Thursday, February 11, 2016

Keep Fluffy Happy at Retail

“If Mama ain’t happy, ain’t nobody happy.” So goes the saying from America’s South, consistent with the much older guidance in Latin, “Pax matrum, ergo pax familiarum.”
     So what about, “If Fluffy ain’t happy, ain’t nobody happy”? Researchers at University of Helsinki, University of Gothenburg, University of Vaasa, and Aalto University found that seeking bliss for our household pets powerfully influences consumer behavior. Participants in their studies reported how choices of housing, vehicle, travel, and budget allocations were all shaped with Fluffy or Fido’s proclivities in mind.
     Retailers offering items for pets often verify an Eastern Washington University research finding: People are more willing to buy premium items for their pets than for themselves. About 80% of dog owners said they were serious about selecting healthy food for their dogs, but only 65% of the same people said they were serious about their own food selection. Many owners of dogs are as determined to maintain insurance on their pets as on themselves. Some time ago, sales of designer-label pet clothing and accessories began a growth spurt. More recently, dog massage services gained retail traction.
     University of Utah research attributes these trends to us considering our pets to be defenseless. It’s the same dynamic which helps explain why, during economic downturns, consumers cut back more on expenses for themselves than on expenses for their children. The research at University of Helsinki, et al adds to this the motivations arising from us wanting to pay back our pets for faithfully serving us. These animals provide companionship when we’re lonely, tactile comfort when nobody else wants a hug, an avenue for meeting others who have the same sort of pet we do or who agree the mutt is actually cute, a feeling of status if the breed is special, and a feeling of safety if the breed is big. Use these motivations as levers for retail sales to pet owners.
     Adults might not have as much splurge-spirit love for Henrietta the hamster as for Hank the family dog. Still, compared to owners of a cat or a dog, adults having fish or reptiles are more likely to also have kids around. Nearly 90% of households with a hamster include children. And for those children, there’s no question that Henrietta is worth a splurge. Just be sure you merchandise the indulgent items for those sorts of pets at the children’s in-aisle eye level.

For your profitability: Sell Well: What Really Moves Your Shoppers

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Fish for Broader Pet Market Profits
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Evolve the Most Basic Sales Pitches of All

Monday, February 8, 2016

Judge Coupon Campaigns by Objectives

A retailer might intend a discount coupon campaign to introduce shoppers to products, services, or categories. Or a retailer might issue coupons to draw in shoppers from other retailers on items the target audiences have commonly purchased in the past. Those are only two of the numerous possible objectives for a coupon campaign, but they are the ones looked at in a set of studies based at Universidad de La Sabana in Bogotá, Colombia and IESE Business School in Barcelona, Spain.
     The upshot of the studies was that the ways in coupons can build profitability depend on the type of campaign objective and on the nature of the item you’re discounting. Therefore, clarify your objective before you design the campaign, and then evaluate the success of the campaign in terms of that objective.
     The nature of the couponed item also makes a difference. In the Bogotá/Barcelona research, what made a difference in effectiveness included:
  • How often consumers purchase such items 
  • The number of alternatives 
  • The price range among the alternatives 
  • The frequency and regularity of discounts on the item 
  • The size of the discount 
     Other research identifies these additional factors:
  • The degree to which the consumer believes the coupon is customized for them. Researchers at University of Virginia found that a personalized coupon received unexpectedly is especially effective. 
  • How far in advance of the purchase decision the coupons are distributed. Researchers at MIT found that coupons presented at the store entrance drive up sales much more than do coupons available in the aisles of stores. Distribute coupons as early in the shopping process as possible. 
  • Conditions for coupon use. Those MIT researchers also found that when coupon redemption required the customer to spend more on an item than they’d planned to, the coupon redeemer increased the amount they were willing to spend on other items as well. 
     Slice-and-dice your campaign results by factors like these to untangle what’s really happening.
     In your analyses, also recognize profitability comes from those who notice, but don’t redeem, their coupons. Researchers at University of Virginia found that such consumers spent more in the stores issuing the coupons than did consumers not receiving the coupons. Because the large majority of people who receive coupons don’t redeem them, the sales lift caused by a coupon campaign comes mostly from the non-redeemers. There are many more of them, even if each spends only a little more.

For your profitability: Sell Well: What Really Moves Your Shoppers

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Add On the Value of Coupons As Ads
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Thursday, February 4, 2016

Close the Sale Close to the Source

Why is that purchasers of a limited edition production—let’s say a production run of 200 copies before the die is broken—will robustly prefer a lower serial number over a higher one—such as 5/200 over 197/200? Researchers at Yale University say an underappreciated reason has to do with what consumer psychologists call “contagious magic.” This discovery by the researchers is a reminder of the appeal of contagious magic for all sorts of retail sales, not only those of limited editions.
     Contagious magic refers to the belief—commonly encountered in consumers and usually subconscious—that two objects which have been in contact with each other will exert an influence on each other. In a study at Max Planck Institute for Biological Cybernetics, golfers who were told they were using a club previously held by a Professional Golfers’ Association Tour winner sunk a third more putts on average than an equivalent group not told this.
     A study at Arizona State University and New Zealand’s University of Auckland used musicians in place of duffers, guitars in place of putters, and supposed replicas in place of supposed actual possessions. Why is it, the researchers asked, that a purchaser of a guitar would find that having a respected rock star sign the guitar caused the guitar to produce better music? This was especially true when the guitar was a replica of the instrument used by the rock star autographing it. The answer: Contagious magic!
     In the Yale studies, lower serial numbers were subconsciously associated with greater closeness to the source, and consequently, catching more of the influence. It worked across item categories ranging from recorded music to fine art to apparel. It had little to do with the consumers’ beliefs about how well the item was made.
     Contagious magic isn’t always to the upside. Researchers at Yale University and Israel’s Bar-Ilan University asked study participants how much they’d like to own clothing and furniture which had previously been used by well-regarded celebrities, like George Clooney, and those with negative reputations, like Saddam Hussein.
     When the association was with a well-regarded name, the consumers felt they could absorb some remnants of the original owner. They said that if the item had been thoroughly cleaned, it was nowhere near as valuable to them. With the negatively regarded celebrities, however, the effect was reversed. Sterilization of the item before purchase was all to the good.

For your profitability: Sell Well: What Really Moves Your Shoppers

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Monday, February 1, 2016

Say, Are You Being Ethical?

Life is easier for small to midsize retail businesses that conduct themselves ethically. You’ve less concern about interference by regulatory agencies or about fighting legal actions a deep-pockets large retailer could afford to take on. You’re also better able to assume the mantle of a community-loyal enterprise, thereby strengthening your marketing position compared to those large retailers with their far-away headquarters.
     Research findings from University of North Carolina-Chapel Hill and Northwestern University suggest one simple way to both stimulate virtuous behavior in your store staff and say to your shoppers that you follow the rules: Include mottos of integrity in text on store documents. In one of the studies, exposure to the quote, “Success without honor is worse than fraud,” produced substantially more ethical behavior than did, “Success and luck go hand-in-hand.”
     Previously, researchers at University of North Carolina along with colleagues at Harvard University had found that adults behaved themselves better when in environments where childhood playthings—such as teddy bears and crayons—were around. In the study, participants carrying out business around the playthings lied less and were nicer to each other than those in surroundings lacking items associated with childhood. For instance, the frequency of cheating dropped almost 20%. Still other research finds that it’s not only reminders of the little kids, but also of oldsters that can encourage us to behave.
     Keep the cues subtle and light, though. You could put the mottos on sales receipts and post on the shop floor and in the break room some photos of kids, senior citizens, and playthings. If the cues are overbearing rather than subtle or come across as “holier than though,” staff and customers can easily come to feel they’re being manipulated and so ignore the message or react with the opposite of what we intend. Researchers at University of Miami, Hong Kong University of Science and Technology, and University of California-Berkeley found that happens with store slogans people are asked to think about closely. In the North Carolina/Northwestern studies, the participants who were affected couldn’t always even remember the motto they’d read.
     The effect of the sayings is not necessarily in changing the morality in people’s personality. It’s in reducing the probability that people will ask each other in the situation to commit improper acts. That’s plenty enough for a retailer to aim for, and it allows for the fuzzy nature of real-world retail ethics.

For your profitability: Sell Well: What Really Moves Your Shoppers

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Thursday, January 28, 2016

Single Out Cash Payment

People feel less pain paying by credit card than cash. They’re likely to purchase more and accept somewhat higher prices for items they desire.
     Still, Duke University and University of North Carolina-Chapel Hill researchers found certain sorts of value to retailers in that pain of cash payment, benefits which go beyond you avoiding the bank fee from credit card transactions: Shoppers who pay with cash instead of a credit card subsequently feel more emotionally connected to the item they purchase and to the store where they made the purchase. Their interest in alternative items and sources of supply decreases, so the potential for repeat purchases increases. And your cash customers are a little more likely than your credit card payers to recommend you to friends and family.
     One implication of all this is that when a customer has decided on a single purchase and, in your judgment, is unlikely to purchase more during that visit, encourage cash payment.
     The idea of a bit of pain leading to increased commitment by purchasers is not new in shopper psychology research. And in all of it, the issue is whether the pain is so substantial that it discourages the shopper from becoming a purchaser in the first place. Control for this and also for your own discomfort. Unlike with credit card transactions, cash payments often require you to give change. 
     Well, since it’s a dirty bother anyway, consider the advantages of doing it with dirty money. Actually, dirty money change hedges your bets in case you were wrong and the customer might make further purchases. Researchers at Canada’s University of Guelph and University of Winnipeg found that when people are given their change in bills looking worn out, the people want to get rid of the bills quickly. This is the perfect time for you, the retailer, to promptly offer the person another item to buy from you, before the worn-out bills get hidden in the wallet, purse, or pocket.
     To enhance the effect, give change for cash purchases using bills of varied denominations. Researchers at University of Iowa found that a shopper with a single $100 bill was less likely to make purchases than a shopper with five $20 bills. The increased bulk of five bills makes it subconsciously feel like greater wealth than a single bill does. More than this, consumers have a measurable resistance to breaking a large bill.

For your profitability: Sell Well: What Really Moves Your Shoppers

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