Thursday, June 30, 2011

Rearrange When the Chips Are Down

What’s a retailer to do when the chips are down? Down the cafeteria line, that is.
     In his book Why We Buy, retailing consultant Paco Underhill tells of studying the effect of potato chip package placement on sales. In some cafeterias, the bags were at the head of the line, by where you picked up your tray, and in others, they were at the end of the line, by where you paid for the food you’d selected.
     Please look up from your reading for a moment, retailer, to guess which arrangement produced higher sales. Was it the head-of-the-line arrangement because consumers were more likely to add on a treat before seeing all the other food they’d selected? Or was it at the close-to-the-payment placement because the diner was more likely to know which style chips to pick to complement the entrée they’d selected?
     Mr. Underhill reports that the sales were higher when the chips were at the end of the line.
     If you’re feeling at the end of the line when it comes to figuring out ways to jump-start sales, rearrange the merchandise presentation. Here are a few research-based tips:
  • Studies at University of Hong Kong and National University of Singapore indicate that when a customer appears to be in an upbeat mood, they’re more likely to select either the first or the last alternative you propose than to select a middle alternative.
  • When the customer is sad, worried, or angry, but is determined to make the purchase rather than defer the decision, they seek the compromise alternative and will look for it as the middle alternative in the presentation order. Not the highest-priced or lowest priced, but the middle-priced. Not the highest quality or lowest quality, but the medium quality. Keep it brief, though. Findings from research at University of Maryland and Yale University indicate that too much talking will lock into the shopper's mind the bad feelings they're experiencing, and those negative memories make it less likely they'll buy from you in the future.
  • According to researchers from Hong Kong University of Science and Technology, if your shopper is considering a lot of information when making a purchase decision, they become willing to buy the higher-priced alternative when the alternatives are presented in order from most expensive to least expensive. The price of the first item becomes an anchor for what your shopper will expect to pay.
For your profitability: Sell Well: What Really Moves Your Shoppers

Click below for more:
Guide Choice by Sequence of Presentation

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