Sunday, October 14, 2012

Pleasure the Practical Shopper

The NPD Group, Inc., famed for their projections about retailing seasons, has concluded that in the months ahead, most consumers will be seeking the practical over the exotic. The news here is not that preferences have changed. For a few years now, people have been seeking practicality as a justification for their purchases. The news is that frugality fatigue hasn’t substantially bent this mindset.
     NPD also reports that 10% of holiday shoppers say they plan to spend more this year than last, compared to 9% in the 2011 survey. About 23% say they plan to spend less, compared to 27% last year. It’s a positive trend, but insufficient to erase a drive for utility.
     Profit margins average higher for indulgent than for commodity products. We’re pleased to sell practical products, but if the shopper can afford them, we’d like to add luxurious items to the basket. Here are some research-based tips for pleasuring the practical consumer:
  • Tell shoppers the practical advantages. They're ready to spend money, but not a lot and only if they're convinced of utilitarian advantages. Since around 2009, shoe shoppers have been going for durability and for multiuse capability. What practical advantages of your indulgent products can you sincerely present to shoppers to help them reduce resistances to purchase? 
  • Avoid the trap of thinking all shoppers are avoiding luxury. NPD is saying that most, not every one, is. For the affluent shopper, luxury can be for reward and show. Let these shoppers know how this indulgent item recognizes accomplishment and portrays exclusivity. To appeal to the motivation, sell items on which the luxury brand name is conspicuously displayed whenever the item is used in public. 
  • Bundle utility with hedonism. Researchers at Stanford University and Yale University noted the growing popularity of retailers selling bundles. International vacation frivolity is paired with continuing education courses by cruise lines and with surgical procedures by medical care retailers. The clothing store packages a fun outfit with a work uniform. The Stanford/Yale research team found that the way in which the bundle pricing is presented influences the bundle’s salability. Specifically, it’s best to emphasize a discount on the hedonic—the pleasure-oriented—parts. The cruise line and the medical care retailer should compare the usual cost for the vacation frivolity with what the consumer pays when it’s part of the package. The clothing store should feature the savings on the fun outfit. 
Click below for more: 
Adapt Lessons from Other Retailers 
Stay Ready to Sell Luxury 
Bundle Utility, Discount Hedonism

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