As organized retail evolved and came into its own in India, visual merchandising (VM) parallelly came to be recognised as an important factor in driving shopper engagement in-store, while contributing to sales. VM thus has certainly moved to the forefront of retail conversations. Yet, when it comes to budgets, it still faces constraints. “The fundamental problem is that VM is seen as an expense, not as an investment,” says Avanish Saroj, VM Head at Hamleys, as he shares his insights on the evolving nature of VM in this conversation with Retail4Growth. “If marketing over-spends, then nothing is left for VM. People don’t realise that VM is what drives conversions inside the store. Until that mentality changes, budgets will remain tight,” he adds.

Why does VM get sidelined?

Unlike marketing, which gets dedicated budgets during the Annual Operating Plan (AOP), VM does not yet enjoy its own allocation. “If marketing can have a defined percentage, VM should too,” Avanish points out. “Otherwise, we won’t be able to do any installations or creative work. But it may take some more time for the importance of VM to be recognised.” 

Can budgets go up with tech?

Avanish however is hopeful that VM budgets will rise in the coming years, though for a different reason. As he says, “AI is reducing creative and production costs in marketing. As those expenses come down, the savings can be redirected to VM.

But tech-enabled solutions like digital screens and shelf labels, while being promising, are still seen as being expensive. They also come with their own challenges, especially when it comes to scaling them across multiple stores. “New stores are being planned with tech-enabled screens, while big-ticket bets like full digital shelf labels remain under review, given the complexity of managing thousands of unique SKUs per store,” explains Avanish.

Also, while AI has come to be seen as a big disrupter, how will it impact the creative aspects of VM? Avanish is quick to dismiss the idea that AI could replace human creativity. He reflects on how AI has disrupted retail marketing and VM workflows. “AI is a tool made by humans. It can speed up research and reduce turnaround times, but logical thinking and contextual creativity will always need human intervention,” he says. AI, in fact, frees up people to focus more on creative and engaging concepts. As Avanish points out, “Earlier, for a marketing post, you needed five people – a copywriter, designer, strategist, and so on. Now, all that has merged into one role, thanks to AI tools.” Also, idea generation, which once used to be a big challenge, is no longer a bottleneck. 

The way forward

Well, with AI driven tech bringing intangible costs down and playing an enabling role, is VM headed for a better future? According to Avanish, the answer lies in engagement. “We’re entering an era where smart ideas will matter more than big spends. If we keep engagement at the core, VM will continue to play a strong role in retail.”

Engagement would also be a highlight for Hamleys as it continues to expand across different cities, including tier-2 and tier-3 markets. The brand is targeting a footprint of 52 stores by the end of the financial year, informs Avanish. He sums up on an optimistic note, while driving home his point, “Engagement is the key and everything else follows.”