Wednesday, June 30, 2010

Reexamine Retail Redlining Temptations

“Retail redlining” occurs when certain groups of consumers systematically receive lower quality goods and/or are charged higher prices for equivalent merchandise than is true for other groups. Researchers at Howard University and University of Texas-Austin give examples like these:
  • Refusing to set up stores in poor neighborhoods whose residents would buy what the store offered
  • Maintaining different pricing structures for outlets in areas having certain ethnicities
  • Habitually showing African American customers merchandise inferior to what is shown to white customers
     In discussing some of these sorts of practices, researchers at Middlebury College cited a year 2000 quote from U.S. News and World Report: “It’s not that these businesses are saying ‘You, black people, you get out of my [establishment].’ They’re saying, ‘Come on in, but we’re going to rip you off.’”
     As a retailer, you might possess justified business reasons for practices that some would call retail redlining: Doing business in certain areas costs more because of high shoplifting rates. Business insurance is harder to get because no fire stations are nearby. Certain groups of customers habitually ask to see the good merchandise because they can’t afford the excellent merchandise.
     But regularly reexamine any such assumptions to be sure it isn’t subconscious prejudice. Being a retailer, you’re continually bombarded with information, much of it carrying conflicting implications. As abundant amounts of information cascade toward you, you probably could find support for almost any opinion you choose to have. If we want to see reasons for retail redlining, we’ll be able to pick out the data to build our case to ourselves.
     In addition, once we consciously or subconsciously retail redline, our brains start working to selectively interpret new information we receive. The more aware we become of engaging in this controversial practice, the greater our drive to pull out data we can twist around to prove to ourselves we’re making the right decisions.
     So straighten out what’s twisted. In his book The Fortune at the Bottom of the Pyramid, C.K. Prahalad of the University of Michigan pointed out how serving the socioeconomically disadvantaged could build profitability.
  • Smaller package sizes can make quality products accessible.
  • Delivery services can build sales among those without private transportation.
  • Talking signage and gracious sales staff can influence shoppers who have limited literacy.
Click below for more:
Give Low-Income Customers Dignity

Tuesday, June 29, 2010

Set Price Anchors with Price Adjacencies

When deciding whether a price for a particular item is about right, shoppers often pay attention to prices of adjacent items on the store shelves, the ecommerce screen, or the restaurant menu. But the effect isn’t always what you might expect.
     Researchers at Singapore Management University and Korea University showed each participant in their project a set of pictures of car models. Then each participant was asked to estimate for one of the car models the relative expense. “How expensive is this car compared to the prices of all car models a person could buy?”
  • When the model was previously completely unknown to the participant, the product adjacencies had an assimilation effect. That is, if the adjacent set consisted of expensive cars, the participant’s guess was that the previously unknown model was expensive. And if the surrounding set consisted of inexpensive cars, the participant’s estimate was a relatively low figure.
  • When the car model was familiar to the subject, but the participant considered themselves a novice regarding cars, there was a contrast effect. That is, if the overall set was of expensive cars, the price estimate for the familiar car got lower. When the overall set was of inexpensive cars, the price estimate for the familiar car got higher.
  • Participants who were familiar with both cars in general and with the specific model shown to them were not influenced much by the price images of the adjacent cars.
     Here is the resulting advice for you:
  • When introducing new products or brands, establish in the shoppers mind what they should pay by placing adjacent items that carry the desired price image—low-priced to luxury-priced.
  • When featuring a product likely to be thoroughly familiar to your shoppers, emphasize the high quality by having adjacent products that carry a price image lower than that of the target product. For shoppers not expert in the product category, this tends to raise the prestige accorded the product. Depending on other factors, this can cause increased sales or an increased willingness to pay more. For shoppers expert in the product category, these product adjacencies won’t lower the amount the shopper is willing to pay.
Click below for more:
Move the Customer to Accept Higher Prices
Prime Customer Interest with Adjacencies

Monday, June 28, 2010

Influence Subconsciously, Not Subliminally

Camouflage can boost success, whether in warfare on the battlefield or in the struggles of plant and animal species to survive. Camouflage also can boost retailing success, but only if used responsibly.
     Consider what your customers would think of you if you said you wanted to influence them to make certain purchases. My guess is that they’d consider you as fulfilling your proper role as a retailer. Contrast that, please, with what you predict your customers would think of you if they overheard you saying to one of your staff that you wanted to manipulate the customer into making certain purchases. My guess is that the customer would promptly become uncomfortable shopping in your store.
     Researchers at Stanford University point out how retailers have reported success getting customers to make a purchase by having text—such as on signage and packaging—set in narrow adjacent columns. The reason this is said to work: In order to read the text, a shopper needs to slowly nod their head up and down, and this sign of yes subconsciously produces even more positive evaluations of products the customer already likes.
     Is the head nodding production tactic manipulation? And what if you said it was subliminal? Subliminal advertising has been called “one of the myths of twentieth-century popular culture.” In my opinion, a major reason some people call it that is marketers and retailers realize how frightened consumers are at the possibility of being subconsciously manipulated.
     The reality, though, is that you can sway consumers by using cues below the level of conscious awareness. Psychologists at Princeton University had study participants watch an episode of The Simpsons. During the program, phrases and pictures related to thirst were shown to some of the participants, but each phrase and picture was presented too quickly for the human brain to consciously recognize what it was.
     Sure enough, those participants shown the subliminal thirst prompts reported being more thirsty after than before the program and more thirsty than the group not shown the prompts.
     People are bombarded with too much information to process it all in a conscious, deliberative way. As retailing professionals, we’re more likely to behave responsibly when we all acknowledge our power to influence consumers subconsciously. Don’t call it subliminal manipulation, though. That frightens the shoppers.

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

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Profit from Shoppers’ Positive Moods
Interpret Brain Science Advice Cautiously

Sunday, June 27, 2010

Recommend Items that Look Like Purchases

I was praising the owner/operator of a hardware store located in a San Francisco neighborhood which includes a large number of Spanish-speaking residents. “You put a lot of attention into ensuring that your sales staff are fluent in both English and Spanish,” I said. He nodded and then replied with a smile. “I also want them to be fluent in sign language.” “Oh, do you have lots of deaf customers?”
     He pointed his two index fingers directly at me, the fingers about three inches apart. Then he began to rotate each finger in an up-and-down circle. “No, not a lot of deaf customers. But we do have a regular stream coming in and telling us things like, ‘I need a replacement part for my ceiling fan. It’s about this long and turns around like this.’ To work in a hardware store, you must understand sign language.”
     Visual communications is a significant part of retailing. The obvious examples are from fashion. “Are these pants the right color to complement the shirt and tie I plan to wear?,” I might ask the salesperson. “Is the dress the right shape to flatter my figure?,” one young woman might ask herself.
     But color and shape carry importance beyond fashion. And that can hold not only for the item, but also for the package. Researchers at University of Southern California found that when shoppers are presented with two unfamiliar products in a category—one of the products in an usually-shaped container and the other one not—most shoppers believe they’re getting more for their money with the product in the unusual container. The researchers say that’s because the unusual shape draws more attention, and the consumer’s brain subconsciously translates the extra attention into higher value. Other research finds that when purchasing a product associated with extra calories, there are shoppers who habitually prefer packages that have a hourglass shape to those that are short and squat.
     Whatever the basis for the selection, when a customer purchases a product, suggest additional products that have a similar visual appearance. A recent posting on the Get Elastic ecommerce blog predicts that visual search software will come into increasing use for generating these sorts of suggestions.

Click below for more:
Advertise What Products Look Like
Exercise Cultural Sensitivity in Color Use
Spring Your Colors

Saturday, June 26, 2010

Attend to Face-to-Face Word-of-Mouth

Even in these days of raging social networking, word-of-mouth (WOM) about your store is most likely to be passed on via face-to-face conversations. That finding was described in an Online Media Daily article and comes from a study carried out by New Jersey-based WOM consultants Keller Fay in partnership with Yahoo.
     So here are two tactics for improving retailer profitability:
  • Encourage customers to shop with you in groups so you can benefit from what you hear them talking about. Hold special events. Carry enough of a range of items to appeal to different family members. Then while they’re shopping, listen to the group members’ chatter. Have sales staff ask customers for specifics about what they like and areas for improvement. Listening in to group shopping can work for the ecommerce retailer by using tools like ShopTogether Crowd.
  • Give shoppers materials they can take away with them as conversation starters to share with family and friends. This is especially useful for newly introduced products and items for which the purchaser incurs monetary and/or self-concept risk. With ecommerce customers, make it easy for the purchaser to send on a URL to others to show off what they’ve bought.
     The Keller Fay/Yahoo study concluded that about 76% of WOM conversations occur face-to-face. The Internet does play a role in these conversations, to be sure, and that role is expected to increase as more members of the millennial generation—the first cohort to have grown up with the Internet—become adult consumers. But for now, the role of the Internet is somewhat limited, with only 15% of the analyzed WOM conversations from 18,500 consumers including information the consumer got online.
     The study findings do reinforce the importance to you of cultivating the influence of market mavens. According to consumer researchers at University of Mannheim and University of Texas-Austin, market mavens are a special type of opinion leader. Rather than considering themselves expert advisors on only certain retail products and services, market mavens counsel others about the whole shopping experience and recommend specific stores. Because market mavens generally belong to many social groups, they could be called “Conversation Catalysts.” That’s the name the Keller Fay/Yahoo people coined.

Click below for more:
Encourage Group Shopping
Gather Comments from Your Customers
Encourage Specifics & Criticism in Word-of-Mouth
Satisfy Each Customer’s Self-Concept
Have Post-Sale Product Literature
Build Buzz with Market Mavens

Friday, June 25, 2010

Recognize Opportunities to Learn

Almost 35 years ago, an article titled “Why Cute Commercials Sell” appeared in TV Guide. That was my first published article about consumer psychology. It was based on a small research project I’d done while in graduate school at Stanford University.
     Over succeeding years, I worked in a number of areas of psychology, but always especially enjoyed projects in organizational and consumer psychology and the opportunities to help others learn. Then a few years ago, Art Freedman, whose family owns American River Ace Hardware in Folsom, California, and who is a renowned retailing consultant, invited me to collaborate with him in helping retailers improve their profitability. A major outcome of that collaboration was Making Money Is Not Illegal, Immoral or Fattening, a book I coauthored with Art.
     Today is Art’s 60th birthday. It’s an occasion for me to publically thank him for all that he has generously taught me about the world of retailing within and outside the U.S. Art’s knowledge of profit margin management is thoroughly instructional. His explosive enthusiasm, unconditional optimism, and ready-fire-aim approach to business have kept me alert.
     Art’s benchmark birthday also provides me an occasion to remind you of the importance of recognizing the learning opportunities all around you as a retailer. You’ve mastered a great deal from formal training, I imagine. But have you made best use of the education and inspiration available to you from people not formally designated as trainers? Your staff? Your customers? Your vendors? Your retailing colleagues? Your retailing competitors? Being taught by their successes and their setbacks. By their strengths and their shortfalls.
     In Making Money Is Not Illegal, Immoral or Fattening, Art and I write, “If you’ve been in retailing for, let’s say, twenty years, do you have twenty years worth of learning or do you have one year of learning repeated twenty times?” Actually, in this case, those are Art’s words. He said it, and I inserted the commas. But the learning links don’t stop there, of course. As you’ll see when you look at page 34 of the book, Art also says he was taught that advice by a very smart Australian named John.
     Which brings me to the last tip for today: Just as you recognize all your opportunities to learn, be sure to also recognize your opportunities and responsibilities to teach others.

Click below for more:
Know Margins on Your Products
Drill Down to Do Item-Level Pricing
Turn Competitors into Partners
Destroy Excuses for Inaction

Thursday, June 24, 2010

Expand into International Safe Harbors

If you’re thinking of going international—maybe having a physical presence in another country, maybe maintaining only a virtual presence via ecommerce—attend to the current state of mind of that country’s consumers.
  • How financially stable do consumers feel? In a recent interview with CNBC, Saks Chairman and CEO Steve Sadove said that, in his experience, there is an almost perfect correlation between sales at Saks and the state of the stock market. A posting on the Consumer Nation blog says that consumer confidence is currently high in Brazil, Russia, India, and China. The acronym BRIC has been a guideline for some time for global investing, so it’s no surprise that those four are promising locations for retailing.
  • How deprived of luxuries do consumers feel? A number of observers of the retailing marketplace are pointing out both how sales of luxury items are picking up now and how sales of luxury items are a leading indicator in predicting overall retail sales. Mr. Sadove congratulated luxury retailers on maintaining demand for their products by keeping supplies a bit scarce. The Consumer Nation blog points to the consumers of Kuwait and Dubai as hungry for luxury.
  • How nationalistic are the consumers? If the consumers want to give their business only to retailers based in their own country, you might choose to partner with a retailer who is already there. If consumers in that nation don’t want to buy brands associated with certain other countries, that affects what you’ll choose to merchandise. Preferences change over time. Researchers from Canada’s Carleton University and York University explored what happened to Australian consumers’ attitudes toward French brands and retailers. Around the time of the 1995 French nuclear testing in the Pacific, those attitudes nosedived toward the negative. But a decade later, the French and their products had been forgiven. There can be patterns of nationalism. Researchers at University of Michigan and University of Minnesota found consumers in India more receptive to retailing associated with India with detergent, but not with luxury chocolates.
     When deciding where to maintain your retailing footprint, there are business fundamentals to be respected: Shipping costs, the government’s receptivity to private enterprise, expectations of payoffs, and more. But even those fundamentals are influenced by the state of mind of each nation’s consumers.

Click below for more:
Feature Country-of-Origin Advantages
Tiptoe to International Markets via Ecommerce

Wednesday, June 23, 2010

Use Consumer Karma to Build Repeat Business

Understanding our shoppers’ belief systems can reveal openings for building commitment. The understanding also can head off miscommunication when dealing with people from cultures other than our own. Research findings from Dartmouth College and Columbia University provide an example of all this under the heading of karma and customer service.
     Karma—which is most strongly associated with India—is a belief system centered around long-term consequences. As we look forward in our lives, the decisions we make now affect what happens to us in the future. Good actions will produce good results at some point. Turning to look behind, we’ll see that what is going on with us now is the result of our past. The thoughts we’ve had, the words we’ve said, the actions we’ve taken, the deeds we’ve instructed others to take on our account or while under our control.
     This is true for everyone, since even the youngest child possesses a past, having lived a succession of existences. Universally, pleasant experiences will happen for us now because of good we’ve done in this or a former life. My unpleasant experiences are the consequences of my bad thoughts, words, and deeds in the past.
     Are you seeing what any of this has to do with customer service? The Dartmouth/Columbia researchers found that consumers who believe in karma are more patient in resolving complaints about retailers than are consumers who don’t believe in karma. The other side of this—since as with good and bad, there is always the other side—is that people who believe in karma are more persistent than those who don’t. Even if they were to attribute bad customer service to their own past bad actions, they do not lower their expectations for good customer service. After all, these consumers want to see themselves as good, and one indicator that they’ve been good is that they finally receive good customer service from you.
     When serving customers from an East Indian cultural background and serving others who demonstrate a belief in karma, recognize the added importance of patience and persistence in building their repeat business.

Click below for more:
Maintain Customer Faith
Tailor Loyalty Programs to Customer Culture
Target Customer Segments with Cultural Events

Tuesday, June 22, 2010

Offer Fundamental Indulgences

About 70% of consumers wish simple products were available to them. That’s the conclusion of a study conducted by international advertising agency Euro RSCG Worldwide and as reported by online Marketing Daily. Study conclusions were based on responses from 5,700 adults residing in France, the Netherlands, England, the U.S., Brazil, Japan, or China.
     The wish for simplicity is good news for retailers, since it relieves a conundrum: During past years, shoppers in developed countries have sought out feature-rich merchandise, but have ended up being less satisfied than if they’d purchased the fundamentals and perhaps added on features later.
     In a set of studies conducted a while back at University of Maryland, participants were offered a choice from three versions of an item. More than 60% of the participants selected the most complex of the three. After making their selection, each participant was invited to add more features from a list totaling 25. The average number of additional features selected was 20. But after the study participants had used their chosen product for a while, follow-up data showed that those who selected a simpler version of the product at the start were much happier.
     That was then, this is now. When it comes to simplicity versus complexity, the consumer psychology trend is toward being happier with simplicity of functions from the start. Offer your customers fundamentals.
     Now please don’t misunderstand. The fact that most consumers wish simpler products were available does not mean all consumers will end up buying those simpler products. Moreover, the trend is not one of going back to basics in product categories. Most shoppers still want their indulgences. And the large majority of shoppers enjoy customizing their products to fit their individual characteristics. The trend here is to want it available in a less complex, more natural format. In the RSCG study, about 60% of the respondents felt consumers should be more connected to nature.

Click below for more:
Sell Ease of Use to Last-Minute Shoppers
Personalize the Shopping Experience
Attract with Social Consciousness

Monday, June 21, 2010

Appeal to Pride of Distinctive Consumers

In advertising products and services intended for plus-size women, should you show images of plus-size women?
     Some retailing consultants say no, you should not. Their argument goes like this: People buy things to help them become what they aspire to be. Most plus-size women aspire to be thinner, so when your target market is plus-size women, show models that are thinner than the members of your target market.
     There are consumer psychology findings supporting the “No, you should not.” Researchers at Tilburg University and Arizona State University found that when female study participants looked at moderately heavy models, the study participants began having unpleasant thoughts about their own weight. On the other hand, when the researchers showed images of moderately thin women, the viewers’ self-esteem improved. Better self-esteem generated by an ad makes people more likely to absorb and act on the advertising message.
     But maybe that conclusion is misguided. Consider that the study participants represented a cross-section of body builds. The conclusions might be different if we included just plus-size women. The argument here is that plus-size women are a distinctive underserved market. According to a New York Times article, about 65% of American women would be classified as overweight by U.S. Centers for Disease Control and Prevention standards, yet women’s plus-size clothing makes up less than 20% of the women’s apparel market.
     Also consider that the Tilburg/Arizona State data were gathered prior to major initiatives to have women accept their less-than-ideal bodies as beautiful. Perhaps the best known of these initiatives is the Dove soap Campaign for Real Beauty. Perhaps the most recent is in last week’s announcement that Debenhams—the UK department store chain—won’t be using software to improve the “natural beauty” of images of models in Debenhams swim suit ads.
     Showing images of well-groomed plus-size women in advertising targeted to plus-size women is analogous to including Spanish text in advertising, store signage, and ecommerce screens targeted to Hispanic populations. It’s like having special sales days for senior citizens. The recipient of your message thinks, “This retailer recognizes my distinctive characteristics. I like the pride in myself this gives me, so I’ll want to give them my business.”

Click below for more:
Have Bilingual Staff for Bilingual Shoppers
Target Customer Segments with Cultural Events
Market to Seniors, not to Elderly

Sunday, June 20, 2010

Make It Easy to Choose Two

Can’t decide between the peach and the cherry ice cream for your cone? Then have a scoop of each.
     Researchers at Yale University find that by encouraging you to buy more than one of the available alternatives, a retailer makes it less likely you’ll turn around and walk out of the store or abandon your ecommerce shopping cart. When presented with a large set of similarly attractive options from a product category, consumers who feel constrained to select only a single alternative become tempted to put off the purchase.
     So make it easy for the customer to choose at least two.
  • For the consumer, the main downside of the double scoop is the additional expense. Give a discount for the second item. Set a package price that results in a lower per-item cost, such as six pairs of socks, two each of the three most popular colors. Waive the shipping fee. Researchers at University of Texas-Austin and University of Southern California report that, on average, when customers saved an average of $8 on shipping and handling, they ended up spending $15 more on merchandise.
  • As another approach to pricing, offer tasting packages at a higher per-quantity price. On the menu, include an entry for six small glasses of beer—one each of six unusual brews—at a price that’s more per ounce than if a customer buys a large mug of one brew. The customer pays extra for the value of avoiding indecision.
  • In your offerings of items which are available in an assortment to satisfy tastes—such as colors of a sweater or flavors of yogurt—anticipate that customers will want to buy more than one variety. In face-to-face selling, say something like, “You probably noticed that this sweater comes in other colors as well. Which of those colors might you want to look at?” In signage, list the available flavors along with the text, “How many different flavors do you like?” In ecommerce, have a small square on the screen for each available color and instruct the customer to click on each square for which they’d like to see if the item is available in their size.
For your profitability: Sell Well: What Really Moves Your Shoppers

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Be Ready to Help Customers Explore Alternatives
Compare Features to Ease Overload

Saturday, June 19, 2010

Employ Purchase Triggers for Children

In selling to children, be sure to obey the law, respect business ethics, and keep the children’s caretakers fully informed. Once you’ve pledged yourself to do that, realize that children are a fruitful market for retailers. Boost your profits by choosing the right approaches to trigger children’s purchase demand.
     Researchers at Cardiff University, Lyon Business School, Knox College, and University of Missouri-Columbia collected data on what they called “childhood materialism.” The research findings spotted purchase triggers you can use when selling to children:
  • Consumer orientation. Little consumers ages 3 to 6 like to classify products, such as by size, color, or function. Just as with adults, set off purchase demand by making it easy for the young child to figure out how the product is different from what they already have. For children from about ages 7 to 11, a trigger is value for money. With product comparisons in advertising and store signage, make the features or benefits list visibly longer for more expensive items than for the less costly ones. And for children ages 12 to 16, give them even more evidence they can use to convince their parents and themselves, such as information about return/exchange policies if they regret the purchase later.
  • Brand awareness. Brand name serves as another trigger. A large percentage of children’s purchase desires include brand name. Research studies have estimates of that percentage ranging from 50% to 90%. And those research studies find that the degree of brand awareness grows as the child gets older. Very important for you—the retailer—to recognize is that brand awareness among children includes not just product brand, but also store name as a brand. Children come to favor shopping at certain stores. Make your store name a trigger for purchases by children.
  • Dissatisfaction. As with their adult caretakers, young consumers tend to be promotion-focused or prevention-focused. The promotion-focused children want more and more. The trigger for them is an opportunity to add to their collection. The prevention-focused children want to avoid risks, such as losing social prestige. A trigger is showing them the current popularity of the item among groups the child wants to belong to.

Click below for more:
Educate Children as Consumers
Ethically Develop Kids into Collectors
Distribute Worksheets for Child Consumers
Cultivate Kids as Future Customers
Use Signage to Categorize Items
Sell Either Protection or Promotion

Friday, June 18, 2010

Discover What Purchasers Never Use

Believe it or not, there are consumer psychologists who go Dumpster diving to better understand how to be of service to customers. In this case, the service is to the services. These psychologists work for the Combat Feeding Directorate, the organization within the U.S. Department of Defense responsible for developing meals that can survive both a drop from a helicopter and the taste buds of nutrition-needy soldiers in the military services.
     By sorting through the trash, the consumer psychologists and their colleagues discover what from the meals was left uneaten. Then they find out why the items are being tossed. In some cases, it has to do with taste. The beef brisket needed more spice. In other cases, it has to do with dietary commitments. Vegetarians didn’t even try the meat dishes, which may have tasted fine.
     Be inspired by the Combat Feeding Directorate Dumpster diving. No, I’m not suggesting you follow up each purchase from your store by digging into the purchaser’s trash cans. The mess and smell aside, visiting all those houses and businesses would simply take too much of your time. But do ask your customers what products or features of products they ended up using rarely or not at all. Better yet, when they’re considering a purchase, pay attention to what they say about past disappointments with items of that type. And analyze the reasons customers give for product returns.
  • Was the product or feature too much trouble to figure out? Philips Electronics says that more than half of their products which shoppers return have nothing wrong except that the purchaser couldn’t figure out how to use the features. If this is going on with your returns, there’s a market for product training or an indication that the manufacturers and your suppliers should be providing better usage instructions.
  • Are products being discarded because the purchaser can’t afford the money or chooses not to spend the time making repairs? If so, there might be a market for you to offer extended service contracts and repair services.
  • Do customers say they’d been misled by being sold features that did not offer the promised benefits? If so, you’ve an opportunity to caution other customers to avoid the unneeded features. This will cut down on returns. It also impresses customers that you’re wanting to save them money. The impression keeps customers coming back to you.
For your profitability: Sell Well: What Really Moves Your Shoppers

Click below for more:
Know How Customers Dispose of Products
Discover How the Customer Compares Items
Ask for Specifics on Merchandise Returns
Make Extended Service Contracts Worthwhile

Thursday, June 17, 2010

Anticipate Intentions of Ecommerce Shoppers

The comprehensive data collection and information analysis capabilities of the Internet allow ecommerce retailers to continually update their knowledge of what their customers are buying. In fact, with the sorts of facts you can learn from even a frequent shopper program, you can do a quite good job of figuring out what sorts of current customers are buying what sorts of items from your store.
     Moving beyond this—or maybe it’s more accurate to say we’re moving earlier than this in the purchase process—think about reading the minds of not only your current customers, but also your potential customers. And not only what they are buying, but also what they intend to buy.
     Online periodical Media Post News is currently reporting about “intent actions” collected by data auction marketplace vendor BlueKai. Intent actions are defined as specific store, product category, brand, and model names that consumers view during their Internet searches on ecommerce and retail price comparison sites. These data can serve as early pointers toward the interests Web visitors are exhibiting in advance of completing their purchases.
     When using intent actions findings, look for surprises and trends. Ignore the rest or you risk being flooded by useless stuff. For instance, BlueKai found that as we entered spring this year, online consumers became less interested in winter clothing and snow sports. No surprise there, so pretty useless news.
     But during this same period, there was a month-to-month increase of about 65% in intent actions data volume having to do with plants and trees for landscaping. This was accompanied by an overall spurt relating to other outdoor items, such as garden tools and patio furniture. This dramatic growth might be surprising to you. You’d suspect that consumer preferences would turn to thoughts of warm weather ahead, but this large an increase signals that you’d better gear up quickly to avoid missing opportunities. Spring fever is out of the question for you.

Click below for more:
Give Loyalty Program Members Prestige
Use Cluster Analysis on Customer Data

Wednesday, June 16, 2010

Minimize Switching Costs

Whenever we ask somebody to change their behavior, we want to make it worthwhile for them.
  • It could be us asking a member of our target market to start shopping with us for a certain category of product instead of continuing to give their business to another store.
  • We might be wanting one of our staff members to start asking each customer, as they enter the store, an open-ended question to open up a conversation, such as, “What product might I help you find?” instead of a yes/no question that usually closes the conversation with a “no,” such as “May I help you?”
  • It might be asking a customer to switch from a pay-per-usage schedule to an unlimited use plan.

     Our natural tendency when thinking about how to make a switch worthwhile is to offer ample positive benefits and then let the target population know about those benefits. This is a good start. People need to see the potential gains in order to put out the energy to form and maintain new habits.
     However, we too often forget about the importance to the consumer or employee of the costs of the switch.

  • How difficult will it be for me to master skills necessary to carry out the new behavior? If I’m to shop at your store instead of my current one, what time will I spend deciding how to fit that into my schedule? If I’m your employee and I’m to start asking customers a new set of questions, how hard will be for me to always remember to do it?
  • What social costs would I need to pay? If your store doesn’t carry the prestige of my current shopping place, will I want to hide from my friends what I‘m doing? If I start carrying out new procedures as your employee, how much teasing will I get from my fellow employees? Do I think they’ll be irritated at me for increasing pressure on them to make the changes I’ve made?

     Researchers at National Kaohsiung University of Applied Sciences in Taiwan found that these switching costs significantly interfere with the positive value a person sees in the change. So when planning your next set of performance improvements for your business, minimize the switching costs. Introduce the changes by saying, “Give this a try.”

Click below for more:
Use Closed-Ended Questions Selectively
Reduce Unwanted Risk for Your Shoppers
Emphasize Possibilities, Not Probabilities

Tuesday, June 15, 2010

Show Off New CPGs on Store Shelves

Seeing an unfamiliar consumer packaged good (CPG) product on the shelf beside competing products is a greater impetus to purchase than is seeing the product in a media advertisement. That's the conclusion from a survey of knowledgeable consumers conducted by retailing consultants Market Force Information. And in agreement with research findings from Envirosell, an especially effective placement for newly introduced CPGs in on end caps.
     Certainly, you'll get the most bang for your buck when all the promotional and selling elements—from advertising to building customer recommendations to shelf placement—work together. But because your resources are limited, you'll want to deploy your plannning, your funds, and the rest with care in order to deliver maximum impact.
     The Market Force survey findings also suggest finer grain strategies for selling newly introduced CPGs:
  • Recommendations by family and friends are influential when the product is coffee or tea.
  • Money-off coupons work well with cereals.
  • Although media advertising is relatively among the least effective elements in driving sales, it does carry weight with the consumer when it comes to health/beauty products and cleaning products.
  • Proper shelf placement counts the most overall, but is the best of the best for snacks and beverages.
     Market Force also used some of the survey findings to strengthen the well-researched argument that CPG shoppers often buy on impulse, so they are highly susceptible to in-store influence. The respondents said they use shopping lists as a memory jogger, but about 35% said they'd make an unplanned purchase of an item that looks interesting, and about 90% said they'd add an item that looks like a bargain.
     The implication for you in selling products unfamiliar to your shoppers: Make them distinctively interesting and offer noticeably low prices on them.
     A limitation in this Market Force survey is that it depended on self-report. Consumers often do not end up doing what they say they're going to do, and they often answer researchers based on what they think they should have done rather than on what they actually have done.
     However, the findings are a valuable reminder that conclusions we make about ways of selling unfamiliar products can benefit from customizing the tactics to the type of product.

Monday, June 14, 2010

Give a Sense of Family for Emotional Attachment

When you want emotional attachment from your customers, project authenticity. For certain sorts of products and services, authenticity of the retailer is especially important to the consumer. Think surfers, skateboarders, and snowboarders. Researchers at University of Bath, Australia's Monash University, and University of Adelaide conducted comprehensive interviews with a selection of such consumers and learned that for these folks, authenticity gives a sense of kinship.
     For more mundane products, like coffee, the importance of authenticity and a sense of kinship come from the context in which the product is provided. Researchers at University of Wisconsin-Madison document how Starbucks is suffering from a negative image in which the company's branding of the shops as an authentic coffee experience has come around to haunt Starbucks. Many customers, after being convinced of the importance of authenticity, decided Starbucks was bragging too much about their ability to be authentic. In some cases, what got in the way was that Starbucks wasn't local enough.
     The implication for you: If you want to form an emotional attachment, give a sense of family to your customers, but be sure to do it in an authentic way.
     That's true not just for certain retailer-to-consumer relationships, but also for certain retailer-to-business (B2B) relationships. According to research at University of Geneva, there are two dimensions to a business-to-business expectation. One type is called "secure business attachment." Your B2B customer may want to rely on you for quick answers to questions about purchases made from your business and for quick solutions to problems with purchases. Very businesslike. The researchers called the other type "close business attachment." Your B2B customers may want to develop close personal bonds with you or with your outside sales agent, exchanging information about family and friends.
     Some retailers say, "Make our customers feel like family." I prefer, "Give a sense of family" because research findings seem clear that for maximum profitability, you want to be sure to keep the interactions as a business relationship. Don't promise more than you'll deliver. That wouldn't be authentic.

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Brag About Your Retailing Humility
Give Your Retailing Local Quality
Learn the Relationship B2B Customers Want

Sunday, June 13, 2010

Call On Structural Equation Modeling

Many of the research questions intended to give you a retailer’s edge are tough to answer accurately because the factors interact in complex ways. For instance, suppose you want to know what motivates people to recommend your store to others.
     A statistical tool for teasing apart questions like this so they can be answered accurately is called Structural Equation Modeling (SEM). When working with a consultant who is using SEM or if you or your consultant are turning SEM findings into real-world action steps, remember that you know your retailing operations better than your consultant or a researcher does.
  • Go into the project with a theory based on your experience as a retailer. The strength of SEM is it can give accurate answers to retailing questions so complex it seems like you’re trying to nail Jell-O to the wall. But SEM works only to confirm theories you already have. For our example, what do you believe to be the different types of people who might recommend your store to others and what motivates each of the different types? When researchers at University of Mannheim in Germany and University of Texas-Austin looked at this question using SEM, they started with the theory that there are two types of people who would recommend a retailer to others. The first type is an opinion leader who comes across as an expert in limited product categories. The second type has been called a market maven. This is the person who recommends stores on the basis of good prices, quality service, or high prestige across product categories. Now, does that theory make sense to you?
  • Conclude as you started, by reminding yourself you know your business operations well. The researchers say that opinion leaders are more likely to recommend your store if you give them in-depth information about their specialty product categories, while market mavens are more likely to recommend you if you give them high-variety store visits. When research conclusions don’t make sense to you, start out by asking yourself if you might have misunderstood what the consultant said or you might have been blind to factors the consultant discovered. If you decide you did understand correctly and you weren’t blind, then consider that what the consultant or researcher is telling you could be nonsense.
Click below for more:
Look At Mean, Median, Mode, and Range
Skim the Data to Spot Leading Trends
Use Cluster Analysis on Customer Data
Keep Customers Happy About Data Collection

Saturday, June 12, 2010

Redirect Consumer Boycott Anger

Hoards of people are angry at BP PLC over the massive and continuing oil spill in the Gulf of Mexico. With that anger, consumers are boycotting BP. The ways in which the boycotts have taken shape, the reactions to the boycotts, and an understanding of the social psychology of consumer boycotts can all provide useful lessons for you, the retailer.
  • Distinguish impromptu from organized boycotts. An article in Canada’s Financial Post about the various protests against BP includes a photo of two women standing at a BP service station. Based on the smiles and the shorts, I’d stay these supposed protestors are much more interested in having their picture taken repeatedly than in raging against the corporate machine. Impromptu boycotts draw attention to your business. The boycott can draw sympathy as well, especially if the protest is prolonged. Turn all this to your advantage. A number of newspaper articles are currently appearing that explain how boycotting a dealer-owned gas station that happens to carry the BP logo hurts the people who own the station, not BP Global at all. Your initial reaction to an impromptu boycott could profitably be, “Let’s use any media attention to show how good a retail business we run.”
  • If it is a boycott initiated and maintained by a community action group, determine the group’s boycott objectives before deciding what actions to take. According to researchers at University of Texas-Austin and University of Southern California, community action groups organizing a boycott are usually less interested in doing economic damage to a business than in forcing changes to the behavior of all businesses engaging in the offensive action. If you find this is the objective of an organized boycott of your retail business, publicize any of the ways in which you share common ground with the group. For instance, a service station owner probably shares with Facebook’s Boycott BP group—what is currently the fastest-growing online boycott sponsor—a desire to keep beaches clean. That service station owner might even make common ground with Greenpeace. After all, according to an article in yesterday’s New York Times, Greenpeace is now against a boycott of BP. Greenpeace instead wants us to support what they call another BP—Beyond Petroleum. Well, okay, the retailer and Greenpeace might part company on that point.

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Resolve Customer Complaints Carefully

Friday, June 11, 2010

Acknowledge Customers’ Willful Ignorance

Your customers can’t handle the truth. Or at least your customers at times find it emotionally challenging to consider the whole truth. One circumstance in which this happens has to do with a shopper’s sense of social consciousness.
     Your customer loves the design of a shirt on your store shelf, but despises the labor practices of manufacturers of some of the products your store carries. So they don’t look at the label before putting the shirt into their shopping cart.
     Your customer instantly realizes the mahogany table now on your showroom floor would look perfect in their dining room, but they could never look themselves in the eye if they thought the mahogany came from an endangered rain forest. So they don’t give it a thought.
     Researchers at Washington State University and University of Texas-Austin called this phenomenon “willful ignorance.” They found that willful ignorance operates subconsciously and it occurs because handling the full truth would be overly painful for the person.
     This led the researchers to a strange conclusion: Shoppers who care the most about an issue are the ones most likely to hide from the reality. The furniture shopper who would feel the deepest amount of grief at having in their home any wood from an endangered rainforest turns out to be the shopper most likely to avoid asking about the origin of the material after they’ve decided they deeply love the item for sale.
     Willful ignorance happens when strong emotions—like grief and love—are in conflict. It happens not only with matters of social consciousness, but also with issues like price, delivery time, and installation difficulty. In relationships with merchandise as with humans, once love sets it, we subconsciously avoid asking too many questions.
     Decide how much information you and your sales staff will volunteer. As a general rule, I’m against overloading customers with information or answering questions that haven’t be asked. However, the nature of this sort of willful ignorance is such that doubts are quite likely to bubble to the surface after the purchase. This can lead your customer to be sorry they made the purchase from you and even to blame you for withholding information from them.
     If you sense something is important for the customer to know, tell it to them.

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

Click below for more:
Be Clear What You Mean By Going Green
Have Post-Sale Product Literature
Head Off After-Order Regrets
Reduce Unwanted Risk for Your Shoppers

Thursday, June 10, 2010

Overcome Weaknesses in Business Name

If you treasure alpine hiking, are you more likely to stay at the Grand Pines Lodge or at the Soft Soap Spa? Research at University of Basel and University of St. Gallen in Switzerland concludes that you’d opt for the Grand Pines Lodge. It’s because a business is rated more highly when its name is descriptive of the characteristics sought by customers.
     That finding could be useful if you’re starting up your business or if you’re ready to go through a name change. But how do you overcome a weak association in a business name you want to keep? Here are some tactics based on what the research found to be helpful:
  • Repeatedly advertise and publicize the characteristics you want people to associate with your operations.
  • Point out the similarities of your business to a business that has the features shoppers are looking for.
  • Use customer testimonials to document your benefits that match shopper preferences.
     If your business is a local institution, you might not realize there’s some misleading image being portrayed to out-of-towners. Here’s another hotel example: A number of years ago, I was invited to be a guest on Cleveland, Ohio’s WEWS, Channel 5. A producer there wanted me to talk about my work as a consulting psychologist. After I accepted the invitation, I was told reservations had been made for me to stay the night before at a hotel called Swingos. Having never heard of Swingos, my first reaction was negative. I wasn’t sure whether to pack the ear plugs so I’d get a good night’s sleep, practice my dance steps, or be sure to bring the wife along with me on the trip.
     As it turned out, there was no need for me to do any swinging at Swingos. I learned that Swingos Celebrity Inn was begun in the 1960s by Nick Swingos and his son Jim. After my stay, my mental associations with Swingos became positive ones.
     Actually, there was more about names during my visit: When I arrived at the studio the next day, the producer brought me to the set to meet my interviewers for the program segment. She introduced me to Fred Griffith. He introduced me to his co-host, Wilma Smith.
     “Fred and Wilma,” I rehearsed to myself. No negatives or weaknesses in those names. I’d always liked “The Flintstones.”

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

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Make Your Business Name Easy to Say
Project Your Brand Positively
Compare Unknown Brands to Best-Known Brands

Wednesday, June 9, 2010

Slow Down the Sales Process Sometimes

Shoppers hate delays. Because hate can lead to consumers avoiding your store in the future, absolutely always provide the speediest service possible.
     Come on now. When you finished reading that paragraph through the eyes of a professional retailer, you knew there were important exceptions, didn’t you? Dining at a fine restaurant is best experienced as leisurely. This applies even to the delivery of the entrĂ©e. You don’t want to wait hours. But if you order the forbidden black rice risotto and the server dumps it in front of you thirty-five seconds later, alarm bells sound from your brain’s gourmet lobe. Hey, my sources tell me it takes thirty-five minutes to prepare a reasonably palatable forbidden black rice risotto.
     Researchers at University of Michigan find that when it comes to products with a custom or artistic component, purchasers tend to consider a longer delivery time—within reasonable limits—as a signal of higher quality. Researchers at University of Singapore and University of Toronto say the same sort of thing holds for retail services. In their study—conducted in the world of commerce rather than in a university laboratory—consumers evaluated the price of a locksmith service as a better value when the service took longer than when the lock was picked faster.
     Researchers at University of California-San Diego and Duke University discovered that although people say they would never pay more money if it meant waiting longer for delivery, those same people report experiencing substantial pleasure from anticipation during the wait. Other researchers point out how a significant percentage of people don’t mind at all waiting for an unpleasant experience, such as a dental appointment. Many of them use the waiting time to prepare themselves.
     So recognize you’ll sometimes want to take inspiration from the Simon and Garfunkel classic, “59th Street Bridge Song” and allow your customers to do the same: “Slow down, you move too fast. You got to make the morning last. Just kicking down the cobble stones. Looking for fun and feelin’ groovy.”

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Explain Delivery Time As Quality/Talent
Explain How Quick Service Is Worth More

Tuesday, June 8, 2010

Offer Customers a Sense of Ownership

When customers feel a sense of ownership in the success of your store, they’re more likely to:
  • Shop with you even if your prices are somewhat higher
  • Recommend you to family and friends
  • Defend your store against criticism, even criticism they overhear from people they don’t know
     According to research reported in Harvard Business Review, if you can increase the number of these stakeholder advocates by, let’s say, ten percent, you’ll see an increase in sales of substantially more than ten percent.
     Maybe you could develop stakeholders by making customers into stockholders. The Financial Times in London reports that ecommerce food retailer Ocado is doing that. Each Ocado customer who has spent more than ₤300 in 2010 will be invited to purchase online up to ₤12,000 worth of shares in an initial public offering.
     Don’t feel like selling the shop to your customers? Well, another approach is to incorporate customers’ ideas into your operations. Do adhere to three requirements:
  • If you ask for ideas, seriously consider them. If you don’t have time to consider submitted ideas, don’t ask. Otherwise, you’ll frustrate your customers.
  • Adhere to legal advice regarding solicitation of ideas. For example, you might be advised to always include a notice that submitted ideas become your property and there is no compensation aside from what you’ve explicitly promised.
  • Give ample recognition to the people whose ideas you use. Those who are recognized will feel the sense of ownership. And all the others will be able to see that they too can join in by sharing their good ideas with your store.
     Other approaches? Set up a Facebook page to which you invite customers to declare themselves as your friends. Offer to Twitter to your customers the latest insider chitchat about your operations. In your frequent shopper program, refer to participants as members.
     But whatever you do to encourage your customers to feel a sense of ownership, continually work to justify the pride in themselves that comes from identifying with your store. The awful diametric opposite to pride in ownership? Recall what comedian Groucho Marks said about this matter many decades ago: “I don't care to belong to any club that will have me as a member.”

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Keep Creating Advocates for Your Business
Ask Customers & Staff for Ideas
Give Loyalty Program Members Prestige

Monday, June 7, 2010

Compare Features to Ease Overload

In developed economies, consumers like to believe they’ve many alternatives to select from. However, when faced with an abundance of choices, the consumer often feels overwhelmed with information. Researchers at University of Pennsylvania and Columbia University find that large product assortments attract shoppers to a store or ecommerce site, but once there, many of the shoppers will avoid making a purchase because they’re not sure what’s best. They’ll go on to something else, at least for a while. And during that while, they might leave your store or website.
     Building on that finding, researchers at University of Delaware and University of Pennsylvania discovered that a way to keep the shopper engaged is to encourage them to focus on product features rather than item alternatives. With the features in mind, the person can start rating each alternative until they come to a decision.
     So in your advertising, point out that you offer a large number of choices. When the shopper starts their shopping with you, display categories within categories to highlight the abundance of alternatives.
     But then recognize the potential for information overload. To make things easier for the shopper, use similar wording in describing the features of each product. And provide tables that list features across the top, the names of a small selection of product alternatives along the left side, and checkmarks in the cells to indicate which product has which features.
  • In the product descriptions and in the table, list features concisely. But also outside the table, state the benefit of each feature: “Low rolling resistance gives you better fuel efficiency.”
  • As a general rule, list no more than five of the most important product features and no more than five of the product alternatives. However, if the product alternatives are very similar in what features they have, then include one or two trivial features that one or two of the alternatives have, but the others don’t. This helps unfreeze the decision maker who is immobilized by information overload.
  • Business-to-business shoppers might do a comprehensive objective weighted analysis of each product by feature. But the vast majority of shoppers will end up making the purchase as much on intuitive emotion as on the basis of scientific analysis. In fact, this usually results in better decisions. Therefore, there is a risk in you probing too much for reasons once the customer has made a decision.

Click below for more:
Protect Shoppers From Too Many Choices
Offer Resisters One More Item
Use Signage to Categorize Items
Give Experts Novel Product Categories
Analyze What Your Shoppers Say and Do

Sunday, June 6, 2010

Tiptoe to International Markets via Ecommerce

Store-based retailers can use ecommerce to introduce themselves into markets beyond their national borders and to gather market research information to shape their next moves. Nordstrom is one among many retailers choosing to do this. Urban Outfitters unveiled anthropologie.eu in order to assess the European interest in that upscale, teen-focused brand.
     Here are some tips from the perspective of business and shopper psychology:
  • Prepare yourself and your business colleagues to handle the psychological stress of high uncertainty. Global retailing has been reeling the past few years from the economic freefall, and things seem to have turned even uglier in recent weeks with the debt crises in Greece and then in Hungary. Research findings from University of Pennsylvania indicate that your best approach for tiptoeing into international markets via ecommerce is to focus on the long-term: Enter with an optimistic approach. Gather data objectively. Analyze the results with a critical eye.
  • Keep up with developments in ecommerce channels. The devices available for ecommerce are expanding in form and capabilities. Mobile phones have become smart phones. Amazon’s Kindle appears destined to take grocery orders as well as sell book contents. For some time now, Apple Computer CEO Steve Jobs has been predicting that the personal computer—and even the notebook computer—will fade away as viable ecommerce platforms. At The Wall Street Journal’s “D: All Things Digital” conference last week, Microsoft CEO Steve Ballmer responded by saying the new devices will augment, not replace, the personal computer and notebook computer.
  • When marketing internationally, use translations strategically. Researchers at University of Michigan and University of Minnesota explored the choice of language in advertising to consumers in India. The researchers found that the home language—Hindi, in this case—worked best when selling necessities, such as detergent. English worked best when selling luxury items, such as gourmet chocolates. Evidence is also accumulating that consumers prefer to have prices set in the local currency which stays stable even in the face of fluctuating exchange rates. This makes pricing more challenging for you—the retailer. But if it leads to increased profitability, isn’t it worth the bother?
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Have Bilingual Staff for Bilingual Shoppers

Saturday, June 5, 2010

Customize Your Discount Coupons

Sam’s Club is rolling out a program in which a shopper is issued discount coupons customized to that shopper’s likely purchasing interests. The program, called eValues, requires data collection and analysis that might be beyond the scope of what your store is able or willing to do. Still, there’s a trend here to learn from.
     Actually, it's a confluence of two trends: A recent Harris Interactive survey found that coupon use is spreading to the point where many shoppers hesitate going to a store unless they have coupons to apply to at least part of their planned purchases. And a great deal of research indicates shoppers are increasingly expecting retailers to customize. The combination of these two means you can benefit from customizing your discount coupons.
  • You’ll increase effectiveness when you get customized coupons into the hands of the customer before they start their product selection. For instance, researchers at Massachusetts Institute of Technology found that coupons presented at the store entrance drive up sales much more than do coupons available in the aisles of stores. The Sam’s Club eValues coupons are provided by a machine at the store entrance. The shopper inserts an identification card, which allows the customizing. Many grocery store chains issue discount coupons, good for future purchases, on the back of the customer’s receipt, again allowing for offering the discount before the shopping starts and for customizing, in this case based on the nature of the customer’s prior purchases. What would work for you to make each customer feel special by getting the right coupons before they start their shopping?
  • With customized coupons, it does become especially important to protect your business against coupon fraud. Develop a coding mark or system to allow staff and/or cash registers to distinguish genuine from counterfeit. Train sales and cash/wrap staff to screen for evidence of fraud. Also train staff to treat customers with the utmost courtesy if fraud is suspected. The customer might believe they are using a valid coupon. If they learn they are not, they’ll be upset enough at not getting money off. Don’t add to the upset by accusing them of dishonesty.
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Give Coupons Early and Proudly
Have Staff Carry Copies of Store Ads

Friday, June 4, 2010

Teach Sensory Terms to Avoid Misleading

Don’t mislead shoppers. A study at University of Central Florida and Erasmus University confirmed what many retailers know: You might be able to get away with misleading words and actions once, but the result is customer suspiciousness about you from that point on.
     Trouble is, the deception can be inadvertent. We wanted to describe the product accurately, but the busy shopper misunderstood. It’s a particular danger with offerings that base their attractiveness on sensory appeal, such that the qualities of the product can’t be experienced until consumed: Gourmet food. Movies. Music. Wine.
     Those four categories are examples given by researchers at University of Nevada-Las Vegas, and the researchers focused on the last of the four—wine—in looking at how to inoculate shoppers against misleading advertising. The tool is what’s called a “consumption vocabulary.” This is a set of terms shoppers can use to describe characteristics that distinguish products. With wine, the terms include “fruity” and “spicy.” A good consumption vocabulary enables the shopper to describe not just good quality, but also product flaws. Wine connoisseurs talk about “rubbery” and “sweaty.”
     The UNLV researchers taught one group of wine aficionados a consumption vocabulary during wine tasting using a “wine aroma wheel,” a descriptive scheme developed at University of California-Davis. Other participants did not receive training on the wine aroma wheel during their wine tasting. Then some from each group were exposed to misleading advertising about the wines they had tried. Those participants who were taught the consumption vocabulary were better able to resist the effects of the misleading advertising than were those who did not receive the training.
     Stimulate your shopper’s senses. This helps you sell higher-margin alternatives. But to avoid misleading the shopper, teach a consumption vocabulary. Have shoppers sample products while you’re telling them the right descriptive terms.

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Give a Vocabulary for Richer Shopping

Thursday, June 3, 2010

Be Provocative, But Don’t Offend

Hey, how about posting photos of naked women? Maybe that’ll draw shoppers’ attention.
     Would your decision about putting up the photos in your store be different if I told you I’d like them to be in the baby department? That’s because the photos are intended to help you sell Britax baby strollers and bassinets.
     What if you saw that the photos featured a naked woman holding one or two naked babies, and that the objective announced by Britax was to show how their baby holders are designed to duplicate the loving hugs by a mother of her child. Click here to see for yourself. Click here for a video.
     Does nudity that provokes useful attention on TV or YouTube cross over the line to blatant offensiveness when those images are shown in a store? The erotic images in Calvin Klein media advertising shocked lots of people. Retailers might decide that such ads are fine in magazines—shocking lots of people means consumers are noticing the brand—but those retailers might decide not to have the images on their walls.
     What if your store is in Saudi Arabia, where female mannequins must never show the heads, arms, or bodily curves? Does it seem clear that posters showing naked women would be highly offensive? What if your store is in Australia? Research from Griffith University, University of Canterbury (New Zealand), and University of Queensland indicates that Australian women are more likely to take socially responsible actions—such as ensuring that their infant is in a proper stroller—when ads and signage feature mildly erotic imagery? But would your shoppers consider the Britax ads to be even mildly erotic?
     Think now about how to use your advertising and merchandising to provoke attention while never offending too many of your customers and potential customers.

Wednesday, June 2, 2010

Recruit Staff from Your Shoppers

As the economy picks up, will you be ready to replace employees who accept jobs elsewhere or go back to school? Now is the time to start building your list of candidates. If you wait until there’s an immediate need for new faces, you’re likely to have to settle for lower quality than you should have on the selling floor, at the cash registers, and in the back office.
     When retailers run low on suitable candidates, they’ll often ask current employees to recommend their family and friends. That can work out well. For instance, there are family-run businesses in which obligations to family keep everyone in line. But if you depend on employees’ families and friends as your recruitment pool, there’s the potential for problems. If you hire a family member of a highly competent employee, your less competent employees are likely to ask why their son, mother, or cousin wasn’t hired. If one family member needs to be disciplined or fired, what happens to the job performance of their relatives and old high school buddies still working for you?
     On the other hand, people who shop frequently in your store can turn out to be excellent employees. They know the store well, and your staff have had an opportunity to interact with them. Your frequent shoppers are also members of your store’s community who will praise your store and defend it against criticism.
     Being a frequent shopper is by no means enough to qualify as an excellent hire. But here is an excellent source for people you’ll screen. Do you have at least one sign in your store that reads something like, “We’re a great place to shop, aren’t we? We’re also a great place to work. Please ask for a job application if you’d like to learn more.”

Tuesday, June 1, 2010

Take Occam’s Razor to Your Shoppers

Occam’s Razor—attributed to the fourteenth century logician William of Ockham—says that we should trim out the excess from our theories. Thoughts of Occam’s Razor come to my mind in response to statements from a recent meeting sponsored by the Advertising Research Foundation. The thrust of the statements was that most changes made on the basis of consumer research fail.
     The response of some researchers was, “But we’re able to offer so much data gathered with so many methods.” The response to that, and one I agree with, is that having lots of data is good and using a variety of tools is great, but once we analyze data, we must make advice simple. We must tell the retailer what to do and what to avoid. We need to say why the tactics should work, but that, too, must be straightforward.
     Because of the complexity of consumer behavior, the answer to many retailer’s questions could be, “It depends.” But that’s not what you want to hear. You want an answer that’s sufficient to give you a retailer’s edge over the competition. You want advice that’s simple enough for you to remember and communicate to staff.
     President Harry Truman is quoted as saying, “I want a one-armed economist.” He was frustrated by advisors who answered with, “On the one hand…. But on the other hand….” In deciding what you’ll do to improve your profitability, recognize that adding complexity can give better results. When it comes to influencing your shoppers’ behavior, what works best does depend on a number of factors.
     But always be looking for ways to make it simpler. And whenever the complexity gets in the way of your being able to use the tactics or train others in using them, trim away in the spirit of Occam’s Razor.