is an online marketing strategy to increase traffic and sales. The more
people who click on the product will lead to checkout, so this compilation
strategy is carried out.
4.3 Consumer Preferences
There is a comparison of respondents' preferences in choosing online retail
between IKEA, Dekoruma. 66.7% of respondents tend to choose IKEA to
shop online, this is because IKEA is familiar among millennials and the
IKEA branding has been around for a long time. This is in line with online
retail visitor data (similliarweb, 2021), IKEA occupies the highest position
among the others, namely 3.14 million visitors within 6 months. Followed
by Dekoruma as many as 2.05 million visitors.
Most consumers consider online retail as a product reference, but buy
furniture at physical retail. As many as 67% of respondents agree on this.
The reason is so that consumers can see the original new goods to
determine the choice to buy. There are two consumers who usually look at
the web for reference, then go to the store to check materials and quality,
but still buy online. In addition, as many as 21 respondents out of 104, do
not agree with this if the pandemic conditions are rising. They refuse to
leave the house.
Based on the results of a survey of 104 respondents, the responses that
respondents think about shopping at online retail are expectations, quality,
safety, price, and practicality. Expectation is the response with the highest
negative sentiment. There are 20 negative sentiments out of a total of 33
regarding expectations. There is a thought that the shape of the goods on
the website is different from the original goods. In addition, there is
consumer distrust of prices, durability, defects/conditions of goods.
5 Conslusion
Online Visual Merchandising techniques are effective for attracting
consumers, but not to the point of creating conversions. Visual
Merchandising strategy online is different from offline, namely there is a
game to prioritize commodities (visitors coming to physical stores are
faced with tertiary elements)
In online retail, consumers have a tendency to buy (consider
buying). They just look around, choose product options (do not buy
immediately).
Whereas in physical retail, consumers have a tendency to actually
buy (buy directly), because they are faced directly with genuine goods.
They will buy what they see if they have an interest.
From the retailer's perspective, online and offline VM strategies are
profitable for businesses. Meanwhile, from the consumer side, the VM
strategy deceives consumers because it prioritizes tertiary elements
(decorations, vases, plants). The final conclusion is that the online &
offline Visual Merchandising strategy has succeeded in increasing the
taste and level of consumer preference for a product.
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