Wednesday, February 29, 2012

Brand Love for What Shoppers Experience

If you want people to say they absolutely love anything having to do with your store, recent University of Michigan research findings could help you out. You see, the researchers found that a consumer’s sensation of brand love can arise from different sources. Studies from a while back at Arizona State University and Texas Christian University came up with the same conclusion regarding what they called “love-smitten consumers.”
     Here’s my adaptation of what was found and how to use the information. One set of factors has to do with characteristics of the shopping experience:
  • Self-store integration. Show how your store is compatible with the values held by shoppers. Almost all shoppers value staff expertise. Your shoppers love being served by experts. They judge the salesperson’s expertise even before the two start talking. The salesperson’s dress and body language say a lot as the prospective customer asks, “How much does this salesperson look like somebody I’d like to be?” If the store is busy, does the salesperson appear to have things under control? If so, that’s the mark of an expert.
  • Positive emotional connection. When the shopper is happy, reflect the happiness. When the shopper seems sad or angry, show concern. Have staff greet customers and, to the degree possible, call them by name. We each love to hear others say our name as long as it’s said to support us.
  • Long-term relationship. Control staff turnover so the repeat shopper feels they’re entering a familiar place.
  • Separation distress. Offer an appealing distinctiveness so that your customers think long and hard about starting to shop somewhere else instead of at your place. The Arizona/Texas researchers spoke of a passion evidenced in strong urges to visit, even if only to look.
     Other factors have to do with enduring characteristics of the consumer:
  • Feelings of passion about everyday activities. Coach sales staff to listen attentively when shoppers express urges to do business with your store.
  • Confident certainty. Respect the shopper’s opinions. Also be there to buttress against fading certainty. Facilitate the brand love for your store by including some comfort products and indulgent services in the mix you offer.
     Brand love for your store counts for a lot. The Michigan researchers found that it was even more important than the consumer’s judgment of merchandise quality in predicting the consumer’s praise of your store to others and resistance to believing criticisms of your store.

Click below for more:
Build Store Advocacy Beyond Customer Loyalty
Love Your Role as Store Matchmaker
Break Up with Customers Graciously

Tuesday, February 28, 2012

Effect Endowment via Customer Coproduction

When your customer participates in the production of a product she’ll be using, she’ll like the product more. Her attraction to the store or website where she purchased the product also will rise.
     Researchers at Norwegian School of Economics found that when consumers prepared a meal themselves rather than having it prepared for them, the evaluation both of the meal and the raw ingredients climbed. Not only that, but the consumers’ reports of the degree of saltiness and spiciness they preferred in a meal changed toward whatever the level of saltiness and spiciness were in the meal they had prepared. These consumers were giving themselves reasons to savor what they’d created.
     The lesson for retailers from research findings such as these is to invite shoppers to participate in the design of products they buy and the delivery of services they purchase. One reason is that the product or service will then be more likely to reflect the characteristics of the consumer. Another reason is that the invitation to coproduce prepares for the “endowment effect.”
     The endowment effect refers to people placing a higher value on objects they feel is their own than on equivalent objects that they do not. Among other consumer behaviors, it helps explain why people resist selling used items at a price others will find attractive and why people hesitate tossing foods with an expiration date from last week when they wouldn’t eat the same food at a friend’s house if the expiration date has passed.
     The endowment effect is set off when the purchaser takes physical possession of the product. In a bricks-and-mortar store, this often occurs before the customer pays for the product, as he grasps the product to place it in the shopping cart or as he carries it to the cash/wrap.
     With ecommerce—as with phone and mail orders—the purchase occurs before physical possession. Researchers at California State University-Sacramento found that when a direct marketing customer has confirmation of payment and shipment, there are signs of the endowment effect, but it is not at its strongest until the customer is holding the product.
     Remember to present the coproduction offer as an invitation to the shopper, not as a requirement. Many consumers prefer to purchase turnkey solutions, with the retailer taking full responsibility for production decisions. There are plenty of diners who appreciate a restaurant meal much more than their home-cooked ones.

Click below for more:
Reconfigure Your Own Endowment Effect
Personalize the Shopping Experience

Monday, February 27, 2012

Lift Up Your Local Community

Support your community. At the base, this means respecting business fundamentals so that you maintain profitability sufficient to prosper for the long term. You can’t serve your customers and employees if you close your doors.
     Beyond this base, always have in mind ways you can lift up your local community by contributing. For the past couple of years, Panera Bread has been doing this with a group of pay-what-you-can cafés. Panera is not alone. Another model for what are being called “community cafés” is JBJ Soul Kitchen in Red Bank, New Jersey, which opened last October. According to the Detroit Free Press, more than twenty community cafés are operating around America.
     From an organizational psychology perspective, here are keys to making programs like these work for you:
  • Set clear objectives. As examples, the Panera Bread objectives might fit your community support projects. The retailer wants to cultivate gratitude in all the customers and from the local community. Panera wants to project a caring business personality, but also an uplifting personality. The objective is not to be a permanent respite, but instead to help people through tough times. Signs in the cafés read, “We are not about a handout. We are about a hand up for those who really need it.” At JBJ Soul Kitchen, the objectives include serving healthy food to people who might not have it easily available and encouraging customers to socialize. As a project of the Jon Bon Jovi Soul Foundation, a primary objective is to break the cycle of community poverty.
  • Enforce clear policies. At the Panera cafés, patrons are expected to have no more than one free meal a day. At JBJ Soul Kitchen, diners are expected to either donate at least $10.00 per meal or volunteer time to work in the kitchen. Note that the policy to be enforced is for all those present to have the expectation. Nobody is refused a meal for a failure to adhere to the expectation.
  • Know when to stop. As a business person, you’ll want to see return on your investment. How will you know when the job has been done? When has the project outlived its usefulness? Set time limits for achieving the clear project objectives or for checking on the degree of achievement. Check all around that the managers assigned to the community project don’t perpetuate the program mostly in order to perpetuate their employment.
Click below for more:
Serve the Underserved
Show Commitment to the Underserved

Sunday, February 26, 2012

Marry Intentions to Employee Engagement

Engage your store staff. Correlational research conducted by the Kenexa High Performance Institute (KHPI) in Minneapolis and London concludes that engaged retail employees increase sales volume. KHPI also reports that employees in the retail industry show the lowest levels of engagement across all business sectors.
     In the research, employee engagement among more than 1,000 employees was assessed on four criteria:
  • Satisfaction with the store as a place to work.
  • Willingness to refer a good friend or family member for employment by the store.
  • Lack of interest in looking for other employment.
  • Pride in telling others about employment by the store. Highly-engaged employees are twice as likely as less engaged employees to say the financial performance of the store is better now than it was a year ago.
     Because the KHPI study was correlational, it doesn’t adequately specify cause-and-effect. For instance, it could be that retail businesses which are genuinely more financially successful attract and retain committed employees. Or it could be that engaged employees say the business is doing well, even when it is not. Or it could be that committed employees add profitability to the business.
     Other research findings suggest this last one is the correct interpretation, so take the opportunity to increase employee engagement using these research-based tactics:
  • Provide leaders that employees see as competent and confident. In stores with high employee engagement, managers are described as trustworthy, honest, and caring.
  • Coach employees to balance work and the priorities from their personal lives. Ironically, doing this increases commitment to the work priorities. Measures such as allowing flexible work schedules and providing employee assistance programs help.
  • Leave employees with the belief they’re paid fairly. The feeling of fairness is more important than the dollar value of salary and benefits. But the two are certainly related! People who are paid more are more likely to feel they are paid fairly. There’s a time for a pat on the back and a time for a pat on the wallet. Beyond this, though, is taking opportunities to discuss with each employee how her or his pay level was determined and being ready to answer employee questions like, “What kinds of things might I do to get paid more?”
  • Welcome innovative ideas. Employees are more engaged when they see that their suggestions for change are carefully considered and, if an employee’s idea is not used, the employee is told why.
For your profitability: Sell Well: What Really Moves Your Shoppers

Click below for more:
Staff Your Store for Customer Need Knowledge
Hire Overqualified Candidates

Saturday, February 25, 2012

Enable Shoppers to Revisit the Already Done

“Been there, done that” probably makes top ten lists of trite phrases. Which indicates there’s truth in the notion that consumers resist revisiting experiences they’ve already had in your store.
     How then to explain an observation made in a New Yorker article that young children love repetition in television programming? Esteemed shows like “Dora the Explorer” and “Blue’s Clues” invariably follow a strict formula.
     The developmental psychology explanation is that repetition gives children a sense of security. The New Yorker article takes a slight angle on this, saying young children aren’t bored, as adults would be with repetition, because each time the young child watches the program she experiences it in a somewhat different way.
     So the way to explain the observation about repetition is that the article is discussing young children, while “Been there, done that,” applies to all adults.
     Maybe not. The New Yorker article also points out the highly formulaic format of successful adult TV programs like “Law and Order.” Researchers at American University, University of Arizona, and Northwestern University muse on why people will sometimes read the same book a number of times, watch the same movie repeatedly, or go back to the same place and do the same things again. Is it that, like the young child, these people are experiencing it in a different way during each revisit?
     Analyzing in-depth interviews with consumers in the U.S. and in New Zealand, the researchers identified a set of explanations:
  • People refresh their memories for favorite experiences
  • They seek out details they missed before due to the limitations of human attention
  • They want to give the item another chance for a positive impression because of others being surprised at their report of a prior negative experience
  • They’ll enjoy being there while friends encounter the movie or destination for the first time
     Novelty has a major appeal for shoppers, and so does nostalgia. Australian entertainer Peter Allen thought enough of the saying “Everything old is new again” to coauthor a song by that title.
     You can attract shoppers by offering a never-ending panoply of new experiences. But that can get expensive. Temper the change with comfortable repetition. The State Fair visitors may rarely be certain what additional item will be offered up fried this year, but they can always take comfort in there being fried something. Comfort until they go on the roller coaster.

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

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Use Both Repetition and Progression in Ads
Prolong Your Reputation as Cutting Edge

Friday, February 24, 2012

Meditate on Happiness

We want our customers to leave happy. But as the best-selling book The Happiness Project and movies like “Happy” document, different strokes work for different folks.
     Researchers at Università Commerciale Luigi Bocconi in Milan, Italy concluded that gratitude caused customers to come back again and praise a store to others. However, the degree of customer happiness didn’t make a difference. Of course, maybe those researchers hadn’t defined customer happiness accurately.
     Another set of researchers—at University of Pennsylvania, Stanford University, and Massachusetts Institute of Technology—find that what contributes to customer happiness is influenced by whether the customer is contemplating the future or meditating on the present. The future-focused say they’re happy when the store experience is exciting and enthusiastic. The here-and-now customers are happier when the store experience is calm, peaceful, and serene.
     In the study, consumers were offered choices in tea, bottled water, and music. The future-focused participants were more likely to select “a refreshing peppermint blend” over “a relaxing blend of chamomile and mint,” the bottle of “Pure Excitement” water labeled in bright orange over the “Pure Calm” one labeled in green, and the more upbeat version of the song “Such Great Heights.”
     The researchers then compared results for participants ages 18 to 25 years old with results for participants ages 50 to 68 years old. It was found that the younger adults were more future-focused and the older ones more present-focused, and the consumer preferences were in accord with this.
     There are broad differences within each group. The overall conclusions are generalizations, the Pennsylvania/Stanford/MIT researchers stress. And it is stress—or more accurately, producing the proper level of stress—which lurks behind the truly accurate definition of happiness. Too much or too little stress, and the shopper won’t feel as happy.
     But what should you do if you serve a range of consumer time orientations and ages? Based on research findings from Northwestern University and University of Hong Kong, here are suggestions for when shoppers are all feeling threats to their happiness from excessive stress:
  • Feature items that are relaxing, fun, and/or indulgent.
  • Make the items familiar choices.
  • Limit the number of featured items.
  • Use parity pricing. People are more likely to purchase certain types of items when presented with a group of similar alternatives all at the same price. The reason is that parity pricing—which is what this is called—eases decision making.
Click below for more:
Go for Customer Gratitude and Guilt
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Use Parity Pricing to Help Customers Decide

Thursday, February 23, 2012

Clip Mistaken Notions About Coupon Users

In the past, a fistful of consumer behavior findings suggested a stigma associated with use of discount coupons. Researchers at University of Colorado-Boulder, University of Virginia, Duke University, and University of Bologna described associations between coupon use and being a tightwad. Researchers at University of Alberta and University of Manitoba found that when people in a store saw someone using a coupon, judgments of the coupon users, and even of those standing in line with the coupon users, were tugged in a negative direction.
     What a change! Today’s shoppers pride themselves at digging out specials. With the social media daily deal programs, the shoppers are encouraged to trumpet the news to all their friends and encourage everybody to join in.
     The mistaken notions about coupon users now have to do with the wealthy. Clip any mistakes, retailer. An Ipsos Mendelsohn consumer panel study has been tracking coupon use among households with at least $100,000 in annual income:
  • About 70% use a paper coupon at least once each month. More than 45% use one weekly
  • For online coupons, more than half use one monthly and almost one-quarter use one weekly
  • About 60% have purchased a daily deal offer
     Don’t exclude these affluent consumers from your coupon-based promotions. Coupons are a draw. The Ipsos Mendelshohn study found little drop-off in interest even among consumers with more than $250,000 in household income or with at least one million dollars in assets.
     Here are a few shopper psychology tips to get the most from your coupon programs:
  • Distribute coupons as early in the shopping process as possible. Researchers at MIT found that coupons presented at the store entrance drive up sales much more than do coupons available in the aisles of stores. RedPlum.com distributes coupons online before the customer even leaves home for the store. Many retailers end a customer’s purchase by giving a coupon for a discount on a future visit to the store.
  • Use conditions on coupons to influence the size of the entire store purchase. Those MIT researchers also found that when coupon redemption required the customer to spend more on an item than they’d planned to, the customer tends to increase the total shopping trip amount.
  • Help people stay proud to use their coupons. One way to add status is to hook a noble cause to coupon use. RedPlum brags about their sponsorship of a missing children location program.
Click below for more:
Give Coupons Early and Proudly

Wednesday, February 22, 2012

Stab Sweethearting

How big a bite is torn out from your profitability by “sweethearting”? That word with so many pleasant associations has a sinister meaning in the realm of retailing. Sweethearting refers to a store employee:
  • Giving away products for free or at a deep price cut
  • With plans to get, in return, an extra tip, increased social status, or a product for free or at a deep price cut from the sweethearting recipient
  • And all this violating policies set by the store owner/operator
     It’s the third prong of that definition which creates the risk to profitability and the second prong which qualifies sweethearting as a form of fraud. Policies which allow employees to give discounts to their family members can build staff loyalty. Allowing employees to reward good customers with free gifts can increase shopping cart totals and cultivate repeat business. But these are done with the knowledge of the owner/operator, who should be tracking whether the discounts and freebies achieve the intended objectives.
    A pioneering study of sweethearting conducted at Michigan State University and Florida State University, when combined with findings from other consumer behavior research, suggests ways to stab the practice in the heart.
  • Set policies which are unambiguous and easily understood. What sorts of items can be given away or deeply discounted? Which employees are granted the discretion to do this and under what circumstances? What practices, such as trading discounts, are forbidden? To audit the extent and the effectiveness of the practices, what degree of reporting and accountability are required from those employees? Research suggests that the reporting not be made too complex, since this will discourage employee initiative and the use of appropriate gifting.
  • Enforce the policies by punishing offenders, but be careful not to make the punishments out of proportion to the offense. The research finds that increased severity of punishment is not associated with a decrease in subsequent sweethearting by staff.
  • In staff training, periodically give evidence of how employee theft damages the organization. Do not discuss the topic at every training session, though. Research suggests continual discussion makes thievery seem to your employees almost routinely expected.
  • Take special care with employees who show a high need for social approval and/or a love of risk-taking. The researchers found these characteristics made sweethearting more likely. Consider using pre-employment integrity testing with professionally validated inventories.
For your profitability: Sell Well: What Really Moves Your Shoppers

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Fight Employee Theft With Expectations
Psych Out Employee Theft
Shrink Your Shrinkage

Tuesday, February 21, 2012

Remember to Consider Rhetorical Questions

According to a recent Wall Street Journal article, the best retail salespeople ask questions of the shopper and later use the answers to verify the shopper’s preferences by asking more questions.
     If the salesperson’s memory serves her or him well, the questions in that second round might be rhetorical. In retailing, a rhetorical question is a query to which the answer is felt to be so obvious that no reply is necessary. Examples include “Wouldn’t it be fun to have this couch in your living room by tonight?,” and “Do you want to miss this wonderful opportunity?”
     In accord with the WSJ advice, rhetorical questions help close a sale. But be careful. Researchers at University of Minnesota and Ohio State University find that rhetorical questions work only with customers who are already feeling favorable. Then the customer will often answer the question inside his head, if not aloud, with the result that he’ll be thinking more about what you’ve been telling him. If you’ve been telling him the advantages of purchasing the product, he becomes more likely to make that purchase. When he’s already feeling favorable, rhetorical questions help the customer convince himself he’s making an excellent decision.
     However, if either your perception or memory slipped, you might not know that a shopper has nagging doubts about the product, service, store, or salesperson. In these cases, rhetorical questions make the shopper feel all boxed in. He’ll have a sense that you're trying to manipulate him, and he’ll want to escape from the purchase. You’ll lose the sale.
     In personal selling, it’s best to use rhetorical questions only after you sense that the customer wants to make the purchase, but needs a bit of a nudge. If you’re not sure of the degree of shopper resistance, soften any rhetorical questions. One way to soften is to use the questions infrequently. Research findings suggest using rhetorical questions no more than three times in your sales presentation around cautious consumers.
     Another way to soften the rhetorical is to introduce it by asking the customer’s permission and presenting the rhetorical as a statement instead of a question. You could say something like, “May I tell you a question my other customers have considered when making this kind of purchase decision?” The customer is much more likely to say yes than no, and by him giving you permission to go on, the psychological barriers to persuasion are relaxed.

Click below for more:
Use Rhetorical Questions to Close Sales
Soften Rhetoricals Around Cautious Shoppers

Monday, February 20, 2012

Manipulate the Shopper’s Sense of Power

If you make shoppers feel more powerful, they’re likely to increase the amounts spent on purchases for themselves. If you make them feel less powerful, they’re likely to increase the amounts on purchases intended for others.
     Participants in a study at Northwestern University placed bids on items like a T-shirt and a mug. Some of the participants had been exposed to a manipulation to build a sense of greater power, while the manipulation for the other participants was designed to lessen the sense of power.
  • When purchasing the item for themselves, those feeling greater power bid about 86% more for an item, on average, than those feeling lower power.
  • When purchasing the item for someone else, those feeling less powerful bid about 52% more for an item, on average, than those feeling higher power.
     How can you as a retailer manipulate a shopper’s sense of power? In the Northwestern study, it didn’t take much: Some of the study participants were asked to imagine an actual episode in the past when they possessed high power in a situation. The others were asked to imagine an actual episode in which they experienced little power.
     You could adapt that to discussions you have with a regular customer.
     But that might be getting too personal. So instead, consider some other types of research-based manipulations:
  • Show advertisements and store signage which emphasize the power possessed by the shopper (“At our store, you’re the boss”) or deemphasize the power (“At our store, we take care of you”).
  • Treat the shopper with deference or with authority.
     When the salesperson takes on the role of Coach or Playmate, that builds the sense of power of the shopper.
  • 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 Playmate loves fun. The customer expects the Playmate to be more interested in how the shopping experience feels than in how the product or service works.
     Conversely, the salesperson roles of Superhero and Guru manipulate shopper power downwards.
  • The Superhero takes responsibility for rescuing us. The customer expects the Superhero to go above and beyond what most salespeople are able or willing to do.
  • 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.

Click below for more:
Bow Down Before the Shopper’s Power
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Mythologize Your Store

Sunday, February 19, 2012

Assume You’re Presuming the Premise

The young man approached the sage rabbi. “Rabbi, please tell me the secrets of the Law.”
     “I’m not sure you are yet wise enough to understand,” the rabbi replied.
     “Test my wisdom.”
     “All right. I’ll ask you a question. Two men came down a chimney long after the last fire has burned out. The two are standing in the house looking directly at each other, not saying a word. One man’s face is covered with soot. The other man’s face is perfectly clean. Who went to wash his face?”
     The young man was puzzled. “This question is surprisingly easy to answer. The man with the dirty face, of course.”
     The rabbi shook his head no. “The man with the dirty face looked at the man with the clean face and assumed his face was clean, too. The man with the clean face looked at his companion and assumed his own face was dirty. You’ve not answered my question correctly. I believe you must develop more wisdom before I tell you the secrets of the Law.”
     “Please give me another opportunity, Rabbi.”
     “All right. Two men came down a chimney long after the last fire has burned out. The two are standing in the house looking directly at each other, not saying a word. One man’s face is covered with soot. The other man’s face is perfectly clean. Who went to wash his face?”
     “Rabbi, that is the identical question. I now realize it is only the man with the clean face who is stirred to wash up.”
     Again, the rabbi shook his head no. “I assume you think you heard me say a few moments ago that the man with the clean face went to wash. All I said was that the man with the clean face looked at his companion and assumed his own face was dirty.”
     “What is the correct answer, Rabbi?”
     “They both got washed. How could anybody come down a chimney and be so presumptuous to conclude he didn’t need to wash his face? The man with the clean face was that way because he washed before the man with the dirty face did.”
     The young man contemplated all this, then said to the rabbi, “May I assume that, in this house, there was only one place to wash one’s face?”
     “Yes. That is a wise observation. Perhaps you may soon begin your Talmudic studies.”

Click below for more:
Demand to Know Characteristics of Bias
Climb Out of Mistaken Assumptions
Assume Shoppers May Not Understand Why

My thanks to Rabbi Chaim Zaklos for having recently told me the old story which I was then so presumptuous, and conceivably unwise, to twist like a challah into the tale I’ve told you here.

Saturday, February 18, 2012

Bundle Utility, Discount Hedonism

Researchers at Stanford University and Yale University noted the growing popularity of retailers selling bundles. Auto dealerships offer theft-deterrent systems bundled with paint protection products. 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.
     An appeal of bundles to the retailer is that more money is collected during the single transaction, even though the price of the bundle is less than the total of the prices usually charged for the component items. In addition, consumers can be encouraged to try out new products or services they would not otherwise select. And less popular items can be combined with more popular ones to clear inventory.
     Of these advantages for the retailer, the one the shopper is likely to say is of most interest is the price discount. However, other research indicates that, at least subconsciously, the shopper also is attracted to combining serious with fun.
     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 the 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.
     For this to work, the shopper must recognize value in having all the items in the bundle. He must see a need for the utilitarian item and must be seeking the pleasure the hedonic item promises. Emphasizing the discount on the hedonic portions gives the consumer permission to purchase them, too, and that sells the bundle.
     How does this advice apply to the auto dealer’s combo package of theft deterrence with paint protection? Here, the researchers say, clarify the hedonic benefits of one of the components. Talk about the theft deterrence as a practical purchase and the paint protection as ensuring joyful exhibitionism.
     When purchasing a gift, the shopper could see it as hedonic—bringing the pleasure of giving—or as utilitarian—satisfying an obligation. To attract those with the second mindset, create a package which has a clearly hedonic bait. “Your package includes a dozen roses in a gift bouquet and an arrangement of six lilies for your home or office.”

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

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Bundle Pricing, But Limit BOGOs
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Friday, February 17, 2012

Expedite Results by Cuing Causes

In a Journal of Consumer Research article with the seductive title, “Changing the Future by Reshaping the Past,” London Business School researchers tell about creativity and chewing gum.
     In one study, all the participants began by listening to about three minutes of instrumental music. The participants were told they’d be asked questions about the music, but what really came next was administration of the Rorschach inkblot test. Upon completion, all the participants were told they had shown very high creativity on the Rorschach. Even those who hadn’t shown high creativity were told this.
     Then one group of the participants was also told something else: The music they’d listened to was designed to enhance creativity on tasks like the Rorschach. The other participants were told that, although some types of music enhance creativity, they had not heard this type of music earlier.
     What’s this have to do with retailing? The answer has to do with time estimates. All the participants were asked to guess how much time had elapsed between listening to the music and doing the creativity task.
     Talking about guesses, what’s your guess as to how the estimates from the two groups compared? Did the group told about the creativity enhancement from music end up estimating the interval to be longer or shorter than did the others?
     The answer is that the cause-and-effect information, even when not necessarily true, resulted in shorter time estimates. When we’re told two experiences—such as listening to music and excelling at a creativity task—are strongly related, this changes our memory of how much time had passed.
     The London researchers then conducted studies in which they told some participants there was a relationship between chewing gum and doing well on an attention task. Those given this information estimated the time between gum chewing and attention performance to be shorter than with a matched group not told there’s a connection. And this estimate of quick action produced a pronounced preference for the gum over using an energy bar to improve attention.
     We won’t want to lie to shoppers about cause-and-effect, as was done by the researchers. But by cuing your shoppers about real causal relationships between using a product and enjoying the benefits, you implant in their memories an impression of the effectiveness being quick. In compressing time, you strengthen preferences for the service or product and for purchasing it at your store.

Click below for more:
Clarify Cause & Effect with Users

Thursday, February 16, 2012

Matchmake with Social Media

A piece in Mashable grumbled about how retailers and other businesses are overlooking the value of social media as a matchmaker. The article is talking about hooking up with job candidates.
     One angle on this is realizing that prospective employees now use Facebook, Google+, and the rest to size you up as a prospective employer. Sure, they may also be checking out reviews of your store on sites like Yelp, and before applying for employment with you, they’re likely to visit your store. But social media channels allow the job seeker to assess the personality of your business from what you, the owner or operator, choose to show and tell.
     Knowing this, you’ll want to:
  • Include material on your social media sites to reflect the history and the culture of your store
  • Encourage your current employees to contribute material to the pages, and then comment as the owner/operator on what’s been contributed
  • Invite job seekers to ask questions via the site, and then answer the questions in ways appealing to the types of people you’d like to have working for you
     There’s more, though: Recognize the potential traps in using social media in ways that might be seen as paralleling computer dating services.
     Psychological science findings from Northwestern University, Texas A & M University, University of California-Los Angeles, University of Rochester, and Illinois State University identified traps in online matchmaking sites. Here are a few ways those findings could apply to retailers using social media to match themselves with the right staff members:
  • Profiles are oversimplified. First, what appears is constrained by the categories used on that site. Second, the users want to appeal to a broad audience, so their descriptions are overly general.
  • People exaggerate their virtues and hide their flaws in postings. And those reading the postings realize this, so correct for it. This results in a desire by posters to exaggerate even more.
  • Profiles are static rather than dynamic. There’s insufficient attention to assessing how the partners would handle difficult situations as a pair after getting together.
     The psychologists who identified the troubles with online matchmaking sites recommend a potential couple meet each other face-to-face in a safe location early in the process. Parallel advice holds for the store management and the job candidate. Then screen a prospective employee by presenting a few situations and asking the prospect how he or she might handle each.

Click below for more:
Inculcate Your Staff with Store Values

Wednesday, February 15, 2012

Weather the Storm of Worries

Annual weather cycles affect large segments of your target customers the same way, so you plan your merchandising to take account of the weather. In January, you can pretty much count on everybody being cold if they go outside when your store is in Buffalo, New York and quite warm when outside a store in Adelaide, South Australia. Knowing this, you’ll stock more stay-at-home and go-out-protected items at one time of year than at the others.
     But as this 2012 mild winter showed, a retailer can’t always count on the climate. Our weather appears to be getting less predictable. According to the Chicago Tribune, earnings at apparel retailers were down markedly in what turned out to be the third-warmest January in fifty years. When the merchandise moved out the door, it was too often at deep discounts, given in order to clear space for items usually associated more closely with springtime.
     Retailers can protect against losses from catastrophic weather events with traditional insurance policies. If hit by a tornado, hurricane, or massive flooding, you document your losses to the insurance carrier, cover your deductible, and are made whole for the rest.
     Two shortfalls of this approach: First, a surprisingly warm winter doesn’t qualify as a catastrophic weather event, even though there could be notable damage to indicators of the retailer’s business health. Secondly, the coverage usually excludes some indicators, such as profit margin erosion, which worry retailers.
     There’s a type of protection which addresses these shortfalls: Weather derivatives make the payout based not on documentations of bottom line losses, but instead on the nature of the climate which threatened the bottom line, such as heat waves or prolonged snowstorms.
     I’m not recommending weather derivatives to you. I’m a psychologist, not an insurance broker. These instruments operate in a market under much more lenient regulation than do traditional insurance companies. I use weather derivatives as an example of customizing your risk management. In order to succeed, every retail business will take educated guesses. Identify what you’ll monitor and what might produce worries which impede your effective management. Those are what to insure against.
     Then concentrate on prospering. The Pulitzer Prize winning Pioneer Press in St. Paul, Minnesota catalogs some among the many retailers who, in fact, experienced increased customer traffic and profits in January. The unusually mild weather freed consumers to get out of their homes and to the stores.

Click below for more:
Merchandise to Fit Purchasing Cycles
Stock Your Cellar for the Perfect Storm
Check Your Dashboard Indicators

Tuesday, February 14, 2012

Feature Functions with Ugly Innovations

Valentine’s Day is an occasion to recall that paraphrase of Plato, “Beauty is in the eye of the beholder.” My paraphrase of that paraphrase for today’s posting is, “What’s really ugly from one perspective might be better looking from another perspective.”
     The point is you’ll need to point out that other perspective. To paraphrase from Matthew 5:15, “Don’t hide your light under a bushel basket.”
     Researchers at Boston University and University of Western Ontario considered the case of toning shoes—that innovation in footwear touted as improving lower body appearance, but looking mighty strange, if not downright ugly, with the large rounded sole.
     Reebok introduced the shoes to the marketplace in 2009 with an emphasis on experiential benefits, using phrases like “getting a nice booty” and “building better legs.” Skechers chose, instead, to talk of the functional, utilitarian benefits of strengthening back and leg muscles.
     As a general rule, benefits claims sell better to end consumers than do lists of features. Even commercial accounts will want to know the benefits along with whatever specifications they collect in order to convince others they’re making a wise purchase. Consumers are usually more interested in what the product or service can do for them than in the product or service specifications. So both Reebok and Skechers were wise to talk about benefits. But did it make a difference whether those benefits were more experiential or more functional?
     The Boston/Western Ontario researchers found that it did, and this was because the newly introduced product looked strange. When a product is positioned on functional dimensions, consumers evaluate aesthetic changes to product form more favorably than products which look similar to past versions. On the other hand, when a product is positioned using experiential dimensions, consumers evaluate aesthetic changes to product form less favorably than products which look similar to past versions.
     Here’s the explanation: If consumers see an improved product as looking odd, they hunger for information about what the use is of the change. With a statement of experiential benefits, the consumers are left to speculate about what utilitarian benefits will lead to the experiential benefits. They’re uncomfortable speculating, and they might get the answer wrong. These consumers prefer prose to poetry.
     As a retailer wanting to sell the innovative product, feed the hunger. Certainly talk about the good experiences the improved offering will provide. But keep the pitch utilitarian to start.

Click below for more:
Capabilities Before Technical Specifications
Give Experts Novel Product Categories
Sell Benefits to Fit Shoppers' Values
Stay in Touch for B2B Sales
Drop Modesty Protections For Now

Monday, February 13, 2012

Sin No More with Synesthesia

The Economist magazine has shown an abiding interest over the years in synesthesia. That’s the cross-sensory phenomenon in which, for example, certain sounds produce in the person’s brain the perceptions of colors, each sound bringing forth a particular hue. Or how the sounds of music can arouse sensations of taste.
     Sophisticated brain mapping technologies now allow for an explanation of synesthesia in terms of adjacent and overlapping anatomical pathways. Other explanations concern the associations among tastes, smells, textures, sights, and sounds which we’ve learned over our lifetimes as consumers. Specifically, taste can be stimulated by verbal descriptions, not just by the sensory experiences themselves. And the more of these senses that are pleasantly stimulated, the more likely the shopper’s movement toward the sale.
     In its latest article about synesthesia, using study findings from Oxford University researchers, The Economist discusses how the quality of background music influences gustatory experiences when eating. Extrapolating from the material in the article gives suggestions for enhancing consumers’ sensations. Here’s my version, based on what’s reported there and similar research findings:
  • Accentuate sweet and sour tastes with higher-pitched music
  • Bitter, smoky, and woody tastes come through better with lower-pitched music
  • Fruity flavors are associated with piano and woodwind
     University of Michigan researchers presented one of two chewing gum ads to consumers. The first was designed to appeal to multiple senses, reading "Stimulate your senses." The other ad mentioned only taste, reading, "Long-lasting flavor." All the study participants then sampled the gum.
     Those people reading the multiple-sensory version before the sampling gave higher ratings to the flavor of the gum. The researchers repeated the multiple-sensory versus taste-only advertising/sampling with potato chips and with popcorn. The results were fundamentally the same.
     Having customers fully enjoy that first sample of a new product is crucial. You don't have a second chance to make a good first impression. When you include descriptions that appeal to the full range of sensations in your ads, promotional materials, signage, and packaging text or menu text, you gain an edge at the time the consumer puts your product into the mouth.
     And this means of achieving an advantage works with non-food items, too. Whether it's detergent, sporting goods, or hardware, the fuller the preparation of the shopper's senses, the better.
     To miss the opportunities to profit from a combination of sensory stimulation of the shopper would be a sin, retailer. Sin no more.

Click below for more:
Talk to Multiple Senses with New Products
Compose Integrated Musical Atmospheres
Balloon Your Profitability with Music

Sunday, February 12, 2012

Stop the Nagging Among Shoppers

Shoppers don’t like being nagged. By you or by each other. Especially by their own kids. Too much of it, say psychologists at Duke University, and the shoppers get anxious to bolt out the door. And you lose the sale.
     This could be a particular problem at the cash/wrap. So how about the decision by Hy-Vee supermarkets to remove candy bars, gum, and other sweet treats from checkout counters throughout the chain?
     It’s not a brand new idea for Hy-Vee. In January 2011, some Hy-Vee stores introduced the change. It’s also not a brand new idea in the industry. Back in 2007, Loblaw Companies Limited, as Canada's largest grocery retailer, began gradually rolling out what they called “Clutter-Free Check Out Lanes.” If you wanted your candy, you bought it in the larger package in the candy section of the main store.
     Hy-Vee publicized the checkout lane system as a healthy living initiative. Hy-Vee also hires dieticians to be on store staffs. Loblaw said the change was to make the checkout process quicker. They also removed magazines and batteries from the cash/wrap area.
     But there’s also the nag factor. Loblaw got congratulations not only for cleaning up the overstuffed cash/wrap area, but also for enabling parents to guide their children and themselves through candy-free alleys, making it less likely the whole family would end up overstuffed. Superquinn, one of Ireland’s most respected supermarket chains, removed the candy from the checkout counters because, company founder Feargal Quinn was quoted as saying about the kids, “They kick up blue murder until the mother buys them something from the display of goodies.”
     It’s true that Mr. Quinn anticipated losing considerable revenue by preventing sales of the nag-buy items. And Loblaw may have been cheating company stockholders out of dividends by forgoing the chance to make all those small last-minute sales when a shopper is waiting in line.
     Hy-Vee did not transform all the checkout areas in a store to the healthy food format. We wouldn’t want to nag shoppers into giving up candy if they choose to indulge or if they actually welcome the kids kicking up blue murder so that the adult has an excuse for stuffing the stuff in.
     In your retailing, give the consumers choices. Also stay aware of ways you can head off the types of nagging among shoppers which irritate some of those shoppers.

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

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Prime Your Shoppers Below Awareness
React When Faced with Reactance
Make Waiting in Line Interesting

Saturday, February 11, 2012

Treat Shopper Psychology as a Science

“Science will unquestionably play a larger role in determining pricing strategies in the future. In the interim, a certain amount of art and psychology remain in play.”
     Such is the conclusion of an article in the current NRF Stores magazine. A retail pricing specialist is quoted as saying “Part of pricing is psychological — it’s an art form.” The implication: What’s psychological is not scientific, but rather highly subjective.
     With this view, retailers miss profitability opportunities. For one thing, there is a never-ending stream of high-quality shopper psychology research findings to inspire specific, verified tactics. Another problem with the “psychology as fuzzy art” approach is that it too often generates a view of the shopper as addled and the goal of the retailer as exploitation. Also attributed to the retail pricing specialist is a quip that the hallmark of any good pricing strategy is the ability to confuse shoppers such that they’re not sure what the price should be.
     Sure, some of what masquerades as shopper psychology advice to retailers is junk. In giving suggestions, people with years of experience in retailing may fail to check what high-quality research finds. Our human brains are quite biased when perceiving, interpreting, and remembering experiences. The best shopper psychology advice derives from both research findings and in-store experiences.
     Treat shopper psychology as a science, and in your daily decision making, take a scientific approach:
  • To what degree are you basing the decision on the outcome of a similar decision you’ve made yourself or which was made by others whose judgment you trust? Check that the degree to which you’re doing this is not more than the degree of similarity of the current situation facing you to the situation occurring with the basis decision.
  • Are there more reasons to take the action or more reasons not to take it? Put somewhat more time into evaluating the side with the smaller count of reasons than the side with the larger count.
  • What is the evidence that the numbers and stories you’re using to make your decision are overall averages that mask a wide range or are extremes that mask typical situations?
  • Always know that “information” is not the same as raw data. Information has implications for action. It directs you toward what to do or not do. Be careful that you don’t take false comfort by bathing in lots of warm data that aren’t information.
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Slip in Superfluous Choices
Stamp Out Bias in Your Decision Making

Friday, February 10, 2012

Hide the Cake After Delegating Decisions

Delegate decision making to employees, advisors, and vendors so you can spend time working on your business, not just in your business.
     But in a set of four experiments, researchers at University of Alberta identified a threat to profitability for the retailer who delegates highly important decisions: After granting the authority, responsibility, and accountability, you become more likely for a while to make your own other decisions in less healthy ways.
     In one experiment, consumers were asked to assume they’d suffered a wrist injury. Some of the consumers were asked to go on to assume they delegated all the treatment decisions to a physician. The others were asked to make the treatment decisions themselves individually. Assignment to one or the other of the two groups was done randomly.
     Next, each consumer was offered the choice between two rewards for participation in the study—either a fruit salad or a piece of chocolate cake.
     Lots of previous research had shown that when a consumer is called on to exercise a great deal of mental effort, the consumer becomes more likely to select a tasty, less healthy treat over a healthy, less tasty treat. In the Alberta study, the question is who was exerting more mental effort—those who delegated the treatment decision to the physician or those who made the treatment decisions themselves. Which group was more likely to pick the chocolate cake?
     What’s your guess?
     You might think it would be the consumers who kept the responsibility. That seems harder than giving it up to somebody else. However, it was actually the delegators who chose the chocolate cake more often.
     Wrist injuries are not the same as retail business decisions, and choosing chocolate cake is not identical to a retailer making a choice unhealthy for the business. Still, the Alberta researchers’ analyses indicate the underlying psychological dynamics are the same. Delegating important decisions causes managers to question their competency—even if briefly—and struggling against this self-doubt consumes substantial mental energy. In another experiment, delegating important decision making resulted in an increased tendency to purchase merchandise without adequately analyzing the consequences.
     The solution, the research suggests, is for the retailers to remind themselves of important decisions they made well in the past and to maintain authority, responsibility, and accountability for the consequences of delegated and non-delegated decisions.
     It also wouldn’t hurt to hide the chocolate cake for a while.

Click below for more:
Delegate, Empower & Collaborate
Check Your Optimism When Dealing with Vendors

Thursday, February 9, 2012

Criticize Employees with Care

Researchers at business consultants Ferrazzi Greenlight assessed the level of organizational candor at each of six banks by interviewing the executives. The researchers then related the level of candor within the organization to the financial performance of the bank. Sure enough, those banks where the executives were willing to criticize each other showed the best financial returns, including during our latest global economic crisis.
     A willingness to criticize. However, the criticism wasn’t targeted toward personal characteristics. It was targeted toward the job of the bank as a retailer. Other Ferrazzi Greenlight studies at fifty businesses over a three-year period supported the value of criticism with care. Based on these findings and those from other researchers, here are a few techniques to improve the financial performance of your retail business:
  • Coach employees to give caring criticism. “I might suggest,” and “Please think about this,” proved to be nice ways to introduce the criticism. “Thank you for the suggestion,” and “I assure you I will carefully consider what you’ve said,” are good ways to receive the criticism. Coaching is a process, not an event. Creating and maintaining an arena for caring criticism requires continuing diligence. Talk about personal responsibility rather than personal blame.
  • Hold team meetings with three people. Not all the team meetings, mind you. You’ll also want huddles and special events in which every salesperson, or sometimes absolutely every employee, is included. But the evidence is that caring criticism is better given and received in small groups. The limited size avoids a sense of people ganging up on an employee. Three people is a good size. The person receiving the criticism can receive two perspectives from the others. This is enough to bestow credibility on justified suggestions, but not so many that the target feels overwhelmed.
  • In larger meetings, assign one employee to facilitate caring criticism. This person should not be the leader of the meetings, whose attention is taken with the meeting agenda. But the leader does have a necessary role in the process working. Often, decisions must be made in a meeting and teamwork developed. Therefore, if the criticism is taking too much time or is taking an overly personal tone, the leader should ask the criticism coordinator to hold off. At other times, the leader will stop the meeting flowing forward in order to ask the criticism coordinator to ensure there is an openness to candor.
Click below for more:
Take Employee Suggestions Seriously
Fix the Problem, Not the Blame

Wednesday, February 8, 2012

Compromise Effects with Shopper Segments

Anticipating trends is a valuable skill for retailers. Also valuable is an awareness that a trend can wiggle around, level out, and move into reverse. Moreover, a trend that holds true for one consumer segment might not hold at all for other consumer segments.
     An exemplar of all this is the changing strength of what consumer psychologists call the compromise effect: When a shopper is faced with a good-better-best choice, the typical shopper tends toward the middle alternative.
     Traditional research found the compromise effect to be robust, allowing retailers to shape shopper behavior by the choices presented to the consumer. You’d put in the middle the choice you thought would be best for satisfying the shopper’s needs and your profitability objectives.
     Then began a trend toward what I’ve called barbell retailing: Consumer choices moved away from middle markets. Movement to the extremes becomes more likely at times of uncertainty, and consumers worldwide were experiencing economic uncertainty.
     The implications for you, the retailer:
  • In your merchandising, feature both premium and bargain choices for product lines. If you need to save on inventory expenses, deemphasize the midrange choices.
  • For any midrange lines you do carry, project a strong lifestyle personality of staying the course and showing perseverance in the face of uncertainty.
  • Avoid the extreme extremes. When the weightlifter loads up the barbell for a total 130 lb lift, they’ll put the 50 lb weights on first, then the 10 lb weights outside the 50 lb ones, and then the 5 lb weights outside the 10 lb ones. Keep the shape of that barbell in mind. Your shoppers are moving out from the center, but only a minority are moving all the way out to the highest luxury or the deepest discount preferences.
     But, wait. The compromise effect trend wiggled with mood: When shoppers are worried, but determined to make the purchase rather than defer the decision, they seek the compromise alternative and will look for it as the middle alternative. Not the highest-priced or lowest priced, but the middle-priced. Not the highest quality or lowest quality, but the medium quality.
     Now, a more recent study at Otto-von-Guericke-University and Karlsruhe Institute of Technology in Germany indicates that it makes a difference whether your shopper is more interested in quality or price. The compromise effect is currently strong among the segment of quality-seeking consumers, but weak and insignificant among the price-conscious segment.

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Strengthen Your Barbell Retailing
Rearrange When the Chips Are Down

Tuesday, February 7, 2012

Color In the Black Beauty Lines

Want to stay in the black—call that “black beauty”—and out of the red—okay, “massacre red”—when graphing your financial status? Then remember how color names you use for retailing make a difference.
     Are you better off carrying products labeled “cherry red” rather than just “red” on the package? Is a car salesman or interior designer likely to make better sales saying “passion blue” instead of “medium blue,” even though the automobile or the carpet swatch is right there for the customers to see for themselves?
     Research at Boston College and University of Pennsylvania implies that Shakespeare’s Juliet may have had her accuracy clouded by love when she uttered “What's in a name? that which we call a rose By any other name would smell as sweet.”
     Unexpected color names—like “Florida orange” and “freckle brown” build interest. Color names which venture beyond surprise to blatant ambiguity—names like “antique red” and “millennium orange”—might be better still. Ambiguous names work best when the shopper doesn’t see the actual product color first, while unexpected descriptive names work best when the product color is seen. The reason for all this is that the shopper spends mental energy trying to figure out why the particular color name was used, and consumer psychology studies find that mental involvement increases purchase likelihood.
     Are there circumstances in which it’s best not to use color names oozing with personality or ambiguity? In Art and Copy, a 2009 documentary about creative geniuses in the U.S. advertising trade, Hal Riney described his recommendations to General Motors about introducing the Saturn automobile line. Aiming for a down-home, go-for-basics appeal, Mr. Riney advised that if the car is red, call it “red.”
     One might claim that the Saturn is no longer being manufactured because the color names didn’t have enough personality. But that would be twisting the evidence a whole bunch. GM didn’t stay with Mr. Riney’s advice. Color names for the Saturn included “chili pepper red,” “evening blue,” and “forest green.”
     So don’t get too precious about creating names for colors. Comic Mike Dobbins claims a guy where Mike was employed kept arguing with everybody in the office that his pink oxford shirt was actually salmon. When the whole thing became too much of a distraction, Human Resources brought in an expert to settle the dispute. The expert—a grizzly bear—made fast work of it.

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Juice Up Sales with Flavorful Names

Monday, February 6, 2012

Race for Recognition

White American and Black American consumers were asked to view a series of clothing ads featuring a mix of Black models and White models. Some of the ads included a relatively small number of models, while the others had a relatively large number. In each ad, the percentages of White and Black models were the same.
     Later, each study participant was asked to estimate the number of White and Black models in the ads. The participant was also shown pictures of Black models and White models and asked to say if each had been or had not been in one of the ads.
  • All the consumers in the study—whether Black or White—were generally accurate in guessing the number of White models in the ads.
  • When the number of Black models in an ad was relatively small, the White consumers said there were more Black models than there actually were.
  • But when the number of Black models was relatively large, the White consumers were generally accurate in guessing the number.
  • The Black consumers were generally accurate in guessing the number of Black models when the number was small, but were notably less accurate in their frequency estimates when the number of Black models was relatively large.
  • The White study participants were substantially more accurate than the Black study participants in recalling the faces of the Black models.
     The researchers, based at Hong Kong University of Science and Technology, attribute the differences to a high interest consumers of a racial minority have in checking that their race is represented. The evidence is that the Black consumers, when viewing each ad, would count the number of Black models, which left insufficient attention for storing in memory the facial features of the models.
     The study findings are a reminder to retailers that in advertising and store staffing, your shoppers who consider themselves to be in the racial, ethnic, cultural, or language minority pay close attention to whether their minority is represented equitably.
     Researchers from Stanford University found that Black Americans had more positive reactions to an ad with Black actors than American Whites had to the same sort of ad featuring White actors. Latino consumers living in Austin, Texas—where Latinos were an ethnic minority—were more likely to trust a Latino salesperson than were Latino consumers living just 80 miles away in San Antonio—where Latinos were an ethnic majority.

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Target Customer Segments with Cultural Events

Sunday, February 5, 2012

Telescope Time for Satisfied Shoppers

Why is it that somewhere between 65% and 85% of customers who start shopping elsewhere for their items say they were satisfied with the prior retailer?
     Researchers from Tilburg University in the Netherlands and University of Valencia in Spain say that a major reason is simply because consumers seek variety, but that there’s also a deeper explanation. It has to do with regret. More importantly for us, these research findings, along with others, suggest ways to surface and reduce the problem so that you keep your customers.
     One set of methods has to do with increasing the variety:
  • Change the merchandise mix and the merchandise arrangement in your store regularly so that you’re offering your repeat customers endless new stimulation. People will go back to see a movie they really enjoyed, but not more than once or twice again.
  • Announce changes in your store. If you’ve a fair amount of walk-in traffic, it’s particularly important to make the modifications in display windows and areas shoppers will see as they stroll by. In ads, show images of the areas you’ve changed.
  • Point out the changes to customers while they are shopping.
  • In conversations with your shoppers about what’s in your store, telescope the past: Remind them of the variety of experiences they’ve had when shopping in your store. Researchers at Carnegie Mellon University, University of Minnesota, and New York University say the reason this works is that we often forget all of the variety we’ve actually had in our lives and instead focus on how repetitive our experiences have been. By reminding the customer of prior buying trips—or asking the customer if there have been prior buying trips—we generate a sense of variety.
     Another set of methods addresses the regret which drives satisfied customers to seek alternatives to your store. The regret, according to the Tilburg/Valencia researchers has to do with giving up options. Your customer thinks, “I’m sorry that I’ve kept coming to the same store repeatedly, since I now don’t know what I might have missed.”
  • In querying your customers about their purchase intentions, telescope the future: Talk about what your store will be offering months from now. This plants in the customer’s mind the notion that it’s okay to explore other alternatives, after which the consumer returns to your store.
  • Stay in touch with past customers who haven’t been in for a while.
For your profitability: Sell Well: What Really Moves Your Shoppers

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Add Apparent Assortment in Tight Quarters

Saturday, February 4, 2012

Brief Consumers After Easy Surveying

Consumers are more willing than in the past to share opinions with you, but they expect your questioning to be brief and easy.
     These are the findings of a global survey of 1,193 consumers by Swedish-based market research firm Cint. The Cint study assessed methodologies used by brand managers. Here are the implications I see for retailers:
  • The increased willingness of your shoppers to share their opinions with you is because they’re convinced you’ll listen to them. They attribute your open ears to what they see as high competition for the purchaser’s dollar in this tight economic climate. To keep the helpful feedback flowing, open up your mind and your mouth as well. Consider how to make best of the information you gather, and tell your target audiences what changes you’ve made because of the information.
  • Keep it short. In the Cint study, about 40% of respondents said they’d be willing to spend up to five minutes on a survey of their shopping opinions, and an additional 30% said they’d be willing to spend up to ten minutes. Plan your questions carefully so that you don’t lose those who get impatient.
  • Enable your shoppers and potential shoppers to use the internet and mobile device texting to answer your questions. Many, if not most, consumers are more comfortable sharing criticism this way than in face-to-face or telephone interactions. And you do want to know the criticism of your store operations as well as the praise, don’t you?
  • Reward respondents. The best reward is evidence you’re considering what the consumer shared with you. Still, a coupon for a discount couldn’t hurt. About 55% of those surveyed by Cint said money would motivate them, and about 40% said free products or vouchers would do it.
  • In your questions, hesitate asking about changes you’re highly unlikely to make. Keep expectations realistic. Researchers at University of California-San Diego and Northwestern University found that when retailers overpromise what they can do, consumers quickly become disenchanted with the retailer.
     The evidence is clear that, as long as you make it brief and show you’re using the information, your shoppers enjoy being asked, and they’ll reward the retailers who do ask. In the Cint study, 62% of those surveyed said they were more likely to buy from a merchant after being solicited for their views. Only 3% said the questioning would make them less likely to buy.

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Draw Out Advice & Opinions from Shoppers

Friday, February 3, 2012

Whiff Warp & Woof of Store Signature Sales

According to NRF Stores, the best-selling men’s fragrance in the U.S. is named Fierce. It blends the scents of orange, fir, rosewood, and resin. Can you imagine the odor?
     Okay, I’ll help. Fierce is the fragrance shoppers encounter whenever they enter, or even approach, a flagship Abercrombie & Fitch store. A&F is making money by selling to consumers the smell the consumers associate with pleasant experiences in the store.
     Cracker Barrel shops—each an exquisite blend of restaurant and gift store—sells CDs of the music playing in the background. The customer can take away the sounds they associate with pleasant times in the shop.
     The warp & woof—the fundamentals—of selling store signatures like smells and sounds are the rules of classical conditioning.
     I admit it sidesteps the dignity of your customers to consider them as experimental animals like Pavlov’s dog. You do remember Ivan Pavlov and how when he paired the sound of a bell with feeding a dog, pretty soon the bell caused the dog to salivate? That‘s classical conditioning.
  • It works best when the shopper is not already familiar with the same smells or sounds from other stores. They associate the sensations with you. Cracker Barrel, Starbucks, Walmart, and Target each arranged in the past to sell house brand special edition CDs which included tracks not available elsewhere. However, realize that uniqueness is not essential. United Airlines for a time used “Rhapsody in Blue,” one of the more familiar melodies to the adult American ear, as a classical conditioning stimulus.
  • The effect is strongest when you present the fragrance or the music early in the shopping trip and then give the shopper a pleasant time worth remembering. Here, too, exceptions to the ideal sequence still do work.
  • After both the experience of the smell or sound and the pleasant experience of the shopping itself, prominently remind the shopper of the availability of the items to buy. Put the cologne on the cash/wrap and tell shoppers it’s what they’re smelling. Have signage reading, “The music you’re hearing now is available for purchase.” Coach staff to watch for customers who show interest in the music, and when the interest is there, to say, “Thank you for shopping with us. Would you like to take a look at the CD containing the music you’re hearing play now? Or find out how to download it onto your player?”

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Play and Sell Store Theme Music
Condition Your Customers

Thursday, February 2, 2012

Sweep Millennial Women Off Their Feet

Ready for lovely profits from your Valentine’s Day shoppers? Results from a survey sponsored by the National Retail Federation and conducted by BIGinsight say that the dollar value of Valentine’s Day purchases will be up about 8.5% over last year and at the highest level for at least ten years. More than 9,300 consumers were polled for the survey.
     It’s the men whose hearts and wallets seem to be throbbing harder here. They’ll be spending nearly twice as much as the women to sweep their sweeties off their feet.
     How about helping the other side by sweeping the ladies into your store for Valentine’s Day and beyond? For tips on that, let’s turn to another survey, this one conducted by comScore on a sample of about half a million female consumers.
     The thrust of the findings were that Millennials—women ages 16 to 29—are different sorts of consumers than other age groups. The others in the project were classified as Generation X (ages 30 to 44), Baby Boomers (45 to 59), and Seniors (at least age 60).
     Here’s what’s important to know about Millennial women from the comScore study and other research:
  • Because of Millennials’ comfort with technology, they are more likely to be persuaded by the internet than by television.
  • Because of Millennials’ multitasking preferences, you need to command their attention more quickly and dramatically than is necessary with the older age groups. Use colorful, stimulating content.
  • Because of Millennials’ sensitivity to social cues, stories told by the retailer can be influential, especially when each story kicks off with a surprise.
  • Advertising professionals refer to the “lift” of persuasive communications: We want to lift consumers from awareness of your store and merchandise through favorable attitudes, and on to an intent to purchase from you. The lift from awareness to favorable attitude is more challenging with Millennials than with the other adult age groups. However, the lift from favorable attitudes to purchase intent is easier with Millennials than with the others. Millennial women are more likely than other women to retain a favorable impression from an ad.
  • All consumer groups are price sensitive now. As a group, female Millennials are especially price sensitive. Still, they’ll seek out stores where staff sweep them off their feet, even if those stores happen to have higher price points on merchandise or services.
  • As with the other age groups, trustworthiness is fundamental.

Click below for more:
Attend to Face-to-Face Word-of-Mouth
Lock In Customer Gratitude

Wednesday, February 1, 2012

Build House Brand Equity with Distinction

There is a trend among retailers to use the same private label brand name across product categories. The reason is that these house brands have succeeded in establishing not only a price advantage over national supplier brands, but also a reputation for superior quality. For instance, Kroger Co. renamed their “Naturally Preferred” and “Private Selection” organic lines “Simple Truth.”
     Currently, private label items cost, on average, about one-third less than the price of the national label brand. But in some categories, the private label item costs more than the average national label brand, and overall, the comparative prices of the private label alternatives are climbing.
     When items carry the same brand name across product categories—such as a bath soap and a shampoo—you’d like to strengthen the brand image by using the same package design. Having almost identical package designs is common with house brands, where a consumer could be looking at tables and tacos during one shopping trip.
     Overall, using a similar package design to build brand image is a good idea from a shopper psychology perspective. Mere familiarity brings credibility.
     There’s a potential downside, though. Research findings from Wake Forest University and University of North Carolina–Greensboro suggest that when packaging is similar across items, the shopper senses a loss of control. The consequence might be that shoppers seek variety beyond the similarly branded items. The shopper becomes a bit less likely to buy the house brand across product categories unless you take steps to restore the sense of control.
  • Introduce distinctions by placing products with the same package design in different relative shelf positions for different product categories. With the mouthwash, the house brand is to the top left of the other brands, while with the toothpaste, the house brand is to the bottom right of the other brands. Research at University of Pennsylvania and University of Illinois confirms that random arrangement of a product set can lead to more buying.
  • If your merchandising allows this, use variations of the same name. At Trader Joe’s, you might see Trader Ming, Trader Jacques, and Trader Giotto.
  • Curb the routine with distinctive designs and color schemes on signage for different product categories. Researchers at Columbia University and University of British Columbia find that such techniques give the shopper a sense of control, and this sense of control curbs further variety seeking.

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

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