Monday, September 15, 2014

Number the Attractions for Attraction Effects

To unfreeze a shopper’s indecisiveness when choosing between two alternatives, you can introduce a third alternative which is clearly similar to one of the others on an attribute important to the shopper and also clearly inferior on another attribute important to the shopper.
     For example, suppose a customer wanting to purchase an electric lawn mower tells you she can’t decide between the one that’s more powerful on hills and the one that’s cordless. You now know two attributes important to this shopper. You’ve also noticed she says she doesn’t have lots of space in which to store a mower. So to unfreeze her decision making, you show her a corded mower which is powerful on hills, but is wider than either of the other two. As a result, she selects the one that’s powerful on hills, but is more narrow.
     Consumer psychologists call this phenomenon the “decoy effect” or “attraction effect.” Studies have verified that the attraction effect operates with consumers choosing among microwave ovens, television sets, cars, apartments, beers, airline tickets, and even political candidates.
     According to Yale University and National University of Singapore researchers, the power of the attraction effect depends on how attributes are presented to the consumer. It works best when the salesperson describes the attributes using numbers, such as a toaster oven with a durability rating of 7 and ease-of-cleaning rating of 5, both on a 10-point scale. It works least well when the consumer actually tries out using the alternatives.
     With the toaster oven, the shopper for whom ease of cleaning is important probably won’t have a chance to actually experience this at the store, so the attraction effect should be at its best. But for that lawn mower shopper for whom ease of storage is important, she can experience the width right there in the store, so the attraction effect would be weaker.
     The attraction effect is likely to be strongest with experience and post-experience goods and weakest with search goods.
     Search goods have features, the value of which can be relatively easily assessed before purchase. A refrigerator and a car are search goods.
     The values of experience goods are more difficult for the shopper to assess until they’ve been used. An insurance policy or unfamiliar food is an experience good.
     Vitamin pills and investment portfolios are examples of post-experience goods, where it’s hard to accurately evaluate the advantages even after use.

Click below for more: 
Decoy the Indecisive Without Getting Decoyed 
Post Dramatic Tales for Post-Experience Goods

Monday, September 8, 2014

Impress from the First

Shoppers are greatly influenced by what happens early on. First impressions set the scene. This is true to some extent for all consumers and, for people shopping in a group, the initial sights, sounds, and smells have a greater effect on the probability of return visits than do the experiences when paying for their purchases, exiting the store, or finding the car in the parking lot.
     First impressions have such a lasting impact that even if your store is remodeled, greater sales increases occur for new customers’ initial visits than for those customers who were accustomed to shopping with you before the remodeling. Researchers at Monash University assessed the trends in store visit frequency and spend-per-visit in a set of stores that had undergone major remodeling and a set of similar stores that had not. They found that for both new and existing customers, the remodeling increased sales revenues. Yes, renewed first impressions did stimulate the old customers. However, over the subsequent year, the returns were greater for the new than for the existing customers in the remodeled stores.
     In one of these stores, the researchers measured the customers’ psychological responses to the remodeling. New customers had a greater draw to the store than did existing customers because the visit was for the new customers, more of an opportunity to develop first impressions.
     Retail staff may fail to recognize that how each of them interacts with the shopper influences how the shopper interprets the interactions with staff they encounter next. Let’s say a sales clerk looks up at the approaching shopper and smiles gently. If that event had been preceded by a sincere greeting from the cashier as the shopper entered the store, the shopper is likely to consider the salesperson’s smile to be sincere and welcoming. This is less likely if the shopper had received no more than a cold stare from the cashier when entering the store.
     But if the first impressions are not as positive as you’d like, you could be able to rescue the situation, according to research findings at Washington University in St. Louis, University of California-San Diego, and University of Florida. They found that later experiences can be made to seem like firsts for a consumer. In one of their studies, an online review which came late in the sequence gained greater impact when presented as “the first review of the new year.”

Click below for more: 
Track the Trajectory of In-Store Impressions
Stress the Impact of Spreading Impressions
Lead Your Customers Through Changes Gradually

Monday, September 1, 2014

Appeal to Nostalgia

Nostalgia appeals loosen the consumer’s purse strings.
     Researchers at University of Minnesota, University of Southampton, and Grenoble École de Management asked each study participant in one group, selected at random, to think about their past. The remaining study participants were asked to think about recent or future events. Then each study participant was asked how much they’d pay for a set of items which were described by the experimenters. The group who’d been asked to think about their personal past came in with higher bids overall.
     In other studies by the researchers, activating nostalgic thoughts resulted in a higher willingness to spend money to stop an annoying noise and to donate money to others.
     Consumer behavior experts from Arizona State University and Erasmus University in the Netherlands conclude that when adults are feeling lonely, they become more interested in nostalgia.
      Study participants played a ball-tossing game on a computer. The game was rigged so that some participants were told they’d been eliminated. Dropped participants were more likely to say that belonging is important to them. And they also made more consumer choices which reminded them of their personal history. This included preferences in cars, food brands, TV shows, movies, and shower soap.
     “New and improved” has been a mainstay of retail marketing for forever. And “Been there, done that” easily makes top ten lists of trite phrases. Still, researchers at American University, University of Arizona, and Northwestern University mused on why people will sometimes read the same book a number of times, watch the same movie repeatedly, or go back to the same place and do the same things again.
     Analyzing in-depth interviews with consumers in the U.S. and in New Zealand, the researchers identified a set of explanations:
  • People refresh their memories for favorite experiences 
  • They seek out details they missed before due to the limitations of human attention 
  • They want to give the item another chance for a positive impression because of others being surprised at their report of a prior negative experience 
  • They’ll enjoy being there while friends encounter the movie or destination for the first time 
     Novelty has a major appeal for shoppers, and so does nostalgia. The nostalgia appeal in recent shopping seasons may be due to feelings of social uncertainty from the economic downturn. The appeal of nostalgia may wax and wane, but it’s always in vogue as at least a niche market.

Click below for more: 
Prolong Your Reputation as Cutting Edge 
Enable Shoppers to Revisit the Already Done 
Isolate Loneliness & Materialism 
Record Pleasures of Limited-Supply Nostalgia 
Keep Up-to-Date with Nostalgia Appeals

Monday, August 25, 2014

Name Your Price!

Among the most compelling evidence of the value to a retailer in understanding shopper psychology consists of those instances in which a shopper finds a higher price on an item to be more attractive than a lower price on an equivalent item.
     This might be because the higher price indicates greater exclusivity. Researchers at University of Texas-Dallas explored instances in which a supplier of a high-prestige item drops the price. One result of such a drop is that demand increases for a substitutable item with a higher price. The logic goes like this for the consumer, perhaps at a subconscious level: “If the price is now lower, more people will be able to buy the item. This means the people in my social group won’t be as impressed when I show them I purchased this item. However, if I buy this other item, which carries a higher price, my purchase will impress others more because it’s distinctive.”
     Or the preference for a higher price could be due to pronunciation. For instance, an “s” sound conveys smallness and smoothness to the English-speaking brain. A price stated verbally as seven dollars, sixty-six cents tends to sound small, and the purchase decision seems smooth. But an “oo” sound, as in seven dollars, twenty two cents, tends to sound larger. Researchers at Clark University and University of Connecticut found that a price of $7.66 was rated as a better deal by one group of consumers than was a price of $7.22 by another, equivalent, group of shoppers for the same item regularly priced at $10.00.
     Now Clark University researchers, this time in collaboration with Babson College researchers, find another example of sound effects in pricing: When an item’s price resembles the sound of the shopper’s name or birthdate, the shopper will like the price better. In some circumstances, this means the shopper will prefer that price to a lower price which sounds nothing like the shopper’s identifying information. A price of fifty-five dollars has extra appeal for consumers named Fred or Ms. Fine. A price of $49.15 has extra appeal for a consumer born on 9/15 or even 4/15.
     You may not set different prices for different shoppers based on an individual’s name or birthdate. However, in those circumstances where the sound of a price matches the sound of the shopper’s name, say the price and the shopper’s name in the same sentence.

Click below for more: 
Raise Luxury Prices If Equivalents Drop Prices 
Sound the Prices to Project Sound Value 
Offer Late Alphabet Customers Head Starts 
Open Up Shoppers So You Can Personalize

Monday, August 18, 2014

Discuss Disgust Conservatively & Liberally

Political scientists at University of Nebraska-Lincoln and Rice University say that liberals tend to be physiologically different from conservatives, and that the differences influence what the people will purchase at retail.
     A primary distinction between the two orientations is in the frequency, nature, and intensity of physiological signs of disgust. Prior research had found that the higher a consumer’s identification with politically conservative values, the higher the probability of that consumer buying lots of cleaning supplies, laundry baskets, and desk organizers for use in the household. In another set of experiments, political conservatives spent more time than political liberals fixating on depictions of vomit. This suggests the conservatives would be more receptive to items which head off the disgust.
     Conservatives have a sharper sensitivity to all sorts of negative stimuli. Depictions of house fires and dangerous animals also drew prolonged attention. Facial expressions interpreted as surprise by political liberals were more often interpreted as threat by political conservatives.
     Some research finds that the brain structures of the two orientations differ: Liberals have relatively more gray matter in the anterior cingulate cortex, a part of the brain associated with impulse control, while conservatives have relatively more gray matter in the amygdala, which is associated with intense emotional experiences.
     These are all overall tendencies, not true of every individual consumer. Further, the Nebraska/Rice researchers acknowledge that physiological predispositions, built into a consumer’s DNA, aren’t the whole tale. The situation matters, too. Voters are somewhat more likely to express disgust with politically conservative candidates and issues when the polling place is a school than when it’s a church. In the retail store realm, shoppers sitting on a hard-surface chair are quicker to be repelled by novel brands and products than when sitting on a soft chair.
     Still, discussing with your shoppers their liberal-conservative orientations could help guide your selection of merchandise to stock and your selling points. Or you could use market research data. University of Michigan, New York University, and Turkey’s Özyeğin University researchers analyzed purchases over a six-year period in 1,860 supermarkets across 416 U.S. counties. Survey data on voting patterns and religiosity for each county were used to calculate what the researchers identified as “conservatism.”
     The resulting advice from the researchers: If many of your shoppers identify themselves as religious and say they vote Republican, emphasize national brands over store brands in your merchandising and hesitate stocking recently-released products.

Click below for more: 
Conserve Tradition If Serving Conservatives 
Sell Either Protection or Promotion 
Clean Up By Cleaning Up