Thursday, July 2, 2015

Present the Present as Full of Options

“The future is full of options because both dice are still in our hands. The present is highly constrained because the die has been cast.”
     That’s my description of the mindset used by marketing researcher Ji Hoon Jhang to explain a puzzling instance of consumer behavior he observed: On an overbooked Southwest Airlines flight, a pair of travelers declined an offer to leave on a flight one hour later. The reward would be two vouchers that could be used subsequently to fly anywhere in the Southwest network.
     Did the pair decline because they had a connecting flight or another commitment that couldn’t wait an hour? No. On the contrary, the pair still hadn’t decided how they’d spend their time immediately after arriving at their destination.
     For a study inspired by this episode Dr. Jhang collaborated with John G. Lynch Jr. to verify how and why consumers resist being interrupted when they perceive they are close to completion of a task. At an airport, people were asked to respond to a one-minute survey about how much spare time they believed they had prior to flight departure, after the arrival of their flight, and in the evening three weeks hence. Some were asked while at their gate waiting to board the plane. Others were asked while waiting to board the shuttle train to travel toward the gate.
     Those waiting for the train were less likely to agree to complete the one-minute survey, and those waiting for the train who did agree to do the survey reported themselves as having less spare time than did those who answered while waiting at the gate. This was in spite of the fact that those waiting for the train actually had more spare time until flight departure. For them, the proximal goal was getting onto the train, and they did not want to be interrupted.
     In the retail store setting, most consumers are more open to interruptions early in the purchase process and less open later, as they feel close to completion. Psychologists use the term “Zeigarnik Effect” to refer to the mental itch we feel when a task is in limbo.
     If it is to the benefit of your shopper, scratch that itch by helping the shopper see they still have options open. Convince the shopper that although the die may have been cast, there is probably one more die still in their hand.

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

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Monday, June 29, 2015

Bulk Up on Chunky Outliers

Statistical outliers are data points that don’t fit in with the majority patterns. It might be the group of consumers in a National Retail Federation survey who say they purchase gifts well in advance of need. Or it could be the shoppers in a sporting goods trade publication report who say they’re having trouble finding lacrosse equipment. When that group is statistically chunky—the frequency is high enough, even if not large—it could be a niche market for the small to midsize business, and targeting to a niche is how many such businesses thrive when competing against larger ones.
     Be sure your niche is defined by what shoppers want. That sounds obvious, and it is. Still, I’ve seen retailers fail because they choose as their niche something they enjoy doing, failing to sufficiently attend to the preferences of their target populations.
     Update your niches whenever necessary. Consumers are drifting from the general to the specific, from the one-size-fits-all to the specialty and the customized. In introducing niches, reach out with a line extension and then pull in and eliminate your weaker lines. Avoid abrupt changes in your merchandise mix unless one of your niches is itself defined as always having something new for the customer to consider, as Grocery Outlet and Cost Plus World Market do.
     To bring what you love to offer your marketplace closer to what the marketplace wants, cultivate the desire for the niches. Show customers what you think they should be hungry for, then evaluate how thoroughly they buy your pitch and your products. As you do this well, you’ll be creating your own chunky outliers.
     If you’re looking for chunky outliers in data sets compiled by others, be sure to explore what’s behind the numbers. One of my favorite examples of the reason for this comes from a BloombergBusiness article that said Deutsche Lufthansa AG’s Frankfurt airline facility transported 110 million animals in one year. This was more than the 106 million people carried by all Lufthansa units together during the same period.
     Is the airline primarily an animal freight company? Not really. Of the 110 million, 80 million were tropical fish. That leaves dogs, cats, and race horses. Yet less than 2% of Lufthansa’s total cargo revenue comes from transporting the creatures, and cargo revenue is but a part of the airline’s total. 
     Lufthansa can accurately say they’re primarily a passenger carrier.

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

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Thursday, June 25, 2015

Sensitize to Waste for Abnormal Produce

Historically, stores selling fruits and vegetables would prune out or send to the bargain basement unusually shaped produce. In the 1930’s, California orange packinghouses created special designations for fruit that was small or off-color. The lower-grade items had labels with names like Mutt and Camouflage. Still, the growers wanted to help retailers sell the fruit rather than having it put to waste. So taglines were developed: “The Quality is Inside.” “Not much for looks, but ripe, sweet, & juicy.”
     Now California farmers, who are a major supplier of fruits and vegetables to retailers throughout America and beyond, are finding it more challenging to select out oddly shaped items. Because of the severe drought in the state, crop yields may drop. There’s absolutely no taste for waste. At the same time, having less water for irrigation can affect the appearance of the produce.
     Results from a research project at Denmark’s Aarhus University suggest a way to increase retail sales of abnormally shaped food items: Sensitize shoppers to the importance of fully using what’s available.
     In the project, a sample of 964 people were chosen to be representative of produce consumers. Each member of the sample was asked to state their purchase intentions for two fruits and two vegetables with varying levels of shape abnormality.
     No significant differences were found in purchase intention between familiarly shaped items and items with moderately abnormal shapes. However, produce with a markedly abnormal shape was less likely to be purchased, according to what the sample consumers said. This effect was much less, though, among the consumers who were concerned about food waste in modern society.
     Beyond produce itself, abnormally shaped packages can cut into buying intentions. Researchers at University of Georgia and University of Pennsylvania asked consumers to evaluate packages designed to look incomplete. The result of this was a belief among the consumers that the package held a lower quantity compared to packages of equivalent size and weight, but without blanks in the design. It’s as if the missing portion generated feelings in the consumer that part of the contents had leaked out, leaving less behind.
     Importantly, research at University of Southern California finds that an unusually shaped container attracts attention, which can increase sales. So, coming back to the veggies, you might be able to turn around turnip concerns. Just point out how that misshapen veggie looks exactly like the Virgin Mary praying.

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

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Monday, June 22, 2015

Encourage Category Consistency Time-to-Time

It can be handy for a retailer to have repeat customers with consistent purchase habits. When those sorts of customers come into your store, you earn good will by promptly pointing them toward the sorts of items they’ve bought in the past. You know what special offers will entice them. You could build your inventory around items your consistent purchasers like.
     Researchers at University of Pennsylvania, Duke University, National University of Singapore, Singapore Management University, and ESADE in Spain find that consistent purchase habits are a matter of time. That is, compared to shoppers who think about the money involved while making a purchase, those shoppers who think about the time involved are more likely to select the same sorts of items in the future. They’re also more likely to keep making purchase decisions in the same ways. This is useful to know when you’re introducing a new item to the shopper. You can predict how they’ll go about evaluating it.
     The implication of the research findings is that to build consistent purchase habits in your customers, talk with them about the time it will take to select what fits them best, the time you recommend they reserve to learn how to use the item, and for about how long they can expect the item to keep working for them.
     The researchers say that such talk of time causes the shopper to decide based on emotions, since time considerations are difficult to analyze objectively. Lots of other consumer behavior research has shown that decisions based on emotions are both more consistent and more satisfying. In contrast, thinking about the financial aspects, such as the price or the credit terms, leads to analytical reasoning, which causes more variance from one shopping trip to the next.
     Added by research findings from University of South Australia and Mondelez International is that consistency is more likely at the item category level than at the brand level. The study looked at the purchase habits for a selection of 139 brands from fifteen packaged goods categories by the same 15,000 United Kingdom households from one year to the next. About two-thirds of these households showed category consistency, while only about half of the households showed brand consistency.
     Aiming for category consistency rather than brand consistency is good for the retailer. Shoppers seek a certain amount of variety, and you’d prefer they change brands than change stores.

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

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Thursday, June 18, 2015

Are the Artifacts Selling the Mood?

Applebee’s restaurants hang all sorts of conversation starters on the walls. Cracker Barrel restaurants position board games around for customers to play. Central to the d├ęcor at Bass Pro Shop and Scheels stores are mounted wildlife heads. The memorable “Come to China” event at Bloomingdale’s included an entire Cantonese farmhouse at the flagship Manhattan store and rare Chinese decorative items at others.
     How might you best use artifacts placed throughout your store to reinforce your business image? Help in answering that question comes from, of all places, a museum exhibition in Thessaloniki, Greece. It was there that researchers from California State University-Stanislaus studied the effects on visitors of objects in an exhibition of Byzantine heritage.
     Those effects can be assigned to three categories:
  • Physically drawing the consumer in. Objects which are visually interesting or cry out to be touched guide the consumer’s path of inquiry. 
  • Conceptually drawing the consumer in. Entering the area, the visitor has preconceptions about what will be experienced. Then when the visitor encounters each of the objects, those preconceptions stimulate the visitor to create stories which add interest, making it more likely the visitor will stay for a while, tell others about the place, and choose to return in the future. 
  • Substantiating. The right artifacts give substance to the moods the visitor is experiencing, meaning that impressions of the site are trusted more. In this process, the consumer is likely to incorporate what they’re feeling and what they believe others around them at the time are experiencing. 
     With these three in mind, select and position artifacts in your store to facilitate sales. Choose items which are consistent with other impressions you want to give the shoppers. Place appealing objects in areas of the store you want shoppers to explore. At least occasionally feature pictures of the artifacts on store signage and in ads.
     Certainly, the ways in which artifacts influence consumers are different in a museum than in a retail store. In the museum, people have come specifically to interact with the objects, while in the store, the artifacts are incidental to the purpose of the shopping trip. The effects in the store are more nuanced.
     Then again, there are some similarities in the functioning. Most museums have gift shops where replicas and images of exhibited items are sold. Involving the consumers in processing their perceptions sells not only the mood, but also the merchandise.

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

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