Monday, April 23, 2012

Examine the Magnitude of Differences

When you’re told that changing your way of doing business can make a difference in your business, ask how big a difference. After all, making changes consumes resources.
     I give you that advice after reading a recent report from social commerce consultants Bazaarvoice. The report supports some of what we expect: Women who buy in-store are happier with their purchases than are men who buy in-store. Men like buying online because they find in-store shopping to be a hassle and the liking of the experience spreads to liking the products more.
     The report also presents provocative tidbits:
  • Consumers ages 65+ have a stronger preference for products purchased online over products purchased in-store than do consumers ages 19-24. Retailers should welcome older shoppers to purchase online.
  • Asking purchasers to post online reviews of their experiences allows the retailer to continually improve. However, in-store purchasers receive an e-mail asking them to post a review only 45% of the time, while online purchasers receive such an e-mail 80% of the time. Still, in-store purchasers are just as likely to give feedback online as online purchasers. Retailers don’t need to depend on an e-mail if they ask in-store customers face-to-face and via signage to contribute reviews and suggestions.
  • About 70% of shoppers say they use smartphones while in the store. This suggests the in-store salespeople aren’t giving the shoppers enough of the right kinds of information.
     In my opinion, a difficulty with the Bazaarvoice report, however, is insufficient attention to the magnitude of differences:
  • Ceiling effect. Satisfaction scores can go only so high when you use a five-point scale. Although consumers ages 65+ reported a stronger preference for products purchased online over products purchased in-store, the difference is 4.34 versus 4.06. Both of these are more than 4.0, which indicates very good satisfaction. The corresponding figures for the respondents ages 19-24 were 4.48 versus 4.40.
  • Percentages without reason. A classic finding in consumer research is that percentages are easier than raw frequencies for a person to understand and remember. But that ease of comprehension sometimes masks the meaning of the raw numbers. The Bazaarvoice report says that iPad users spend nearly 16% more time on retail websites than do other tablet users and mobile users. But the difference is 5 minutes versus 4 minutes 19 seconds. Forty-one seconds is 16%, all right. Is that significant enough to guide a retailing strategy? Maybe not.
Click below for more:
Recalibrate for Shopper Gender Trends
Overcome Gender Stereotypes
Let Customers Take Their Time
Choose Between Percentages & Frequencies

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