Crunching the Numbers: ROI Analysis for Endcap Displays

In today’s competitive retail landscape, every inch of shelf space matters—especially when it comes to endcap displays. If you’re wondering whether your premium placement is paying off, you’ve landed at the right spot. This guide walks you through a practical, numbers-first approach to calculate the Return on Investment (ROI) for your endcap display.

1. Dissecting Your Investment

Before diving into the calculations, let’s break down the key components of your endcap investment:

• Installation Fee: A one-time setup charge (which can also be a percentage of sales).
• Promotional Discount: Often, products on endcaps are offered at a discount to drive volume, affecting your revenue per unit.

Here are the essential variables:

• setup_fee — the retailer’s installation cost
• discount_rate — the discount given (expressed as a decimal)
• regular_price — your product’s usual price

2. Estimating the Sales Uplift

The next step is to assess the impact on sales. Historical performance is a great starting point. Tools like BrickBI provide detailed insights by tracking:

• Store Traffic: The number of potential buyers passing by
• Interest Shown: Shoppers who pick up your product
• Conversion Rates: The percentage of those who make a purchase

With or without BrickBI, you will need to know:

• baseline_units — comparable units sold before the promotion
• promo_units — units sold during the endcap campaign

3. Building the ROI Equation

Your ROI can be expressed by balancing the additional revenue generated against the investment made. The formula is:

Breaking Down the Components

1. Revenue During Promotion:

   $${\text{Revenue}}_{\text{promo}}=\text{promo\_units}\times \text{regular\_price}\times (1-\text{discount\_rate})$$

2. Baseline Revenue:

   $${\text{Revenue}}_{\text{baseline}}=\text{baseline\_units}\times \text{regular\_price}$$

3. Total Investment:

   $$\text{Investment}=\text{setup\_fee}+(\text{promo\_units}\times \text{regular\_price}\times \text{discount\_rate})$$

4. A Real-World Example

Let's walk through a real-world example to show you how it works:

Step-by-Step Calculation

1. Promo Revenue:

   $$\begin{array}{rl}{\text{Revenue}}_{\text{promo}}& =300\times \$15\times (1-0.10)\\ & =\$4,050\end{array}$$

2. Baseline Revenue:

   $$\begin{array}{rl}{\text{Revenue}}_{\text{baseline}}& =150\times \$15\\ & =\$2,250\end{array}$$

3. Total Investment:

   $$\begin{array}{rl}\text{Investment}& =\$1,000+(300\times \$15\times 0.10)\\ & =\$1,000+\$450\\ & =\$1,450\end{array}$$

4. Calculating ROI:

   $$\begin{array}{rl}\text{Incremental Revenue}& =\$4,050-\$2,250=\$1,800\\ \text{Net Profit}& =\$1,800-\$1,450=\$350\\ \text{ROI}& =\left(\frac{\$350}{\$1,450}\right)\times 100\%\approx 24.1\%\end{array}$$

This means your endcap display delivered a 24.1% ROI, proving the investment generated a tangible profit above its costs.

5. Turning Insights into Action

Numbers tell a compelling story—but actionable insights drive success. With BrickBI’s comprehensive analytics, you can:

• Monitor In-Store Behavior: Track impression and conversion trends.
• Optimize Promotional Strategies: Adjust discounts and product placements based on performance.
• Maximize Profitability: Leverage data to fine-tune every element of your in-store marketing strategy.