New Balance planned a revamp of their factory outlets throughout Australia. The changes included a refreshed shop layout, removing all older products from the shelves and navigating customers towards new stock using deals and mingling merchandise.
Before rolling out nationally, New Balance needed to understand how customers would react to the revamp and how it would affect their in-store experience. Outlet revamps are costly, time-consuming and disruptive to a retailer’s normal business operations, and can result in a loss in revenue if customers don’t like the changes.
The issue for New Balance was that they didn’t have a real way of measuring the effectiveness of the layout. The retailer lacked confidence in historic measures such as customer exit surveys as they felt they wouldn’t give them insight into the true impact on both customer experience and how it affected the bottom line.
Utilizing a “test-and-control” method over a 4-week period, New Balance ran a trial of the refreshed designs while using TruRating to collect feedback and transaction data on the impact of the revamp on customers. We were able to establish a baseline of scores in the weeks prior to the changes being introduced, and how scores performed once the changes were in place.
Using the data collected before and after the trial period, New Balance was able to effectively determine if the revamp was a success and how it would impact the revenue of the wider portfolio were it to be rolled out nationally.
How did the retailer assess the impact of the revamp on customers?
New Balance used one outlet as the test store and the remaining outlets across Australia as their control stores. The test outlet would be compared to the control outlets pre-implementation and for the weeks following the new layout implementation to determine the impact on customer sentiment. With over 25,000 pieces of customer feedback collected during the 4-week trial, the retailer had a significant amount of data to make an informed decision whether to proceed with the new outlet design rollout.
Over the four-week period, scores in the South Wharf, Melbourne CBD test outlet didn’t seem to improve much, however, when compared to the control group, we uncovered some very interesting results. During the trial period, scores went down across the board in all 13 control outlets, likely due to macro forces reflective of the retail industry as a whole, at that point in time.
At first glance in the South Wharf outlet, results didn’t seem to make any improvements but since a test-and-control approach was in place, when we delved into individual metrics we found various improvements (refer to graph above) which stood out at the outlet compared to other 13 outlets. Comparing South Wharf against the control outlets, it became more evident the new layout was warmly received by customers and being able to compare the scores during the same time period, in the test and control group, meant we were able to categorically align the score and spend improvements to the new outlet design at South Wharf.
These improvements confirm the revamp enhanced the overall customer experience and more significantly for the company’s bottom line, their Average Transaction Value (ATV). Below, you can see these improvements were isolated to the revamped outlet and were not replicated at any of the retailer’s other 13 outlets during all periods of the trial. What’s very noteworthy is the other outlets experienced a decline in their overall rating, but the revamped outlet offered customers a completely different shopping experience.
There was an issue with ATV falling across the retailer’s entire Australian estate, again, the revamped outlet differed and ATV fell at a slower rate of 2.52% compared to all other outlets at 3.43%. See below:
How did New Balance use the results?
With thousands of pieces of data from their customers through TruRating there was no doubt the South Wharf test store proved the revamp resulted in a superior experience, service and the dramatic improvement in customers view of New Balances value for money offered.
With a combination of TruRating and internal sales data, the retailer was able to confidently roll out the revamp in March this year across all of their other outlets in Australia, knowing the positive impact the refresh will have on customer experience and their bottom line.
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