Saturday, April 30, 2011

Cycle the Merchandise by Paycheck Interval

MarketWatch reports that Walmart Stores, Inc. is finding time of month to be important. Shoppers go through many sorts of cycles each day, each week, each month, each year. It makes sense to cycle the merchandise to fit changing preferences.
     The type of cycle Walmart has noted is paycheck interval. Daily sales during the first few days of the month have been higher than daily sales during other days. Walmart attributes this to when paychecks are received. The implication: Feature the higher-priced merchandise at the start of each month.
     Before adapting this principle to your retailing business, consider a couple of points. First, your target demographic might be getting their paychecks weekly or biweekly rather than monthly. In fact, I suspect that the target demographic for Walmart does as well. Within the monthly cycle, there might very well be smaller bumps upwards at weekly intervals.
     The second point to consider is that Walmart depends strongly on an image of everyday low prices on all items. In fact, retailing experts say that Walmart initiatives to change that image have contributed to their numerous consecutive quarters of drop in same-store year-to-year domestic sales. Walmart had switched to strategies of rolling back prices on selected items and narrowing product assortments. They’re now switching back.
     The competitiveness of your business model may not depend that much on price. Do the paycheck cycles still make a difference in optimal merchandising techniques? Yes, but from a different angle. Research at University of Utah and University of Iowa finds that the effects are due to more than the consumer running out of money each interval. Paycheck cycles were found to affect not only how much money people will spend on merchandise, but also the types of merchandise they’ll find most attractive.
     In the days soon after receiving a paycheck, consumers with full-time jobs become more interested in products and services that help them gain more than what they currently have. This is a time for you to feature the latest technologies and the toothpaste which promises to whiten teeth.
     Then as the days after the paycheck pass, the person becomes progressively more interested in products and services which help them avoid losing what they have now. They'll become more interested in nostalgia items, familiar brands, and the cavity-fighter toothpaste. The researchers determined that this cycling was not principally due to cycles in consumers’ disposable income.

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Acknowledge the Power of Cycles
Merchandise to Fit Purchasing Cycles
Sell Either Protection or Promotion

Friday, April 29, 2011

Commit Shoppers from a Distance for Expenses

Consumers are more willing to pay a premium price for a product they desire if you obtain a commitment well in advance of the product’s availability. In a demonstration of this phenomenon, researchers at University of Mannheim watched what happened when consumers were told about a desirable product to be launched soon along with the premium price of the product. These consumers considered the high price as acceptable more often than did consumers who didn’t learn the price until the time of product launch.
     The time distance reduces sticker shock in a few ways:
  • The shopper has more time to budget for the purchase. That’s the principle behind layaway plans.
  • The announcement in advance encourages a longer-term perspective, which in turn relaxes budget restrictions. Researchers from Princeton, University of Chicago, and Digitas-Boston surveyed people entering a grocery store. One set were asked questions about the contents of their wallets. This nudged their thoughts toward the money they had to spend in the short term. Another set of shoppers were asked instead about the different types of accounts they had in their investment portfolio, such as checking and savings accounts. This got those shoppers thinking in the longer term. The second group went on to spend 36% more than the first group.
  • When acquisition will occur at a somewhat distant time, the consumer correlates price more strongly with quality. The Mannheim researchers discovered that if the shopper faces an immediate expenditure of a higher amount than they predicted, the shopper devotes energy to thinking about other opportunities this expenditure will preclude. This distracts from associations between the item price and item quality. When extent of the price wasn’t a surprise because it had been announced some time in advance, the acceptance of the price lingered until the product’s availability.
     The Mannheim researchers also found that other sorts of distance—beyond time—can work. They reflect on how when a shopper purchases an item for someone else, the social distance can relax defenses against high prices.
     During a “Competing with Large Retailers” seminar I conducted last week in Stanislaus County, California, a participant told of shopping for perfume to give to his wife. As he smelled around, another man approached the counter and said, “Show me your three most expensive perfumes so I can select from those.”
     When buying a gift for another, we get less price sensitive.

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Give Customers Long-Range Perspectives
Ventilate Frustration When Promoting Self-Control

Thursday, April 28, 2011

Dress Up Those Dressing Rooms

A recent Wall Street Journal article reports that clothes shoppers who use the dressing rooms spend one-third of their store time in there on average, and they are much more likely to buy than shoppers who don’t use the rooms. The article goes on to catalog ways a retailer can make dressing rooms more conducive to selling.
     Here’s my adaptation of that list to fit what consumer psychology research finds about all the different sorts of environments in which we allow shoppers to try out our merchandise to decide how well it fits their preferences.
  • Put those try-out areas in convenient locations. Old Navy is moving their dressing rooms from the far reaches of the store layout toward the center.
  • Keep the environment uncluttered and fresh looking. A True Value Hardware store in Omaha, Nebraska keeps fresh flowers in the areas where customers might try out items.
  • Provide places for shoppers to safely put aside packages and belongings so they can turn their attention to the prospective purchases. Some retailers use an ottoman and mirror arrangement for easy visibility.
  • Encourage group shopping. Anthropologie designs fitting rooms to accommodate friends who come together.
  • Merchandise the area. When the customer is assessing the suitability of the item, what else might they be interested in purchasing? Since you’re not sure what will be brought to the area, these should be items that can fit a number of preferences. In a semiprivate space, also be aware of the risks of theft. Loft has accessories like large belts and decorative jewelry.
  • Have proper lighting. Not so harsh that it exaggerates flaws in the merchandise or the consumer. Not so dim or uneven that the shopper can’t easily inspect the merchandise. Ideally, allow the shopper to adjust the lighting. Ann Taylor dressing rooms use six sources of lighting and three types of bulbs—ceramic metal halide, compact fluorescent, and low-voltage.
  • Make it easy for the shopper to have staff do any re-shelving. Kohl’s, like many other retailers, has a “Not for me” container by the dressing room entrance.
  • Have supportive staff easily available. The WSJ reporter who wrote the article has said in a separate interview that it would not hurt at all to have a handsome man standing by female fashion dressing rooms who says to each woman coming out and gazing around, “You look absolutely lovely.”
Click below for more:
Use Accent Lighting to Build Shopper Interest

Wednesday, April 27, 2011

Resell Consumers on Buying Used Items

Not that many years ago, people who used discount coupons were frowned upon. Researchers at University of Colorado-Boulder, University of Virginia, Duke University, and University of Bologna had described associations between coupon use and being a tightwad. Researchers at University of Alberta and University of Manitoba had found that when people in a store saw someone using a discount coupon, judgments of the coupon-users were tugged in a negative direction.
     Now, in the era of Groupon and of mobile devices to display in-store discount offers, coupons are de rigueur.
     Resale stores have followed a similar trajectory of consumer sentiment, even if a few years behind. A recent Chicago Tribune article estimates that the number of independently-owned resale and consignment stores in the U.S. has grown about 50% over five years. Thrift store chain Savers, Inc.—already with nearly 300 stores in America, Canada, and Australia—is planning substantial expansion. And don’t forget the profit-making business models of stores like Children’s Orchard and Howie Mack, plus those with great names like Play it Again, Chic to Chic, and Once Upon a Child.
     Successful resale takes planning. You'll require expertise about what to pay for the used merchandise, knowledge of what used merchandise you can legally sell, polices about returns of used merchandise, and more. Still, consider joining in on this opportunity for profitability by convincing your customers of the value in resale.
  • You need used merchandise to sell. Because of the broad popularity of eBay, Craigslist, and Amazon’s small merchant arrangements, there are many consumers who will be quite comfortable turning their unneeded merchandise into money or merchandise credit. It’s a familiar process.
  • Another way to increase familiarity is to tie in your for-profit resale business to charity. That’s how many consumers think of resale. So Savers—with its slogan of “Good Deeds. Good Deals”—publicizes how they feature resale items which have been donated to a network of about 120 nonprofits.
  • Unless your sole business is resale, reserve a section of your store for it. Auto dealers don’t mix new and used cars. For many consumers, used merchandise still holds a stigma. The stigma can rub off on new merchandise if it’s physically close to the used. There’s even evidence that having the same salesperson handle both the new and the used can decrease the willingness of the shopper to pay full price for unused items.
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Give Coupons Early and Proudly
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Tuesday, April 26, 2011

Ease Social Risk by Accommodating Shyness

The Globe and Mail in Toronto recently reported how Sears Canada Inc. is using Skype technology within its fashion shops. A prospective customer can step outside the dressing room and model her potential purchase for friends and family.
     Although there is a little detail in the Skype initiative which does concern me, the overall concept is nice. Fashion apparel is one of the many product categories carrying a high potential for social risk. The social risk question is, “If the people I admire know I'm using this product or service, am I in danger of falling out of favor with them?”
     Ease social risk by making it easy for shoppers to bring along others or to contact them via mobile phone from the shopping area. Skype broadens the video opportunities. The advisors can be in more places.
     This Sears Canada initiative also addresses two other sorts of shopper risk:
  • Financial. The shopper’s question here is, “Am I paying too much money?” Friends and family can share their answers to that question.
  • Psychological. While social risk involves, “What will others think of me?,” psychological risk involves, “Does using this product or service conflict with the image I want to maintain of myself?” A shopper motivated to maintain a self-image of distinctiveness, for instance, can use the Skype call to size up the odds of being a conformist if they choose the product or service they’re considering.
     So what’s the little detail that concerns me? A 58-inch display screen. Perhaps not such a little detail, after all. The system being installed in the Sears Canada fashion shops displays the person’s image on the big screen. Yet, people with the highest sensitivity to social risk are likely to be the ones most reluctant to face a portrayal of themselves in this way.
     Retailers long ago learned that even in the most spacious store, a women’s cosmetics section should include alcoves in which the shopper can feel a sense of privacy. Combine social risk with trendy products, and you’ve a formula for shopper shyness. A 58-inch monitor screen isn’t the same as a movie theatre screen, and a shopper sending her image to known friends via Skype isn’t as bad as inviting strangers to watch from the audience. Still, if you fail to accommodate the desire for privacy, it could mean a sale fades out without credits—or cash. The end.

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Reduce Unwanted Risks for Your Shoppers

Monday, April 25, 2011

Prepare Customers for Price Increases

Industry analysts are saying that over coming months, suppliers will continue to ratchet up their prices to retailers. An Investor’s Business Daily article estimates a climb of 15% during year 2011, although the amount of the increase could vary widely depending upon the raw materials costs and types of demand in different retailing segments.
     Prepare your customers to accept price increases:
  • Strengthen store loyalty. The IBD article points to Lululemon Athletica, Tiffany, and Coach as retailers that have built a cult-like following among many customers. Shoppers at these stores often justify to themselves paying higher prices because of their desire to help the retailer succeed. Use social media to develop this sort of loyalty. Carrying exclusive premium-quality brands also helps.
  • A related way to help the customer justify the higher prices is to tell them a story that dramatizes the benefits of the store. Fill the story with as much detail as the shopper’s attention span seems to allow. Research at Switzerland’s University of St. Gallen finds that the detailed recitation distracts the shopper from concluding the salesperson is being manipulative.
  • Explain that you need to increase your prices when your supplier increases their costs to you. Adapt the following to fit your style: “When our suppliers increase their prices to us, we need to pass those increases on to the customers so that we can stay in business and continue to serve shoppers like you and employ the people like me.” Although the basis for suppliers charging you more might be the dramatic rise in transportation and shipping costs, avoid using this as a reason with customers. Research finds that talk of such indirect costs won’t persuade customers.
  • When raising prices on items that many customers will see as necessities, use signage to describe less expensive alternatives. Prepare your sales staff to point out the alternatives if a customer complains about the cost. Researchers at University of Arizona, Arizona State University, and University of Pennsylvania find that this reduces a consumer’s drive—conscious or subconscious—to punish the retailer for the price increase.
  • Consider warning customers of upcoming price increases. There’s certainly the risk they’ll then start looking for other sources for the products they’ve been purchasing from you. But there’s also the opportunity for you to boost sales and book profits sooner if customers decide to stock up before the cost rises.
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Sunday, April 24, 2011

Lie in Wait for Lying Shoppers

The shopper says they’re all ready to make the purchase, but need to work out the details before signing the contract. You think you’re being lied to. If only you had the skills of the Cal Lightman character on the TV show “Lie to Me” or the Jethro Gibbs character on “NCIS.” Then you could pick up those subtle signals that allow you to spot a falsehood.
     The truth is that both those shows overstate the precision with which even trained observers can distinguish the genuine from the fabricated. Still, there are a number of research-based tips that can give you a retailer’s edge:
  • If possible, have the customer seated while you’re standing. In any case, raise your head slightly and extend your arms so your body occupies more space than usual. Columbia University researchers found that this makes it more difficult for a shopper to lie to you.
  • Eyeball the eyes. Liars shift their gaze rapidly, or in an effort to control this sign, the liar will fix their gaze on something aside from your face and will resist looking elsewhere. If you say, “May I show you the item once again before you leave?,” they’ll evidence signs of trouble looking directly at it.
  • Ask brief questions that require the shopper to tell events in an order different from the usual one. “Now that I’ve asked you about your preferences for post-delivery training in product usage, what are your preferences for product delivery?” Researchers at University of Portsmouth in the UK and University of Gothenburg in Sweden found that asking people to tell a confabulated story, but with the events in reverse order, revealed the type of nervousness associated with lying.
  • How do you look and sound when you’re puzzled or dubious? Put that expression on your face, those gestures and posture in your body, and that tone in your voice as you say, “I’m interested in what convinced you to make the purchase.” This serves two functions. First, the hint of disbelief flushes out doubts, so listen and watch. Second, as the shopper recites the reasons for making the purchase, they can convince themselves.
     If you do spot what you think is a lie, don’t confront the shopper. Even if you’re on target, you’d still like to win over the consumer. Use your suspicions as a signal to probe the shopper’s misgivings.

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

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Facilitate Customer Truth-Telling

Saturday, April 23, 2011

Anticipate Ethics Slippage

In my opinion, retailers have an ethical obligation to help improve their local communities. But whether or not you agree, I believe you support the requirement that retailers not cheat their customers.
     Business researchers at Harvard University and University of Notre Dame analyzed instances in which retail businesses did cheat customers. The researchers concluded that in many cases, the owners/operators did not intend to do wrong. The slippage was unintentional, at least at the start.
     One example the researchers give is from the auto repair shops at Sears, Roebuck and Co. With the objective of increasing employee productivity and, some say, wanting to serve customers more promptly, management set a goal for the automotive mechanics: Each was to do at least $147 of billable work per hour.
     The result was not faster work, however. Rather, the mechanics looked for items to repair that weren’t really broken. They also jacked up charges for legitimate repairs.
     The Harvard/Notre Dame researcher classified the ethical lapses. Here is my version, along with suggestions for anticipating ethics slippage in order to head it off:
  • Ill-conceived goals. The Sears auto repair episode is an example. Before setting standards, encourage comments from those responsible for the implementation. Ask them to say how they might meet the standards. Also ask them if they see better ways to set standards that would achieve the retail business objectives.
  • Motivated blindness. A retailer might grant special favors to suppliers who provide the best of the production output, but the retailer doesn’t realize that this can lead to the supplier expecting special favors even if later giving inferior merchandise or services. One remedy is to honestly assess any conflicts of interest in what you do.
  • Indirect blindness. While charging the same prices to customers, a retailer might outsource tasks and fail to monitor the quality and ethicality of the work. The retailer’s objective is increase or maintain profitability when the retailer’s time is tight. But accountability legitimately remains with the retailer even when work is outsourced.
  • Slippery slope. In many cases, a minor transgression is okay, but do check back to ensure the minor transgression doesn’t become a revised base for what is acceptable. Shortchanging the customer by half an ounce at the fish market might be within the range of ethical acceptability. However, monitor whether that becomes two ounces because the salesperson isn’t careful enough.
For your profitability: Sell Well: What Really Moves Your Shoppers

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Friday, April 22, 2011

Drop a Pill When Acting Like One?

Are you or some of your employees treating customers in verbally aggressive ways? Maybe it’s because of a lack of acceptance by fellow workers in the store. If so, social psychologist C. Nathan DeWall at University of Kentucky has research findings which indicate taking a daily dose of 1,000 mg of acetaminophen for three weeks can ease the obnoxious behavior measurably.
     He and his colleagues had recognized how physical and social pain have overlapping effects. Functional MRIs (fMRIs) show that when people take medications that ease their physical pain, they usually also have less activity in brain regions associated with emotional distress.
     The researchers also knew from their prior studies that when someone feels socially rejected they’re much more likely to become hostile, as well as to delay taking care of their businesses and when they do take action, often making impulsive decisions.
     Putting this all together, the Kentucky researchers tested out the effects of the analgesic. It worked. But does Prof. DeWall recommend this remedy? “Definitely not!... (D)rugs aren’t necessary,” he told a Harvard Business Review interviewer.
     I agree. There are better ways to ease the grouchiness that arises from feeling socially rejected. One set of techniques is based on evidence that retail employees have a lower threshold for feeling rejected when they are burnt out on their current job duties. This is a particular risk for the older employee. They’ve been carrying out the same routines for a long time. They also may feel isolated from and by the younger employees.
     Here are some research-based remedies:
  • Give feedback more frequently.
  • Remind the employee of the significance of their job duties to the overall store profitability.
  • Expand the scope of duties so there is more of a sense of working on the same project from beginning to end.
  • Increase the variety of duties and variety of other staff with whom the employee interacts.
     That last remedy ties into the second set of techniques. These involve helping employees to perceive social acceptance. Even a little improvement can help. In other studies conducted by the Kentucky researchers, some participants were told that all four people in a group preferred not to work with them. These participants showed hostility and aggressiveness in their job performance. However, the aggression diminished significantly if a participant learned that even one person in the group wanted to work with them.

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Thursday, April 21, 2011

Park Your Carcass to Learn a Lot

There’s much you can learn from spending time poking around parking lots or from sitting around watching what happens there:
  • If you want people to perceive you as the convenient place to do their shopping, check that the parking is convenient. As you keep your eyes on the movement of cars and people in the lot, notice how easy or difficult it is to enter the lot from the commonly used access streets. During busy shopping hours, how easy is it to find a space that doesn’t require a cross-country hike to reach the doors to your store?
  • How safe do people feel in your lot? Do their posture, gestures, or facial expressions suggest uncertainty or fear? If convenience for your shoppers means your store staying open at night, how well-lit is the lot? If you’re in a neighborhood associated with crime, are there call boxes throughout the lot, or better yet, an assertive patrol by security guards? For daytime shoppers, how many cracks, buckles, and potholes must the shopper navigate around to avoid tripping?
  • How clean is the lot? Research finds that the initial impressions created as the shopper navigates into and around the lot prime their thoughts for when they enter your store premises. If they see clean in the lot, they’re more likely to notice the clean while shopping with you. The parking lot could be considered the true front entrance to your store.
     You might have limited influence on the condition of the parking lot if you don’t own the center in which your store is located. Achieving changes might require joining forces with other merchants who use the same lot or waiting until it’s time to negotiate your lease.
  • All right. Now it’s time to move your carcass to somebody else’s parking lot. Along with regularly walking through your competition’s aisles, walk or drive around their parking lots. What clarity, cleanliness, and safety benefits does your lot offer that theirs doesn’t? How can you let your target markets know about it?
  • Write down the names and phone numbers of the businesses that are in your competition’s parking lots. Then come back to your store and have your outside sales person, you yourself, or somebody else contact these people to say, “Hey, you know what? You’ve got to come down here to our store. We have an excellent trade program.”
For your profitability: Sell Well: What Really Moves Your Shoppers

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Walk the Parking Areas
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Wednesday, April 20, 2011

Violate Policies If Faced with Violence

Customers and staff have been killed. In a press release starting off with, “It was a very sad weekend in retail,” the National Retail Federation noted a shopping mall shooting in Amsterdam, the slaying of two grocery store employees in Minnesota, and a revenge killing at a Dollar General store in North Carolina. In addition, a clerk at a Lululemon store in Maryland was murdered just last month.
     The NRF, taking a lead from the U.S. Department of Homeland Security, strongly suggests that you prepare for such incidents. Train your staff and yourself both in how to promptly evacuate the store and, if evacuation is not safe, in how to hide people in a secure area which has telephone contact.
     To this valuable advice from a law enforcement perspective, I’ll add some tips as a psychologist who has served on workplace hostage negotiation teams:
  • Train staff to be ready to violate usual policies if faced with the potential for violence. Some people become highly rigid in their thinking and behavior when under substantial stress. A tunnel-vision adherence to normal routines—such as questioning whether customers and staff should be allowed in a secured office with accessible cash receipts—can worsen the danger. Let staff know it would be okay to leave registers open, cabinets unlocked, their personal belongings ripe for theft, and so on. The policy is that there is a new policy for the duration of the emergency.
  • Along with this, be sure the training sets a clear command hierarchy and contingency plans. Decisive instructions are essential for avoiding confusion. In addition, customers and staff are more likely to follow instructions delivered with decisive authority. If hostage negotiations do ensue, the negotiator will want to want to know unambiguously who is in charge both inside and outside the area where hostages are being held. As soon as law enforcement arrives on the scene, command is to be handed over to them.
  • Regardless of how the incident is resolved, provide professional post-trauma counseling for staff. Have it available promptly. However, also realize that for some employees—especially those who became highly rigid in their thinking and behavior—the need for counseling may not arise for a few days or weeks.
     I hope this recent cluster of incidents is a statistical anomaly. Be prepared, but also keep a realistic perspective for your staff, your customers, and yourself.

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Use Psychology for Shopper Crowd Management

Tuesday, April 19, 2011

Carve Out an Off-Center Store Personality

Aim for a store personality which fits the neighborhood in which your store is located, but which also is at least slightly distinctive.
     Retail stores come to have a personality in the minds of customers and prospective customers. Some businesses are seen as daring and spirited, while others are seen as cautious and intellectual. It works best when you decide what personality you’d like your store to have and then carefully design advertising, merchandising, signage, staffing, and all the rest to strongly project that personality.
     Some years ago, Stanford University researchers identified five different dimensions that can be used to map a retail store’s personality:
  • Sincere to witty: In what ways is the retailer honest? Wholesome? Cheerful? Teasing?
  • Exciting to predictable: To what degree is the retailer daring? Spirited? Stimulating? Trendy? Responsible? Dependable? Persistent?
  • Expert to inquisitive: In what ways is the retailer knowledgeable? Successful? Calm? Confident? Secure? Imaginative? Curious?
  • Sophisticated to approachable: To what degree is the retailer formal? Assertive? Ambitious? Casual? Sociable?
  • Rugged to luxurious: In what ways is the retailer gruff? Challenging? Cooperative? Trusting? Considerate? Indulgent?
     Fit your store’s personality to how your target market members want to see themselves. That relates to the values of your shoppers. What do they consider to be especially important in their lives? Power and strength? Safety and security? Trust? Perseverance? Playfulness? Craftiness? Friendships? Something else altogether? Weave messages about those values into your advertising and your salesperson-to-customer contacts.
     For example, one lifestyle value among coffee drinkers at retail now is keeping it natural. So Peet’s Coffee and Tea profited with the slogan “Handcrafted Since 1966,” and Seattle’s Best—a subsidiary of Starbucks since 2003—enthused “Choose Organic!”
     However, recent research also indicates that the personality of your store shouldn’t match too closely the personality of surrounding stores. Researchers at Northwestern University and Emory University explored how consumers can tire of lifestyle marketing, in which a product or store brand is marketed as a forum for the customer’s self-expression. Even when the stores adjoining yours are selling completely different product lines than you do, if the personality of your store duplicates too closely that of the others, people are more likely to go to another neighborhood to continue their shopping.
     Just as you want a distinctive product and service mix when it comes to functional attributes, seek some distinctiveness when it comes to lifestyle marketing.

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Monday, April 18, 2011

Augment Loss Prevention with Psychology

An ABC News report about the shoplifting of liquid gold underlines the importance of a multifaceted approach to loss prevention. Liquid gold? That’s the nickname given by law enforcement agencies to powdered baby formula. It’s stolen because the resale value is high, and it’s often used in diluting street drugs.
     Because of the extraordinarily high theft rate, there’s a move to make it a federal racketeering crime. Strict laws and law enforcement do help curb shoplifting and the related crime of employee theft. So do measures such as setting up mirrors to increase visibility, keeping high-value items in locked cabinets, and alternating the direction of hangers on clothing near doors.
     How about having uniformed guards patrolling the aisles of your store? You’re not doing that? No wonder! You’d irritate the devil out of your shoppers, and you’d add to payroll expenses.
     You can limit the expenses and intrusiveness by using what research says about the psychology of shoplifting:
  • Some shoplift for the thrill. Take special caution in stores and areas that generate excitement because of loud rhythmic music, bright colors, and/or fast movement. Recognize that merchandise classes associated with the forbidden are especially likely to be stolen: Tobacco products and underwear are among the most frequently stolen items. Products that are illegal to use are also targets of shoplifters.
  • Some shoplift because affection and attention are missing in their lives. So feel sorry for them and let them steal all they want. No, that won’t work. But there’s evidence that when you treat all customers with respect, concern, and empathy, people prone to shoplifting are less likely to steal from you, even when the opportunity is there.
  • Some shoplift to show off to friends. Doing it on a dare is most likely among teenagers, so without hassling the teens or prejudging, you’ll want to be alert when a group of teenagers enter the store together.
  • Look at shoppers and great them as they enter your store or department. In this way, they know you know they’re there. It’s said that Sam Walton introduced the idea of using elderly men and women as Walmart greeters because they’d be easily approachable by customers looking for assistance, but that Mr. Walton was most firmly convinced to keep the greeters because the losses from shoplifting dropped so dramatically. “Nobody would steal from their grandmother,” he’s been quoted as saying.
For your profitability: Sell Well: What Really Moves Your Shoppers

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Sunday, April 17, 2011

Bet on Consumers Wanting Turnkey Experiences

Las Vegas isn’t your typical retail setting. Still, the economic setbacks in the overall retailing community were suffered by Sin City. Visitor volume dropped about 7%. Per visitor spending dropped as deeply as 30% and even now is 15% below 2008 levels.
     A recent article in VEGAS INC suggests ways that the Las Vegas tourist industry can profit from the changed shopper psychology. The advice is based on two streams of evidence. First are research findings from Stanford University and Clarkson University. Second are the conclusions of a project sponsored by the Las Vegas Convention and Visitors Authority and conducted by business consultants R&R Partners, in which consumers participated in focus groups and evaluators tagged along with tourists to discover how they spend their time and why.
     You probably can adapt the advice, even if you’re operating in a lower-neon district.
  • Consumers seem to be enjoying scrutinizing their savings. Las Vegas can gear up to accept cash and debit cards rather than depending on credit cards. Other retailers could do the same.
  • Brick-and-mortar (B&M) shoppers have become more interested in what the retailer can do for them and less interested in what the shopper is expected to do for themselves. Because visitors travel to Las Vegas for entertainment, the venues should resist temptations to cut back on the entertainment quotient in offerings. On top of that, make it turnkey. Hotel check-in, getting the right tickets for the show, and making reservations at the spa should all be as easy as possible. Other B&M retailers should look for ways to say to the shopper, “Sit back and we’ll do it for you.”
  • Consumers want experiences that include others. What group experiences can you can offer? Product knowledge sessions in which couples, families, and groups of friends participate? Wine tasting. How to plan a vacation. How to set up a model railroad. You might charge a fee to make this a direct source of profit or at least to defray expenses. Or you might offer activities at no fee in order to build footsteps into your store.
  • Keep your promises. The R&R Partners project found that Las Vegas visitors were irritated when paying to eat at a restaurant owned by one or another famous chef, then to find that the food is of inferior quality because the only meaningful presence of the chef was his name.
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Saturday, April 16, 2011

Fly in the Ointment

I’ve been a retailing consultant for enough years to have given out lots of flawed advice:
  • I recommended to a drug store that sales staff stay just a little bit more upbeat than the customer. But the retailer learned that when a customer is highly distraught, it works best if the salesperson’s highly optimistic. This reassures the customer, earning gratitude.
  • Based on research findings from Adelphi University, University of Alabama-Huntsville, and University of Dayton, I advised a general merchandise retailer to use bundled pricing—one all-inclusive price without any separate surcharges—for routine items, but partitioned pricing—presenting an item’s cost as a main price plus one or more surcharges—for luxury items. Later, I realized that I’d forgotten to add, “The research also says that if you ever go into ecommerce, you should use bundled pricing for the luxury items, too.”
  • I advise retailers to make delivery promptly after an order is placed. But there are exceptions. 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 many retail services. Consumers evaluated the price of a locksmith service as a better value when the service took longer than when the lock was picked faster.
     As I’m fishing around for the best advice to give retailers, I can find myself getting hooked on the assumption that what works most of the time will work all of the time. It’s the sort of thing “The Phrase Finder” calls “a fly in the ointment.” If you overhear statisticians using terms like “moderator variable,” “moderating variable,” and “interaction effects,” they’re talking about that same sort of thing. Certain groups of consumers or certain sorts of shopping conditions can cancel out or even reverse the effectiveness of selling techniques which are based on shopper psychology.
     When a retailer says to me, “I tried that once. Never again,” it sounds like superstition. You tried out this technique, which is based on solid research and broad retailing experience, only once, and you’re giving up on it? But I avoid the hook by flying directly into the ointment to identify the reason for the exception.
     I suggest you do the same.

Click below for more:
Be Just a Little More Upbeat Than Your Customer
Use Partitioned Pricing to Highlight Benefits
Slow Down the Sales Process Sometimes

Friday, April 15, 2011

Tax Our Ingenuity to Keep Customers Healthy

In most years, today, April 15, would be Tax Day, the deadline for filing your return with the Internal Revenue Service. But Tax Day 2011 is April 18 instead. That’s because in Washington, DC it’s Emancipation Day, which celebrates the freeing of slaves in the district. Federal law says that Tax Day can’t be on a weekend or holiday, so those who wait until the last moment to file have been emancipated for three more sunsets.
     But our thoughts must never stray too far from levies due to the government, so today I ask you to think about another tax—what researchers at University of Alberta and University of Wisconsin-Madison called a “fat tax.” It’s a surcharge for foods that are less healthy than available alternatives. The warning label used in the research read, “This product is high in fat. It has been taxed due to its less healthy nutritional content. Health Canada.” The study participants were not told until the end of their participation that the label was fictitious.
     The researchers wondered what the effect of the tax and of the label would be on people’s purchase preferences. But before I reveal the results to you, I need to ask why a retailer should be taxing their ingenuity to keep their customers healthy. My answers are that it’s an important contribution to the community and when our customers live longer, they’ve many weeks ahead in which to spend their money with us.
     Now for the findings:
  • Some consumers respond clearly to a fat tax. The additional cost makes them significantly less likely to buy an unhealthy product. However, they also become less likely to buy any product in that category. Their irritation about the fat tax leads to them boycotting a purchase. They may be healthier for it, but you’re losing a sale.
  • Some consumers devote close attention to the warning label not so much because of the fat tax, but because of concerns about their health. In fact, they will pay even more than they would for a fat-taxed product if that higher-priced product doesn’t carry the warning label. It’s with this group that you can make up for the lost sales by having premium priced healthy options.
     There were others who didn’t fall into either of these two groups. However, for all consumers, feeling they have choices leads to them selecting a healthier option.

Click below for more:
Unchain for Health
Ease the Guilt for Adult Unhealthy Eaters
Balance Healthy and Indulgent in Merchandise

Thursday, April 14, 2011

Strengthen Perceptions of Self-Consistency

Involved shoppers return to your store and listen to staff’s advice about trying items and switching to brands that carry higher profit margins for you and can provide superior benefits for the purchaser. To build customer involvement, personalize the selling message:
  • Maintain pleasant eye contact. Your staff shouldn’t be looking harshly at customers, but they should be maintaining eye contact with the customer while talking to them. At the same time, be aware how among some cultures, direct prolonged eye contact is considered aggressive, flirtatious, or worse. In these cases, use briefer and less continuous glances.
  • Call customers by name. This is easiest to do with the regulars who come into the store and talk with staff. In other cases, you’ll see the person’s name on a credit card, need to ask for it when filling out a special order form, or overhear a shopper’s companion call them by name. Be sensitive to whether the customer objects to being called by their first name. It’s usually safer to use the last name.
  • Ask questions that include the word “you.” This is a tactic you can use in signage, not solely in personal selling. “Would you like to improve your golf score?” “When was the last time you sat in a chair as comfortable as this one?”
     However, researchers at State University of New York-New Paltz and University of Nebraska identified a variable that can undercut the personalizing producing an openness to accepting a retailer’s recommendations: It is the extent to which the shopper believes they are consistent in their choices.
     Some shoppers carry a self-image of stability regarding how they assess products and services for purchase. They view themselves as using similar criteria and as probably making the same choices again in the future if the circumstances are similar. Compared to shoppers with a self-image of low stability, the shoppers with high-stability self-images appreciate customized recommendations more and are more receptive to learning from the salesperson.
     How do we change self-images of low stability into self-images of high stability in order to increase our influence? Using questions that include the word “you,” help the shopper describe the criteria they use and recall the instances in which they’ve used those criteria:
     “In the past, what standards have you used in selecting a floral arrangement? How did those standards work out for you in a few instances you remember?”

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

Click below for more:
Personalize the Selling Message
Introduce Unfamiliar Products Like Old Friends

Wednesday, April 13, 2011

Take a Break, Make the Sale

Why eat radishes when you’d rather have cookies? Well, because some psychologist directed you to eat the radishes as part of a research study.
     A more important question for retailers is, “What’s the effect on shopping behavior when a consumer is asked to resist temptation?” An answer to that one comes from “The Financial Page” in the current issue of The New Yorker. The article reports on a set of studies, including a classic from Case Western University involving, yes, tangy vegetables and tempting treats.
     In that study, participants had been asked to skip a meal before arriving at the site, so they were no doubt hungry. Welcoming the participants was the aroma of chocolate chip cookies, which had been freshly baked. Then each participant was assigned to sit in front of their own table for five minutes.
     For one group of participants, the table contained no food. For a second group, the table contained cookies, chocolates, and radishes; these participants were invited to eat whatever they wanted. Participants in the third group also had the cookies, chocolates, and radishes on the table, and they, too, were invited to eat. But to eat only the radishes. This limitation was revealed to the unlucky participants in the third group with the explanation, “You have been assigned to the radish condition.”
     After the five minutes, each participant embarked on a difficult task, paralleling the sort of decision making involved in a highly complicated purchase. What the researchers measured was how long each participant was willing to stay at the task. What they found was that the radish people gave up much more quickly than did the cookie people or the no-food people.
     The New Yorker article suggests that when you’re asking people to do difficult work, give them breaks from resisting temptation. You’ll get better results. The implication for retailers is to give shoppers a brief break from challenging purchase choices. The outcome is likely to be an increase in sales.
     Breaks also increase enjoyment. It’s an example of what psychologists call habituation. Consider the massage therapy category of services retailing. Masseuses report that the client generally likes the massage more when they’re rubbed for a while, pounded for a while, kneaded for a while, and then rubbed again than if there’s no change.
     Habituation is related to age. Changeups improve the enjoyment more for younger than for older consumers.

Click below for more:
Give Your Sales Pitches Changeups

Tuesday, April 12, 2011

Renew for Easter

Based on responses from about 8,000 adults to a survey conducted by BIGresearch, the National Retail Federation is predicting a noticeable hop up in Easter shopping this year:
  • An overall increase of more than 10% in per customer spending over last year
  • Among consumers between 25 and 34 years old, the age group most likely to have small children, an increase of almost 27% in spending
  • By geographical region, highest interest in the Midwest, with 84% of consumers participating in Easter-specific spending, and the lowest among consumers in the Far West, still with 76%
  • Product categories predicted to capture the biggest share of expenditures: Food, apparel, and candy
     Increase your Easter sales by recognizing the reasons for the predictions:
  • Easter honors rebirth and renewal. Consumers fatigued with the recession and prolonged winter weather may be ready to give shopping another chance. Be sure to feature new items among the evergreen standbys in your product mix.
  • This year, Easter Sunday falls later in the calendar than it has since 1943. Spring should be in abundant evidence. Use bright colors, floral themes, and other signs of spring in your ads and signage.
  • There’s even an Easter theme movie this year. “Hop” is just gross enough to keep the kids entertained and at the very top of gross when it came to weekend box office dollar receipts. Look for ways to tie into “Hop” merchandise, big jelly beans, rabbit dolls, and candy chicks.
     No live rabbits or chicks, though, unless you’re confident the purchasers will care well over time for the animals they receive. More generally, with its focus on children, the Easter celebration can be an opportunity to cultivate and educate children into becoming wise consumers.
     University of Minnesota research indicates that a prime time for doing this is when children are ages 7 to 11. Around age 7, children's consumer skills start to blossom. Over the next few years, they become much better at recognizing the benefits made possible by product features, moving beyond a focus on the product features themselves. Their understanding increases for the correlation between money and value. They gain a greater ability to compare products and to do it on more than one dimension (such as ease of use and duration of use) at the same time. Their abilities grow to recognize that more is not always better.

Click below for more:
Cultivate Kids as Future Customers

Monday, April 11, 2011

Ground the Flight of Customer Fears

A while back, Southwest Airlines reinforced their image of wit and excitement. “You are now free to move about the cabin” became “You are now free to move about the country.”
     “Yeah, sucked through a hole in the ceiling. Without a jet pack,” quips Steve Scauzillo, who edits the opinion pages of the Pasadena Star-News. He was referring to the sudden disappearance of a portion of a Southwest 737-300 while flying at 34,000 feet on April 1.
     The airline promptly pulled 79 of their 737’s from service in order to undergo thorough inspections, cancelling about 620 flights and delaying about 2,700 others. This action contrasts sharply with the slow, incremental response about two years ago after a Southwest plane suffered a fuselage break.
     One result this time was that at least three more planes were found to have structural defects. Another result, from a consumer psychology perspective, was that a source of customer concerns was isolated and grounded. Southwest can say it was the 737’s in their fleet that were the problem, and now the 737’s have been checked.
     When you find that a product you’re selling or action you’ve taken has led to fear or grief among your customers, isolate the problem and correct it. If there are repeated media inquiries or if you sense something is important for the customer to know, report what you’ve done. Otherwise, go about your business, allowing consumers’ thinking to move on.
     Researchers at Washington State University and University of Texas-Austin use the term “willful ignorance” to refer to their finding that there’s information consumers would prefer not to know. They say that willful ignorance operates subconsciously and it occurs because handling the full truth would be overly painful.
     This led the researchers to a conclusion that seems strange at first: Consumers who care the most about an issue are the ones most likely to hide from the reality. But it does make sense.
  • The business traveler scheduled to fly on Southwest prefers not to think more about the safety issues, once they’ve heard that the problem’s been isolated and addressed.
  • The furniture shopper who would feel the deepest grief or embarrassment 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.
Click below for more:
Assign Blame Accurately for Damage You Do
Acknowledge Customers’ Willful Ignorance
Space Out Bad News Products on Shelves

Sunday, April 10, 2011

Clear Up Clutter Ambiguities

What can the operator of a small to midsize retail store learn from Walmart, Dollar General, and Best Buy about store clutter?
     To manage it strategically.
     From late 2009 through early 2011, many Big Box retailers tidied up aisles and shelves. One reason was the decision to carry less inventory in economically uncertain times. Then there was miniaturization and digitizing. When you’re selling pocket toys instead of those of traditional build or selling music phones instead of CD players, there’s less need to stuff in the merchandise.
     In some cases, the cleanup came from a realization that consumers were wanting to keep all things more straightforward in their lives, again because of the economically uncertain times. Loblaw Companies Limited—Canada’s largest grocery retailer—rolled out their “Clutter-Free Check Out Lanes,” and Superquinn in Ireland moved in that same direction.
     A New York Times article said that Walmart cut down on the clutter in order to attract shoppers from Target. End caps got narrower, the floor-toward-ceiling power aisle shelves got much shorter, and people coming from opposite directions could actually navigate two shopping carts comfortably past each other.
     Walmart shoppers loved the spaciousness. Customer satisfaction surged. On the other hand, the size of the average sale plummeted. The NYT article reported how Walmart then began plumping up the racks and cluttering up the aisles. Around the same time, Dollar General decided to raise shelf heights, and Best Buy began thinking about filling their roomy aisles with bicycles. The motto seems to have become, “If they trip over it, they might decide to buy it.”
     There’s something else at work, too: Research says clutter implies low prices. And this is where you can make a strategic decision. You could go for the clutter to play to the increasing price sensitivity of consumers worldwide. Or you could distinguish yourself and have the opportunity to set higher prices by holding out for neatness.
     Don’t overdo it, though. Consumers need sufficient complexity to stay engaged. A classic and repeated finding in consumer psychology is that we want to introduce enough incongruity, enough surprise, so that the shopper slows down for a moment to appreciate the sales message. If the layout is overly sterile, the viewer processes it all immediately and then moves on—beyond the range of a possible add-on or upgrade that would benefit both the shopper and the retailer.

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

Click below for more:
Less Store Clutter, More Store Branding
Manage Store Clutter Strategically

Saturday, April 9, 2011

Comfort the Confused

When a loved one dies, it can be a confusing time. A marketing point used by funeral homes in selling preplanning services is that preplanning eases the confusion for the bereaved.
     Another approach is offered by online funeral services. A Bloomberg News article featured Basic Funerals and Cremation Choices, founded in 2009 and already profitable by 2010. The benefits touted by the company include lower prices than at brick-and-mortar mortuaries and the comfort of making arrangements while at home, away from any face-to-face pressures to upgrade. Both these promised benefits are illustrated by a menu-style quote calculator on the site that covers extras like premium urns and caskets, limousine service, and event catering.
     A business such as Basic Funerals and Cremation Choices is most likely to be successful if potential customers have become acquainted with the company before the time of need. This is because consumers who are confused will be drawn toward retailers who have left memory traces of easing confusion. This is by no means limited to funeral homes. Hairdressers, tuxedo shops, and hardware stores can be places where the befuddled know to go for guidance.
     Whatever you sell, do it in ways that counsel the confused. Be ready to take the role of a superhero, coach, or guru:
  • The superhero retailer assumes responsibility for rescuing us. The customer expects the superhero to go above and beyond what most salespeople are able or willing to do.
  • The coach reassures us. The customer expects the coach to be available until the problem is solved and to encourage the customer to buy whatever is needed to solve it.
  • The guru brings experience and a sharp mind. The customer expects the guru to pretty much know the customer's needs without asking lots of questions.
     Recognize the true sources of the confusion. For example, with funeral homes, the piercing grief is sometimes experienced against a backdrop of positive emotions. The loved one with the lingering illness is no longer in pain. Relief. The extended family has gathered together. Joyful warmth. Maybe the inheritance. Excitement.
     Some cemeteries across America are acknowledging the emotional mix by amusing well in advance of the confusion. They’re holding band concerts, barbeques, and sky-diving exhibitions. The main objective is to position cemeteries and mortuaries as pleasant places that are able to be of service in the future. “Meet us before you need us.”

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

Click below for more:
Analyze the Role the Customer Expects
Engage Future Customers

Friday, April 8, 2011

Increase Purchase Quantities with Discounts

Quantity-dependent price discounts can take two forms:
  • 20% off if you buy at least five packages
  • 20% off. Limit five packages per customer
     What’s the effect of those on the number of items purchased? Research at Bryant University and University of Illinois finds that…
  • When customers are required to buy a minimum quantity to achieve the discount, they are more motivated to purchase multiple items.
  • When customers are allowed to purchase only a limited number of items at the discounted price, they are less motivated to purchase multiple items.
     Consumers live up or down to the conditions of a discount offer. In another example, researchers at Massachusetts Institute of Technology gave promotional coupons to customers who came into a convenience store. For some, the offer was, “Spend at least $6 and get $1 off.” For others, it was, “Spend at least $2 and get $1 off.”
     The result: Those required to spend at least $6.00 did that, while those required to spend only $2.00 didn’t exceed that amount by much. To make sense of this, it’s important for me to tell you something else: The researchers knew that purchases at the convenience store averaged about $4.00. So it appears that the “Spend at least $2” customers were actually spending less than they would have without the coupon.
     But the Bryant/Illinois research goes beyond this to suggest that the nature of the motivation will spread to other purchase decisions on that same shopping trip. People who buy five of the items so they can earn the discount will be more likely to buy in quantity other items on their shopping list—whether or not those items are discounted. Customers who stopped at buying five items because they don’t get a discount beyond that quantity become less likely to buy in quantity other items on their shopping list.
     The “20% off if you buy at least five packages” is a straightforward way to increase the size of the total purchase. It is less confusing than, for example, the type of tensile pricing that would say “Up to 20% off on all items.” Researchers at Wayne State University and University of Memphis find that this does increase the size of the sale, but also have raised questions about whether tensile pricing misleads elderly consumers into believing they will be receiving a higher discount than is actually the case.

Click below for more:
Keep Discount Conditions Strict Enough
Maintain Purchase Momentum in Customers
Sweeten Scarcity with Ample Warning
Advertise Tensile Pricing Selectively

Thursday, April 7, 2011

Look to Teens in Low-Income Families

When a teenager and his or her mother are shopping together, who will be making the primary purchase decisions? With low-income families, researchers at University of the West of England and University of Stirling suggest you look to both, but to the teen more than to the mother.
     In the study, 524 mothers answered questions about how savvy they considered their child to be at shopping for a summer holiday and for clothing the child would wear. Mothers from lower socioeconomic circumstances tended to see their children as skilled consumers who could be depended on to manage money and make wise purchase decisions. This was especially true when the child was older and female.
     When considering the list of item benefits, the teen might place them in a different order of importance than does the mother. Still, the teen’s final purchase preferences often reflect the mother’s. Both genetics and upbringing influence things like favoring innovative products and making compromise choices.
     Here are selling tips for the low-income teenage decision maker:
  • Offer smaller package sizes at lower prices. I recommend against abandoning your largest package sizes, though. Low income customers usually realize they’ll get better value from those, and it helps their spirits to think about purchasing the larger sizes in the future.
  • Carry low cost healthy merchandise. The research says that one of the greatest difficulties for low income consumers is denying the requests of children, and this can become even more difficult when the decision maker is the child. Among the items you carry should be ones that parents can feel good about allowing their children to buy and that the children will appreciate, even if the items aren’t the children’s favorites.
  • Present the appropriate benefits to each participant in the decision. For the prospective purchaser, the benefit might be cost, while for the prospective user, it might be ease of use. With adults, focus on each participant as you present the benefits that will be of interest to that person. With children, be sure to look at the child when discussing benefits of interest to them, but also spend time looking at the responsible adult so it’s clear you’re not aiming to undercut the adult’s dignity.
  • When low-income family members shop together in your store, allow them privacy to discuss purchase decisions on the sales floor and even—briefly—at the cash/wrap.
Click below for more:
Identify Influencers in Family Decision Making
Give Low Income Customers Dignity
Attend to Genetic Influences in Selling
Watch Out for Discrimination

Wednesday, April 6, 2011

Stick It to Shoppers with In-Store Experiences

In year 2008, the stick was inducted into the National Toy Hall of Fame, headquartered in Rochester, New York. Thus, the stick joined the likes of Tonka Trucks, Mr. Potato Head, and Barbie, each one an inductee from an earlier year.
     I’m talking here about a plain stick. Not a pogo stick, a hockey stick, or a pool stick. Each of those others could be considered a plaything. But as the National Toy Hall of Fame induction announcement makes clear, so can the plain stick. In the mind of the child, the stick becomes a sword, a baton, a big league slugger’s baseball bat, or some other variety of magic wand. In the hands of the playful artist, sticks are a foundation for collages, sculptures, and structures. Plus sticks are often just outside the door, free for the taking.
     So why would anybody pay $30 for a stick? Well, people do when the stick is imbued with valued memories, making it more than only an object. And thereby is how this becomes an object lesson for you, the retailer. A recent post at Global Toy News marvels at the $30 tag on a Harry Potter wand—a basic stick in a simple box—for sale at Universal Studios in Orlando, Florida.
     What’s being sold with the stick here is the value-added of the memories of a day at the amusement park, along with a dash of celebrity endorsement. Another example from the world of toy sales is provided by Build-A-Bear Workshops. With over 400 locations on five continents at last count, the stores can be considered testimony to the success of allowing purchasers to personalize their purchases. Each child selects from a range of items in the store to design their own stuffed animal, and upon completion of the toy, the child signs the animal's birth certificate.
     The cost of the bear? Maybe $20. The cost of the raw materials? Much less. The value of the experience and the memories? Much more.
     Sure, there are issues of business ethics here, particularly when selling to children. Is $30 ever a fair price for a plain stick in a simple box? Check that the experiences you’re providing to your customers—children and adults—in your store are distinctive. From the d├ęcor, the sounds, and even the fragrances to the sales staff’s sensitivity to the customer’s needs, ensure the experiences are memorable.

Click below for more:
Personalize the Shopping Experience
Celebrate the Celebrity Appeal
Educate Children as Consumers
Deliver Fragrance to Customers Who Like It

Tuesday, April 5, 2011

Flood with Attractive Country-of-Origin Images

Last Thursday, I ate dinner at Sterling’s, the white tablecloth establishment in Reno, Nevada’s Silver Legacy hotel. I was in the area to fulfill my intensive-format course responsibilities on the teaching faculty at University of Nevada-Reno College of Extended Studies.
     As I was looking over the Sterling’s menu, the waiter asked if he might tell me about “a very special special.” Without waiting for my answer, he announced it was a Kobe beef hamburger. He then leaned down to speak more softly into my ear. “It is priced at $39 tonight.”
     I was ready to reply, “Does the $39 include the pickles?” But what stopped me was the realization, popping out of my longer-term memory, that Kobe beef comes from only one country—Japan, and my more recently stored memory of all the nuclear trauma there. So I replied, “Does the Kobe beef hamburger shine in the dark?”
     Judging by the glance I received from the waiter, I concluded mine had not been a white tablecloth question.
     Researchers at Australia’s QUT Business School and New Zealand’s University of Auckland probably would have suggested, based on their research findings, that my waiter should have started off by asking me to visualize pleasant scenes of Japan, or even of Japanese movies I’d enjoyed in the past.
     Shoppers associate certain countries of origin with desirable product characteristics. Sometimes the association is product-specific: Cheeses and perfumes from France have a special cachet, as do cutlery and timepieces from Switzerland.
     The association between country of origin and perceptions of quality can change. Decades ago, many American consumers avoided any item they learned was manufactured in Japan, since Japan was associated with slapdash production.
     Then publicity surrounding Japanese attention to quality assurance and the high marks given by objective raters—particularly to Japanese-manufactured automobiles—led to American retailers considering a “Made in Japan” label as a selling aid. However, with the troubles Toyota was having last year, Japanese quality was again questioned.
     The QUT/Auckland research found that when country-of-origin information elicits an immediate negative reaction in a consumer, the emotion can be eased by asking the consumer to visualize positive scenes involving the country. Other research finds that similar effects can be obtained when the consumer is surrounded with pleasant memorabilia from the country.
     In other words, I’d have been somewhat more likely to order the Kobe beef in a Japanese-themed restaurant than at Sterling’s.

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

Click below for more:
Feature Country-of-Origin Advantages
Feature Underappreciated National Origin Products

Monday, April 4, 2011

Thank Shoppers Freely

Frequent shopper programs were originally designed around thanking a customer for their loyalty. The notion was that when a retailer expresses gratitude, the consumer wants to come back to buy soon and often. But more recently, the sharpened price sensitivity of the shopper and the acute cost sensitivity of the retailer facilitated the birth of the premium shopper card, which for a fee, offers additional benefits to the shopper.
     At Sam’s Club, the premium card program gives individualized discounts. Computer-aided predictive analytics determine what items would be attractive to each customer, based on their prior purchase history, and then offers discounts on those items. At grocery retailer Big Y, the $20 annual fee grants you the opportunity to claim discounts on items not discounted for customers belonging to the regular loyalty program. The $14.99 upgrade at GameStop gives you an additional 10% discount on all purchases.
     As frequent shopper programs morph into upgraded discounts for a price, check that you and your staff all upgrade your attention to thanking all customers for their patronage. Do it freely. No $20 or even $14.99 fee is required from the customer in order to see and hear how grateful store staff are for the help in paying the staff members’ salaries.
  • The premium program members should receive recognition for their extra commitment: “Thank you for being a VIP card member.” But does every customer hear, “Thank you for your business,” or does the customer get only the robotic “Have a nice day”?
  • When the customer says, “Thank you,” as many will when handed their receipt, do staff go one better than “No problem” to say something like, “And thank you!”?
  • How often do you send thank you notes to your regular customers? You can get names and addresses from those loyalty program registrations, special order forms, and personal checks. In a time we’re all competing for the consumer’s money, time, and advocacy, the special touch, such as a note, can give you a profitable advantage.
     Staff are more likely to express gratitude to customers when the staff are themselves shown gratitude by their managers. Those on the sales floor are your face to the public. Many have had to deal with stress-filled customers’ faces during this time of economic setbacks. Those in the back office have been keeping the inventory and the receipts where each is supposed to be.

Click below for more:
Sell Upgraded Loyalty Programs
Personalize Discount Offers
Say Thank You, Dear
Go for Customer Gratitude and Guilt
Help Ecommerce Customers Thank You

Sunday, April 3, 2011

Display the Signs of the Times

At a lemonade stand—that fundamental incubation engine for retailing entrepreneurs—browsers were greeted with a sign. For some of the participants in this Stanford University study, the sign read “Spend a little time and enjoy our lemonade.” For another group, the sign read, “Spend a little money and enjoy our lemonade,” and for a third group, simply “Enjoy our lemonade.”
     The researchers were comparing the effectiveness of a sales appeal that centers on spending time with one that centers on spending money. They knew that consumers don’t like to waste either time or money. They also knew that both consumers and retailers consider time to be more perishable than money. Unspent money can be spent on something else later, but unspent time is useless as soon as the calendar turns to the next day.
     Researchers at University of South Carolina found that when consumers spent money to earn a reward, they were equally likely to use the reward in the future as in the present. But when consumers spent time to earn a reward, they were much less likely to use it in the future than in the present.
     What the lemonade stand researchers found is that people who responded to the time appeal expressed more satisfaction than did the customers responding to the money appeal. Parallel findings came…
  • With university students asked to think either about the amount of money they spent on their iPod or the time they spent in purchasing it.
  • With restaurant patrons asked to think either about the amount of money they spend eating out or the amount of time they spend eating out.
  • With automobile owners asked to think either about the amount of money or the amount of time they spend in car care.
     In each case, the consumers who were prompted to think in terms of time would express more satisfaction with their purchases than did the consumers asked to think in terms of money.
     As a general rule, then, remember to talk to customers about expenditures of time: The time they can save in making the purchase from you rather than shopping around more. The quicker learning curve if they purchase the training services you offer.
     But the researchers did find an important exception to the general rule: Status-conscious consumers shopping for status-display items were more interested in spending money than in spending time.

Click below for more:
Motivate Shoppers Using Their Time Benchmarks
Attend to Negatives When High Time Pressure

Saturday, April 2, 2011

Ventilate Frustration When Promoting Self-Control

Retailers ask shoppers to exert self-control:
  • Weight-loss programs, for example, keep their customers by convincing the customers they can make sacrifices and then seeing to it that they do.
  • Merchants who allow purchasers to pay off an item over time, such as on layaway, depend on the person disciplining themselves.
  • When the retailer is selling to children who aren’t footing the bill, the retailer almost comes to expect the child to say, “I don’t want this one or that one. I want all of them, and I want all of them right now.”
     In those sorts of situations, strengthen the relationship with the customer by providing outlets for frustration. Even something as small as allowing the customers to ventilate their anger briefly can help. And realize that something even as small as needing to make a series of choices can lower the frustration threshold.
     Researchers at University of Minnesota and Florida State University asked a group of consumers to declare shopping preferences: “Would you rather have this red T-shirt or this blue T-shirt? and on and on. An equivalent group of consumers were asked instead to rate the items: “How would you rate this red T-shirt on attractiveness?” and on and on.
     Each of the study participants was then asked to perform what amounted to a self-control task, such as drinking a healthy, but terrible tasting, beverage. The researchers found that the consumers who had declared their T-shirt and other preferences showed frustration much more quickly on the subsequent self-control task.
     Picking up the thread from there, researchers at Northwestern University and University of California-San Diego documented how shoppers who exert self-control want to ventilate anger. Study participants who convinced themselves to choose an apple over a chocolate bar as a snack became more likely to later prefer to see a movie about revenge than a movie missing that theme. Those who chose a reward of groceries over a reward for a spa session showed an elevated interest in looking at angry faces instead of fearful ones.
     When the shopkeeper acknowledges the shopper’s frustration, this can ease it. But keep it brief and end on a positive note. Research at University of Maryland and Yale University indicates that too much talking will lock into the shopper’s mind the anger they’re experiencing, and those negative memories make it less likely they’ll buy from you in the future.

Click below for more:
Avoid Locking In Bad Moods
Lock In Customer Gratitude

Friday, April 1, 2011

Accommodate Disabled Shoppers’ Psychology

I’d be the perfect April Fool if I gave you legal advice about the revised Americans with Disabilities Act (ADA) regulations taking effect this month. I’m a psychologist, not an attorney. So instead, I’ll offer advice about how to best integrate the new ADA rules into your brick-and-mortar retail operations from the perspective of shopper psychology.
     The fundamental motivation is that about one out of five potential retail customers has a disability, as defined by ADA. The fundamental guideline in accommodation is to respect each disabled shopper’s dignity.
  • As with other customers, welcome the disabled shopper to your store. Welcome any service animals—such as guide dogs—as well by recognizing they are on the job. Distractions make the job harder. Welcome the human companions. For instance, under the new regulations, if you provide dressing rooms for customers, there must be provision for a disabled shopper to have a companion who can assist the shopper in trying on clothes whenever necessary. A chair for the companion would be a nice touch.
  • Listen for the disabled shopper’s requests for special assistance. Then collaborate with the shopper in deciding how you can reasonably accommodate the requests.
  • Anticipate the disabled shopper’s unstated distinctive requirements. With obvious disabilities, such as the person who enters in a wheelchair, be ready to assist in getting items from higher shelves that other customers would be able to reach easily. Also be alert to less obvious disabilities, such as the adult customer who needs help reading labels because of partial blindness or intellectual deficits.
  • Ask questions, but with minimal intrusiveness and a recognition that most disabled people want to do as much as possible on their own. “How may I help you?” is a good start.
  • Consider the extra attention as an opportunity to close additional sales on items the disabled customer and their shopping companions could benefit from having. When the restaurant server is reading menu items to the blind patron, it should be with a spirit of giving a wonderful dining experience, not with the attitude of being bothered.
     Want to know more? An excellent resource is ADA Update: A Primer for Small Business, published by the U.S. Department of Justice. That primer cites research showing how retailers who accommodate the psychology of disabled shoppers earn strong customer loyalty. It’s good business ethics and just good business to do it.

Click below for more:
Use Closed-Ended Questions Selectively
Deal with Compulsive Shopping Disorder