Sunday, March 31, 2013

In Cause Marketing, Portray Effectiveness

As with bricks-and-mortar stores, online customers take into account a retailer’s contributions to society when making purchase decisions. An eMarketer posting reports that for about one out of every two consumers, social purpose is a purchase trigger, and about three out of every four consumers say it’s acceptable for a business to make money by touting social consciousness.
     Still, surveys are showing an increasing demand from recipients of your cause marketing to know the results of the partnerships with nonprofit organizations. How much you’ve done and for whom is of interest, but outweighing this is attention to what difference, if any, your activities made. A Media Post article opines that this is particularly important to affluent consumers.
     Start by choosing the right nonprofit partner so that the results you report are relevant to the consumers’ personal objectives. In looking at this issue, researchers at University of Minnesota, University of South Carolina, and University of Georgia used a fundamental dimension in consumer psychology—promotion-focused versus prevention-focused.
     Prevention-focused shoppers put top priority on products and services which help them avoid losing what they have now. Promotion-focused shoppers put top priority on products and services which help them gain more than they have now.
     Shoppers in luxury stores are more likely to be promotion- than prevention-focused, while it’s the other way around for shoppers for necessities. That influences the merchandise they’ll buy in the ways you’d expect. However, when it comes to the charitable activities, they support, it’s more complicated: Shoppers interested in self-enhancement in their purchases are more comfortable when the store includes among their main partners charities supporting traditional causes, such as basics and conservation.
     If these luxury store brands do include a symphony orchestra or art exhibit among their partners, they might do well to also highlight their continuing association with a charity providing food, shelter, and education to disadvantaged populations.
     Once you have the right nonprofit partner, maintain continuity and consistency in the cause marketing. The Media Post article gives an example of a lapse of four years in the joint business-nonprofit marketing campaign. This belies claims of authentic commitment to the nonprofit.
     Then, in describing your effectiveness, use both statistics and stories, and augment both types of information with graphics. Understanding the numbers is easier when they’re organized in a table or summarized in a chart. Stories are more compelling when accompanied by a photo or drawing.

Click below for more: 
Differentiate Yourself in Charity Sponsorship 
Fit Contributions to Contrarian Consumers 
Collapse to Soles When Asking for Money

Saturday, March 30, 2013

Include the Kids in Financial Literacy Talk

Parents play a larger role in young adults’ consumer behavior than the young adults admit. A major determinant of their interest in trying a new product category or unfamiliar brand is the degree to which the parents are innovative. Researchers at University of Western Ontario and University of South Carolina find that when a family group of shoppers includes young adults and their parents, the parents’ attitude toward innovation and risk carries more weight than the siblings’ views. The researchers advise that if you want to get the next generation to try new products, target their parents.
     Socialization from school, workplace, and the media influence consumer behavior. The extra kick from parental socialization of the children concerns genetics. Studies with identical and fraternal twins indicate that consumer behavior tendencies are passed on through the genes. When the kids watch or participate in their parents’ shopping excursions, nature and nurture work together to shape the knowledge, attitudes, and skills to function profitably in the marketplace.
     This importance of parental influence certainly applies to acceptance of new financial services products and to financial literacy, according to researchers at Iowa State University, Ohio State University, and University Putra Malaysia. Consequently, the researchers recommend that retailers of financial services products include offspring in presentations to clients and prospective clients.
     I’ll extend that to recommend all sorts of retailers include even younger offspring in financial literacy discussions. Because of children's roles as a future market, you've a responsibility to the wellbeing of your business and your community to cultivate kids into good consumers.
     Based on the findings of their studies, the researchers urge a special emphasis on building parental support for starting to invest at an early age and making investing a habit.
     Research findings from University of Southern California and University of Virginia suggest a framework for analyzing and guiding the parents’ socialization of their offspring’s investment and savings behavior: Attend to goal specificity and construal level.
  • Goal specificity refers to how precise a savings goal is. “I want to save $3,000 this year” has high goal specificity. “Over the next few years, I want to save as much as possible” has low goal specificity. 
  • Construal level refers to how much the consumer is thinking about why to save and how much about how to save. 
For long-range objectives, why and specifics are best. For the short-term, how and low specificity are best.

Click below for more: 
Enrich Clients’ Savings Deposits 
Identify Influencers in Family Decision Making 
Distribute Worksheets for Child Consumers

Friday, March 29, 2013

Infect Your Store with Enthusiasm

Even when the people in your store don’t interact directly with each other, their emotional states influence each other. University of Queensland researchers observed positive and negative feelings displayed by shoppers in retail environments moment-to-moment. Not only did a general emotional tone spread, but if one shopper changed from negative to positive or in the opposite direction, other shoppers tracked along with their own behavioral evidence of emotions. All this, in turn, was found to affect intentions to purchase items at the store and intentions to return to the store for future purchases.
     Thus, moving a shopper from being disgruntled to being pleased increases your profitability from that customer and also for other shoppers in the store at the time who observe the interactions.
     The effect is quick and often below the level of conscious awareness. Researchers at University of California-San Diego and University of Michigan offered thirsty study participants a serving of a beverage. Along with this, some of the participants were exposed to a brief image of a frowning face and some to a brief image of a smiling face. The exposure was so brief that any notice of the emotion would almost surely be subconscious. In addition, the exposure of the emotion-laden face occurred along with the person being shown an emotionally neutral face for a long enough time to be consciously perceived.
     The thirsty people shown the smiling face didn’t report feeling much different from those shown the frowning face. However, those shown the smiling face poured more beverage from the pitcher into their cup, drank more from their cup, and were willing to pay about twice as much for the beverage. A smile—even one so brief as to have no conscious effect—made for more motivated consumers.
     Notice, though, that the experiment was done with people who were already thirsty. Emotional contagion nudges purchase behavior, but doesn’t dictate it.
     The infection of emotions spreads from staff to shoppers, too, and among staff. So smile often when greeting customers. And smile often when building teamwork with your employees.
     Yes, there are retailing situations in which a smile is all wrong: If a customer is distraught, and a smile would make you look uncaring. If you’re delivering corrective discipline to a staff member, and a smile would make what you’re saying seem unimportant. Or when a prolonged smile threatens to make you look simply dopey.

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Smile Often 
Answer Customer Questions with Enthusiasm

Thursday, March 28, 2013

Interrogate Shoppers to Produce Epiphanies

In a recent Forbes interview, Robert Mettler, former CEO of Macy’s West Division, discusses the importance of retail sales associates doing detective work. The objective is to produce, for both the shoppers and the salespersons, the sudden, illuminating realizations known as epiphanies. A consumer looking for luggage might be asked, “Are your trips chiefly by plane, train, or car?,” “Do you travel most often for pleasure, business, or a combination?,” and, “Do you generally travel alone or with family?”
     The Forbes piece points out how this type of question-and-answer dialogue generates shopper trust in the salesperson’s competence and joy within a competent salesperson.
     The three question examples I gave are called “closed-ended,” since the shopper can answer each by choosing from a limited set of alternatives presented by the sales associate. Closed-ended questions are useful when opening up an extremely quiet customer.
     A common reason for extreme quiet in customers is suspiciousness. If you ask them to volunteer too much information, they’ll get startled and leave the store. It’s best to begin with, “Which department may I help you find?,” and subsequently move to the open-ended equivalent, “What items are you shopping for today?”
     Open-ended equivalents for the luggage shop include, “For what sorts of travel will you be using the luggage?,” and, “What sorts of items do you intend to pack in the suitcases?”
     Shoppers in a marketing atmosphere filled with fears of privacy being violated still will allow themselves to be interrogated if they see the salesperson using this to generate epiphanies. Research at Carnegie Mellon University and Harvard University suggests ways to increase a shopper’s candor with you. Here’s my translation of the findings into a four-step process:
  • Start with questions which are not sensitive. 
  • Next, give a few examples of the sensitive information shoppers have shared with you in the past. Be sure to protect the identity of the past customers. 
  • Ask an intrusive question in the form, “May I ask you….?” This is a yes-no, closed-ended question. Your question should aim to gather information you’ll find useful in suggesting a personalized solution to the shopper. 
  • If the shopper answers yes, be ready to remember what you’re told. If the shopper seems uncomfortable with your question, follow up with a somewhat less intrusive question and add, “Here’s why I’d find your answer helpful in giving you the products and services which will best fit you.” 
Click below for more: 
Use Closed-Ended Questions Selectively 
Open Up Shoppers So You Can Personalize

Wednesday, March 27, 2013

Lend a Friendly Ear to Loan Debtors

Needing to pay off the purchase of an item from your store results in less enjoyment of that item by the purchaser, according to research at University of Vienna and University of Cologne. It’s in your business interest to have customers find pleasure in their purchases so they will come back to shop with you again and speak favorably to others about your store and the items you carry. To restore the pleasure, encourage customers to return to talk with you about what they’ve bought, and then listen attentively to what they say.
     A general finding in consumer psychology is that a customer’s enjoyment of a product or service slopes downward as time goes by after the purchase. The Vienna/Cologne research, which tracked the emotions of the study participants over time, indicates the slope is substantially steeper for those who pay with financing or build up a credit card balance than for those who pay cash, have saved for the item in advance, or have placed it on layaway.
     Moreover, the consumers who have placed themselves in debt don’t, in general, attribute the quick decrease in enjoyment to their having used credit. They find paying off the debt to be more of a pain than they’d predicted, and the intensity and duration of the negative emotions subconsciously contaminate feelings about the purchased item.
     The researchers propose you caution shoppers ready to make a purchase that they’ll probably end up feeling better about it if they don’t use financing or a credit card. They point to other research which shows that savoring a future acquisition gives a consumer pleasure in itself.
     In the spirit of full disclosure, I share that advice with you. However, I’ll also share my cautions about their proposal. For one thing, it will easily come across as you lecturing the shopper, and most shopper don’t like to be lectured at.
     For another, what you’d be saying to a sold shopper amounts to, “If you’re concerned about the cost of this item, don’t incur debt. Instead, leave my store now, save up your money, and when you have enough, come back.” You’d be turning away a sale. And the shopper might not return. If a shopper does express deep concern about the cost of the item and any necessary debt, I’d prefer to have you say, “I can show you alternatives which have a lower price point.”

Click below for more: 
Think Through Layaway Implications 
Have Post-Sale Product Literature

Tuesday, March 26, 2013

When Thoughtless, Share Thoughts Carefully

What were they thinking?
     Ford Motor Company released an ad in India which included a drawing of three women in the cargo bay of a Ford Figo tied up and gagged. This when a Swiss tourist had recently been gang raped in India, four months after an Indian woman died due to injuries from a gang rape, and news reports were that a woman is raped in India every 21 minutes on average.
     After the ad appeared on a website called Ads of the World, Ford and its agency WPP apologized. As to what they were thinking, it appears the ad was intended to humorously point out the large cargo capacity of the Figo. The humor angle came from the driver of the car being Paris Hilton in caricature and the kidnap victims in the back being the three Kardashian sisters. Another ad in the series depicted auto racing champ Michael Schumacher driving the car and the three victims his long-time Formula One track rivals.
     WPP said the ads, “were distasteful and contrary to the standards of professionalism and decency.” According to TheDetroitBureau.com, the WPP statement also implied the ads were supposed to be limited to in-house use and the paid publication of them was an error.
     Such an implication shows a continued insensitivity to the offensiveness of the ads, whether in-house or widely published.
     Compare this to what happened a couple of years ago when baked goods company Entenmann’s tweeted, “Who's #notguilty about eating all the tasty treats they want?!” This happened on the day that endless tweets of outrage were circulating about the acquittal of Casey Anthony on charges she had killed her 2½-year-old daughter.
     Entenmann’s soon deleted the tweet and then issued a new tweet: “Our #notguilty tweet was insensitive, albeit completely unintentional. We are sincerely sorry.”
     Likeable Media did the original post. They were tracking the #notguilty tag as a trending topic, so hopped on board with its use, but say they failed to first investigate why the tag was suddenly so popular.
     Over the next few days, the “insensitive” apology tweet was retweeted about 100 times and the Entenmann tweet roster garnered countless thank you responses by those who said they understood.
     In conducting your retailing business, you’re likely to avoid those major gaffes. Still, occasional unintended minor thoughtlessness is almost inevitable. When it happens, be careful in publically sharing your thoughts of explanation.

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Cultivate Controversy Carefully 
Skedaddle from a Skittles No-Win

Monday, March 25, 2013

Break Fast for Morning Sales

Why do so many retailers miss out on the opportunity from sales early in the day? A recent “Business Insider” posting asks that question about Quick Service Restaurants (QSRs). McDonald’s expanded into breakfast sales, and now about 90% of those QSRs are open at 5 AM. Dunkin’ Donuts gained a reputation for excellent coffee and also augmented their early morning offerings with an Angus steak & egg sandwich. But after trying to succeed at this day-part, Wendy’s is putting breakfast on the back burner for now.
     The “Business Insider” analysis is that to succeed at morning sales, you have to get up early. It requires careful planning.
     As it happens, this applies to all sorts of retailers aside from QSRs. To motivate yourself to do the planning, recognize how early morning sales are more likely to add to profitability at other times of the day than to take away from it. Food retailers have learned that diners who just enjoyed a good breakfast at the restaurant in the early morning often would like to have the breakfast offerings also available at future lunchtimes. Forbes reports that about 40% of consumers eat on more than one occasion in the morning.
     Know the service expectations of your early morning prospects.
  • People on their way to jobs want super-quick shopping. Bojangles chooses store locations which allow easy access as people are driving to work. You might not be able to do that with your store, and in fact might choose not to if your major business is from people coming by after work. But you can speed up service by offering a limited set of choices early in the day. 
  • Another early morning target demographic consists of senior citizens, and they’re mostly happy to linger while shopping. Senior citizens tend to be more profitable customers when shopping early in the day, so feature merchandise then which attracts them to your store. Researchers at University of Michigan, Singapore Management University, and Ben-Gurion University found that their study participants, who were all at least sixty years old, were better able to analyze selling points in the morning than in the afternoon. For stores which let daylight enter, the morning brightness can help seniors tell the blues from the greens and the foregrounds from the backgrounds. But still favor merchandise which uses bold colors, along with large fonts and high contrast in the product packaging. 
Click below for more: 
Be All You Can Be with Day-Parts 
Help Seniors to Shop Early

Sunday, March 24, 2013

Forestall Mobile Blinders

A Bloomberg Businessweek article chronicles the drain on retail sales revenues from “mobile blinders.” That’s the phenomenon in which customers waiting at the checkout line pull out their mobile devices to look at email and Facebook rather than noticing all the magazines, chewing gum, candies, batteries, CDs, hair clips, and other items prime for impulse purchasing.
     Considering that more than half of American consumers have smartphones, it’s an issue. Single-copy sales of consumer magazines dropped about 8% over the past year, and chewing gum sales dropped about 6%. Of course, mobile blinders are only one explanation. Sales of other non-impulse discretionary items are down as well.
     From my shopper psychology perspective, mobile blinders actually avoid one sales revenue drain: Bored shoppers can change their minds about buying what’s already in the shopping cart. If the customers don't pay promptly, they too often decide to put some products back or just give up and leave. In a troubled economy, sights and sounds at the cash wrap can trigger needless fretting. Add to the rumination plenty of irritation—the kind that comes from waiting—and it's no surprise customers flee.
     We want our customers thinking about their purchases. But if truth be told, we don't want them thinking too hard or for too long. Researchers at Northwestern University and at Radboud University in The Netherlands found that consumers tend to make worse decisions when they ruminate.
     Let the shoppers instead Twitter away their time, keeping hands and minds away from in-store shopping cart abandonment. Or let them check out quickly. The developments in mobile technologies are such that consumers will be less interested in passing the time on their devices, instead using them to scan items and pay.
     So how do you plan to continue selling impulse items? One answer is to merchandise the items in other locations in the store. If you do, I suggest you set up impulse items on displays which intentionally look temporary and are moved periodically. This potentiates the impulse motto, “Buy it now or it may be gone next time.”
     There are downsides to a retail business model which depends for sales revenue on having customers wait in line. Still, you might want to also still keep impulse items stocked by the checkout lines. A considerable percentage of consumers don’t have smartphones, or own them but won’t be putting on their mobile blinders at checkout.

Click below for more: 
Sell Impulse Items to Serve 
Show Impulse Purchase Items for Groups 
Keep the Checkout Lines Flowing 
Make Waiting in Line Interesting

Saturday, March 23, 2013

Feel the Emotions When Negotiating

Whether negotiating with a customer, vendor, or regulatory agency, it’s important to acknowledge emotions. Your emotions and the emotions of the other parties. Business consultants at Harvard University, Center for Creative Leadership, and Cambridge Health Alliance point out that the old school advice for negotiators was to separate the person from the problem. But you’re negotiating with people.
     More than this, neuropsychological research finds that it is our emotional reactions which signal to us which of our demands in the negotiation are most and least important. Good negotiators have emotional intelligence—skills in monitoring one’s own and others’ feelings; discriminating among the feelings; and using the information to guide one’s actions.
     The business consultants recommend a set of questions to ask yourself before negotiating. This is my adaptation of that set:
  • “How do I want to feel going into the negotiating?” Probably you want to feel confident. But if you dig a bit, you’re likely to say you also want to feel uncertain. You see the need to be guarded against other parties taking advantage of you. By identifying the contradictory emotions, you’re in a better position to play them in concert. 
  • “What’s most likely to throw me off emotionally during the negotiations?” Think about the undesired or poorly timed feelings you’ve had during past negotiations and what set those feelings going. These recollections prepare you to sense if and when your emotions are starting to be counterproductive and to devise in advance ways to get your feelings back on track. 
  • “How do I want to feel coming out of the negotiating?” Satisfied, probably. That’s a realistic expectation. But are you expecting to feel triumphant? That might not be realistic, so you’d be setting yourself up for unpleasant emotions to follow, like sadness, irritation, discouragement, and self-hate. 
     Missing from this list, but essential for fruitful negotiating is awareness of the feelings expected and experienced by the others.
     Also, you can introduce emotions into the negotiating. The emotion of amusement, for example. A few years ago, I heard a story about a used-car dealer showing his shopper an older-model Chevrolet in excellent condition and saying, “The price is only $7,000.” The customer replied, “I’m willing to give you $3,500.” The salesman nodded, then grinned mischievously, before responding, “If at all possible, I’d prefer to sell you the whole car.”
     Just be sure you’re laughing with the customer, not at them.

Click below for more: 
Temper Negotiating Tension 
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Synch with Your Shopper’s Brain Before Influencing

Friday, March 22, 2013

Close In on How Shoppers Close Out Use

On average, American consumers annually discard almost seventy pounds of clothing per person. People throwing away clothes could have chosen to resell the items, donate them, or find a way to reuse them. These consumers might have been convinced to use the clothes for “swishing,” that practice of swapping fashions with others for the joy of acquiring new items rather than seeking trades for equivalent monetary value. But instead of any of this, the clothes are trashed.
     If you’re a fashion retailer, cutting down on the throwing out helps the environment. Researchers at Northern Illinois University report that, currently, only about 15% of textile waste is recycled. Moreover, whether or not you’re a fashion retailer, exploring how and why your customers dispose of items can open up profitable opportunities.
     The Illinois researchers say that a marketing reality and an economic reality conspire to build the pile of clothing discards. First, suppliers like Zara and Top Shop intentionally offer low-priced fashions with a short life cycle. Second, the prices of garments imported from low-wage countries are lower than the costs of recycling to obtain fibers.
     Parallel dynamics operate in technology retailing: Anticipating short life cycles and low production costs, retail sales are adding to electronic trash.
     With the intent of reducing environmental waste and building profits, ask shoppers about their disposal of products:
  • Are they taking the products to recycling collectors? Those of your customers motivated to go green would like to hear how what you sell includes previously recycled materials and how your products are biodegradable. 
  • Are they donating while the products still have a useful life? Then team up with your customers and with charities in the community. Have special events at your store where customers and prospective customers donate items. 
  • Are they using their worn-down products in new ways, such as turning old pants into shorts or using old golf clubs for teaching their kids to enjoy the sport? Then it could be that your customers are interested in purchasing shorts from you or in you carrying a bargain-priced line of golf clubs. 
  • Are they trading in the products? Consider adding a resale business in your store. 
  • Are they putting the products on a back shelf at home because they can’t figure out how to use them? If so, distinguish your store by coaching shoppers on proper use of items and, perhaps, make training a profit center. 
Click below for more:
Know How Customers Dispose of Products 
Discover What Purchasers Never Use 
Donate In Ways that Encourage Others to Donate 
Resell Consumers on Buying Used Items

Thursday, March 21, 2013

Give Comparative Feedback to Your Staff

Business consultants at the London School of Economics gave each employee of a German company a monthly report of how the employee was performing and what the employee’s total compensation was compared to other employees assigned to do similar work tasks. The coworkers weren’t identified by name.
     After full implementation of this reporting system, the average jump in productivity for the employees was nearly 7%. That translates into improved profitability.
     Other research, conducted at University of Pennsylvania, indicates that those of your employees who would show the biggest productivity gains from such a monthly report system are those who are not too far down as compared with coworkers and who receive supervisory coaching on productivity improvement.
     The Pennsylvania researchers analyzed data from 60,000 basketball games, including 18,000 National Basketball Association matches. They found that teams which were behind by one point at halftime were more likely to end up winning the game than were teams ahead by one point at halftime. It wasn’t a large effect—about an 8% advantage in odds—but it was a consistent finding.
     Being slightly in back of the leader boosts motivation, and thereby sharpens performance. Here’s how to get the most out of the effect:
  • Choose the comparison employees carefully. People strive to excel when they know they’re playing in the right league. 
  • At the same time, be sure the comparison group is large enough so that the identity of the members of the group is protected. Otherwise, personal animosities can prevent your employees from collaborating as a team. 
  • For employees not performing near the top, help each to select an objective for improvement in the ranking. People do best with goals which are out of grasp and within reach. 
  • Prepare for the next period of comparison. The halftime break in basketball games serves the function of analyzing and strategizing. The teams that were a little bit behind made up for most of the point spread during the first seven minutes after returning to play. In real-life retailing, you can use a break for training, as well. 
  • Allow employees to opt out of receiving the comparison report. In the study of the German company, only one out of the 58 employees showed a decline in productivity with the new system during the time of the study. However, there might be others who find the report distracting or discouraging after a number of months. 
Click below for more: 
Position Your Team a Little Bit Behind

Wednesday, March 20, 2013

Offer the Escape of an ESC

Fulcrum Analytics found that people are more likely to buy certain items when an extended service contract (ESC) is available. This was the case with 60% of digital camera purchasers and 65% of purchasers of major appliances. Strengthening the notion that it is the availability of the ESC which matters in the decision to buy, 56% of respondents to the Fulcrum survey said they’d prefer to buy the ESC at the time of item purchase, while only 23% said they’d opt for doing it shortly after purchase.
     ESCs are a profitable add-on sale for you. They also help ensure customer satisfaction, since if a product fails to function properly, a good ESC avoids the customer having to exchange or discard the item.
     Many consumer advocates recommend against ESCs. They say the average cost of an ESC is much higher than the average cost of making necessary repairs to the product. They also say that when customers purchase ESCs, they're telling the store it’s okay to carry merchandise which breaks down.
     Never leave a customer believing you’ve encouraged them to make a bad decision, so never pressure your customers into purchasing an Extended Service Contract. But researchers at University of Maryland, Rice University, and Carnegie Mellon University find that there are situations where an ESC is a worthwhile escape for the purchaser. In these cases, describe the advantages:
  • Purchasers operating on a limited budget can find it very difficult to pay for replacing the product if it breaks or in handling any unexpected costs for repairs. They'll appreciate you pointing out to them that in buying the ESC now, they're making a fixed payment, removing lots of unpredictability. 
  • Purchasers of pleasure-related technology products, such as video game controllers, don't want to be deprived of use of the item. They're willing to pay for an ESC that offers prompt replacement of the product if the defect can't be fixed immediately. 
  • Purchasers who are expected to repair every broken product in the home—perhaps a husband being viewed this way by his wife—may be happy to pay a fee to avoid the time and trouble of repairing at least this one product. 
     Keep in mind that in the Fulcrum study, it was the availability of the ESC which influenced the purchase decision. Even if the customer doesn’t buy one, you offering it can help make the sale.

Click below for more: 
Make Extended Service Contracts Worthwhile 
Present Warranties as Insurance, not Assurance 
Implement Tactics Strategically

Tuesday, March 19, 2013

Go Fourth in a Five-Item Horizontal Choice

Research findings from University of Hong Kong and National University of Singapore indicate that when a customer appears to be in an upbeat mood, they’re more likely to select either the first or the last alternative you propose verbally than to select a middle alternative.
     However, when you show the shopper choices arranged horizontally, such as you might do in online selling or in-store shelf arrangement, shoppers will be drawn to an option appearing neither first nor last. If there are five choices, the strongest draw will be to the choice at position four, according to researchers at University of Navarra in Spain, London School of Economics and Political Science, and the U.K.’s King’s Fund.
     Two distinctive features of the research:
  • The choices made by the consumers were real-world preferences for a hospital at which the consumer would receive non-urgent care. This was a decision with consequences rather than a trivial selection in an unrealistic situation. 
  • The eye movements of the study participants were tracked. This allows for insights about the way in which the selection was made. 
     The alternative at position four had a strong draw even when performance assessments for the five hospitals were shown in order from highest to lowest official rating, so the alternative at position four did not have the highest rating. The hospital with the highest ranking was very likely to be selected, but the hospital at position four was much more likely to be selected than you’d predict based on its rating.
     Why do consumers do this?
  • People will continue a search beyond the best alternative. Other research has shown that when consumers are presented alternatives in which the second is better than the first, they want to keep looking for an even better alternative. The Navarra/London/King’s Fund researchers spotted study participants who spent the most time looking at the highest-ranked hospital, but couldn’t seem to prevent themselves from continuing to look beyond the top-rated choice and then ended up picking it. 
  • In a horizontal sequence, the middle is a more comfortable visual and cognitive resting place than either the first or the last position. So why isn’t the strongest draw to position three, exactly in the middle? Other research has found that items displayed toward the right of the visual field will—all else being equal—be estimated by shoppers to possess higher quality. Voilà, position four in a five-item arrangement. 
Click below for more: 
Guide Choice by Sequence of Presentation 
Humor Your Customers 
Assume Higher Anchors for Right-Side Items

Monday, March 18, 2013

Vend Machine Sales As High-Tech

Vending machines are an old-fashioned selling channel. Yet most current stories of successful vending machine implementations are about new-fangled technology.
  • Hundreds of Macy’s stores have had vending machines to dispense electronics products. Signage tells shoppers they can seek advice from sales personnel about what to purchase from the machines. 
  • Best Buy Express vending machines are located in airports, each machine selling those items from the Best Buy line with which the customer has high familiarity. Considering that Best Buy closed fifty of their Big Box stores last year and is pulling back support for the Geek Squad business component, according to the Minneapolis Star Tribune, expect to see more Best Buy vending machines. 
     Shoppers between ages 18 and 29 years—called variously Gen Y and Millennials—like to buy from vending machines. The explanation given is that young adult consumers embrace technology. Gen Y seeks the speed associated with high tech. Kraft Foods and Samsung developed a vending machine which allows the customer to select multiple items rather than make each purchase separately. Don’t slow down the shopper by requiring cash exchanges. Have machines that accept credit cards, debit cards, and mobile wallets.
     Selling to older consumers, use technology to assure them of quality. Senior citizens often associate vending machines with stale food and cheaply-made tchotchkes. To change those sorts of barriers to usage, Canteen’s 2bU vending program features local and organic items.
     Even if you’re selling nutritionally vapid stuff, technology adds high-class polish. The Vend Ever Cotton Candy Factory produces the confection while you watch, and the output is said to be warmer and fluffier than what you could buy at the fair booth next to the deep-fried Oreos stand.
     With that older demographic more willing to spend time paying with cash, there can be another tie-in to an increased interest in vending machine sales, speculates The Independent in the U.K. It’s anonymity.
     At the vending machine, consumers don’t have to identify themselves or interact with a salesperson if they choose not to. They need not be embarrassed by their purchases. Just like sitting in front of the computer keyboard. Or wanting a computer keyboard from a vending machine. At the machines located within Facebook headquarters, you can get a replacement keyboard or even a throwback to paper stationery. But you do have to scan your high-tech ID card for the stuff to drop down into the chute.

Click below for more: 
Position Yourself for Vending Machine Selling 
Incorporate Vending Machine Technologies 
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Sunday, March 17, 2013

Factor In Fuel Cost Vacillations

Using results of a survey by marketplace intelligence firm Prosper Insights & Analytics, the National Retail Federation is warning U.S. store operators that concerns about gas prices are affecting shopper spending.
  • The impacts of the concerns on spending are greater for shoppers ages 18 to 24 than for those 65 and over. Probably related to this, the impacts are greater for those making less than $50,000 a year than for those making more than that. They’re greatest among consumers in the Southern states and least among consumers in the Northeastern states. 
  • Overall, about 42% of the survey respondents said they’re driving less. The major spending impacts are on dining out, vacation travel, and clothing. The major shopping impacts consist of taking fewer shopping trips and shopping closer to home. 
     Prompts in the survey included “How have fluctuating gas prices impacted your spending?” and “As a result of fluctuating gas prices, are you doing any of the following?” Notice that the word was “fluctuating,” not “high.” The concern expressed by consumers appears to be due to the unpredictability in ups and downs of the cost of fuel.
     When shoppers feel substantial uncertainty from any source, they assess the competence of the retailer more closely. Researchers at University of California-Los Angeles found that consumers describe competent retailers as reliable, intelligent, and successful. Impressions of being daring, spirited, and exciting can detract from the image of competence. The Prosper results indicate this will be most important to younger consumers, those of less financial means, and those in the Southern states.
     It’s likely you’re also suffering uncertainty about fuel costs and their effect on your retail pricing. You might be tempted to add a fuel surcharge. The argument for doing this is that your customers all realize gasoline prices are rising.
     Partitioned pricing, in which you state an item’s cost as a main price plus one or more surcharges, can work. However, the problem with a fuel surcharge is that the partitioned pricing calls attention to transportation as the reason for a price increase on an item. Researchers at University of Pennsylvania and University of Florida found that customer anger is most likely when the retailer's explanations for increases in product costs are in terms of transportation or insurance. They concluded that the explanations most likely to head off customer anger center on the cost of goods to the retailer from the supplier.

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Saturday, March 16, 2013

Use Store Windows to Build Sales

A traditional English proverb, perhaps based on a biblical quote, reads, “The eyes are the window of the soul.” Consumer psychologists might reply, “The store windows are the mirror of the retailer’s mind.” If your store space includes exterior display windows, take heed of their influence on the shopper.
  • Know your audience. Window displays designed for drive-by viewers need to be larger and bolder than those designed for walk-by traffic. 
  • For walk-by traffic, tall and slender conveys luxury. Research findings from University of Twente, Plymouth University, and Ecolab indicate this rule applies to mannequins and signage in the window display. 
  • Featuring merchandise in a store window primes the shopper to consider those items of merchandise as having special appeal when the shopper subsequently sees them in the store. This effect operates on the same psychological principle as does a celebrity endorsement. 
  • Displays that portray the product or service being used trigger imagination of usage by those looking at the window, and imagining usage builds purchase likelihood. This is most effective when the consumers viewing the window display consider the usage portrayed to be by someone the consumers think of as similar to them or someone they want to become. 
  • Consumers seek shortcuts when making shopping decisions. This fact is of benefit to retailers as well as to shoppers. Window displays can qualify prospects by showing the types of merchandise you carry and the price level. If your store carries a good-better-best range, shoppers will appreciate indications in the display of where in the store to find the price-quality category of items they’re seeking. Including representative items from the range tells the shopper you’re not limited. 
  • Changes stimulate interest. Because it’s easier to reconfigure a window display than to remerchandise the shopping area, changing window displays regularly is a cost-effective way to give consumers the novelty they like and convince them you’re not in a rut. 
  • You also want to convince the consumers to pay attention to store cleanliness. Keep those window displays tidy. You and your staff are likely to be spending more time looking at the body of the store than at the windows. When your windows fulfill their full potential, the shoppers will be introduced to the body when viewing those mirrors into your mind. 
     And if your store does not include exterior display windows, adapt these tips for displays inside your shopping areas.

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

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Mind Your Windows

Friday, March 15, 2013

Respect Consumer Rights

Consumers International has declared today as World Consumer Rights Day for 2013. It was on March 15, 1962 that U.S. President John F. Kennedy outlined to Congress the four components of what later was called “The Consumer Bill of Rights.”
     Here’s my look at each of the four through the lens of shopper psychology:
  • The right to safety. Products should cause no physical harm when used as instructed. As retailing professionals, we’ve an ethical obligation to check that instructions are clear on products offered for sale. With vulnerable populations like children and the elderly, we should be checking that instructions are understood or are given to responsible care givers. 
  • The right to choose. Our shoppers deserve to be offered choices. We shouldn’t discourage shoppers from considering other options than what we carry in our stores if those other options might better meet their needs or provide better value. We should instead ensure full value for the items we sell. When selling items which are necessities, we should either carry in the store or be able to recommend sources for choices carrying different price points so that the economically disadvantaged can get what they need. 
  • The right to be informed. Offering choices isn’t enough in itself. Retailers should give consumers enough information to adequately guide selection. This should be done in a way that is not overly intrusive, though. Give advice to shoppers when asked. The exception is with safety issues. Warn your customers if you believe they are about to make a clearly dangerous purchase decision. This goes back to the right to safety. Also, give your advice before the purchase. After the purchase, give reassurance that the shopper has made a good decision. 
  • The right to be heard. President Kennedy said that retailers have an obligation to hear consumers’ complaints and concerns. Actually, from a shopper psychology perspective, it’s an opportunity more than an obligation. Customers who feel they’re treated fairly when they complain tend to become more loyal to your store. They develop gratitude for the high quality resolution and often a bit of guilt for making a fuss. Respond promptly to customer complaints. But also assess the real reason the customer is complaining and discover what the customer is expecting you to do. If it's not clear, ask: “What do you suggest I do to make things right?” This redirects the conversation from argument to teamwork. 
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Thursday, March 14, 2013

Set the Moral Tone Which Fits

Yesterday’s election of Pope Francis and his address from the balcony of St. Peter’s Basilica can remind us of the importance of the proper moral tone for true success in our lives. The world will be watching how the incoming pope chooses to welcome into the Church those currently seen as outsiders. CBS News pondered whether an openness to change is being signaled by the pope’s choice of a name which has never before been used by a pope.
     In the secular world, researchers at Pennsylvania State University and University of Seoul explored how the proper moral tone associated with a retail store or retail brand leads to its welcome as part of a consumer’s in-group. This has less to do with the former Cardinal Jorge Mario Bergoglio of Argentina than with the late Professor George Kingsley Zipf of Harvard University.
     Prof. Zipf found that the most common word in English—“the”—occurs about twice as often as does the second most common word—“of.” This second-most-common word occurs about 125% as often as the third most common word—“and.” A similar sort of frequency distribution occurs with other phenomena, such as the sales figures for the top seller in a category compared to sales figures for the second-best seller. It’s called Zipf’s Law.
     If your store is not the market leader or if you’d like to increase sales of a less popular brand on your shelves, Zipf’s Law means you’re struggling against the tide. People root for the underdog, but they also love to associate with a winner.
     The proper moral tone helps, say the Pennsylvania/Seoul researchers, so decide what moral tone you’d like your store and brands to carry and then take steps to earn that perception. As a general rule, consumers want to spend their money with businesses and on items which they see as having moral integrity. Ethics indicates reliability.
     Still, it does not always work that way. A part of all of us enjoys dealing with a bit of a rascal. This is because there’s a part of all of us which is at least a bit of a rascal. Especially in individualistic cultures like the U.S., consumers are fascinated with famous rascals.
     Customers with strong morals don't like being around a rascal. But there are plenty of shoppers who count on the rascals to help them solve problems by taking advantage of others.

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Wednesday, March 13, 2013

Stock Slow Sellers Which Reassure Customers

A while back, researchers at University of Pennsylvania and McGill University were taken by the story behind the bankruptcy of grocery retailer Super Fresh. A contributing factor, so goes the story, was the retailer eliminating certain slow sellers from the shelves. By the time the retailer realized how important those deleted items were to the shoppers, those shoppers had taken their habitual business elsewhere.
     How could this be? A profitability maxim for the small to midsize retailer is, “Don’t fall in love with your inventory.” Turn your slow sellers into cash, it’s said. If necessary, lower the selling price to below what you originally paid for it. Free up the shelf space and the money so you can use it on high turnover merchandise.
     But with Super Fresh, those slow-selling items were serving a function other than making money on their own. They were reassuring customers that, if they needed the items, this was the place to go for them. You might be carrying items with very low turnover because stocking these items lets customers know you carry a complete set. The buy-it-once-in-a-lifetime fasteners are on the shelf because your store is known for carrying whatever-you-need-in-your-lifetime fasteners.
     When you identify a slow-seller candidate for elimination, ask questions:
  • “In the consumers’ minds, is this part of a set, such that if I eliminate the item, it will look like I no longer carry a complete line?” If so, consider how significant sales of that line are to your profitability. If it’s not much, go ahead to purge the slow-seller. 
  • “Is there another item I carry which can serve well as a substitute?” If so, there’s low risk to your profitability in no longer stocking the slow seller. The Pennsylvania/McGill researchers give the example of a shopper who comes in looking for a dress in a certain style and size and prefers to buy a red one, but is satisfied with a blue one. 
  • “If I stop carrying the item, could I take special orders with a delivery time acceptable to customers?” If so, a sign in place of the item might reassure customers you’re still the store of choice. 
  • “How high can I set the price without it appearing that I’m aiming to gouge people?” Most of your customers won’t be shopping for the item, so they’re less price sensitive Those who do buy the slow-seller are paying for convenience. 
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Tuesday, March 12, 2013

Yo, Gird Your Retailing Chops for Health!

Yogurt and yoga are popping up in the nation’s strip malls, according to a USA Today feature. Kimco Realty, which owns and operates North America’s largest portfolio of neighborhood shopping centers, says they've seen a fivefold increase over five years in the number of tenants featuring frozen yogurt. At the same time, the number of retailers in their centers selling ice cream, with its higher fat content, has decreased markedly.
     GNC, which sells nutritional supplements, has opened more stores. Gyms, yoga studios, and restaurants selling organic entrées also are showing a healthy presence. Mobile stores carrying fresh produce are pulling into food deserts—low-income communities with limitations on access to a large grocery store—to sell good health. Pharmacies are providing preventive health services.
     Whatever you retail, strategize to meet consumers’ interest in health. It can add to your revenues, it’s good for your community, and it’s compatible with the relationship between smaller retailer businesses and healthier residents.
     When researchers at Louisiana State University and Baylor University analyzed data from 3,060 counties in the contiguous United States, they found that a thriving community of merchants serves both as a cause and an indicator of investment in the neighborhood.
  • More interest in disease and injury prevention. There’s a greater push for recreational facilities, health education, workplace safety, anti-smoking legislation, and buying at local farmers’ markets. 
  • Sustained support for health care access. There were more bond issues for health infrastructure, such as community hospitals, and drives to recruit physicians and other health care professionals. 
  • Lower rates of death, obesity, and diabetes. 
     The underlying factor is “collective efficacy.” Researchers at University of Bristol found that the sorts of trust and cooperation seen among locally-based retailers generate a sense of ability to accomplish great things. There’s also a component of competition. The merchants in the community want to prevail over the merchants in other communities, and, the research finds, local business leaders compete for influence and recognition among themselves. This competitive attitude energizes greater accomplishment.
     Successful small businesses are owned and operated by people with an entrepreneurial spirit. The psychology of the entrepreneur cultivates self-development. You’re responsible for yourself,” says the entrepreneur. “If it is to be, it is up to me.” “Take care of yourself, your family, your customers, and your customers’ families.”
     Because collective efficacy is a state of mind, the benefits include mental health as well as physical health.

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

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Monday, March 11, 2013

Attach to Customers Selectively

The notion of Customer Relationship Marketing (CRM) is that you’d like your customers to form an attachment to you, your store, and the distinctive products you sell. This enables cross-selling of related items during a sequence of visits. But attachment is not identical to closeness. There are consumers who will say, “The people at that store make me uncomfortable with all their friendliness.”
     Analyzing what psychologists call “attachment style” can help you decode the degree of closeness a customer prefers. Understanding attachment style also can help you develop more profitable CRM relationships. Two cautions, though. First, it works best when you also analyze your own attachment style and reflect on the retailer-shopper interactions. Second, an analysis of attachment styles should probably be reserved for frequent shoppers whose business is important to you. The analysis requires careful observation of your behavior and the frequent customer’s over time.
  • Secure attachment. Customers with a secure attachment style are characterized by the statement, “I’m comfortable depending on this retailer and with this retailer counting on my business, although if the business relationship with this retailer didn’t work out, I could comfortably move on.” These are shoppers with whom you can form a close bond. 
  • Anxious-preoccupied attachment. These customers are characterized by, “I yearn to depend on this retailer to satisfy my needs, but I’m worried the retailer doesn’t sufficiently value me and will let me down.” Show closeness to an anxious-preoccupied customer and they’ll cling to you, testing to see if you’ll disappoint. Be sure you’re ready to go all the way to meet any commitments. 
  • Fearful-avoidant attachment. “I’m afraid that if I become too close to the retailer, the retailer will think they can exploit me.” These are the customers made uncomfortable by exuberant friendliness. A cool, but supportive, relationship is best. 
  • Dismissive-avoidant attachment. “For now, I’m comfortable having no closeness with this retailer, even though I shop here regularly,” say customers showing this attachment style. As long as you acknowledge the need for independence in these people, your repeated shows of friendliness can win them over as prime examples of the payoff from CRM. 
     Researchers at University of Kentucky and Arizona State University used a framework like this to analyze attachment style, preference for closeness, loyalty, and cross-buying among 975 insurance customers over a three-year period. Their results verified the value to a retailer of understanding attachment styles of long-term customers. 

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Sunday, March 10, 2013

Give the Gift of Uncertainty, Love

In Bette Midler’s rendition of “Gift of Love,” she yearns for certainty as she sings, “I’ll have you beside me. Who could ask for more?” But consumer behavior researchers at University of Miami and Greece’s ALBA Graduate Business School say a retailer’s use of a gift as a promotion will benefit from uncertainty if love’s involved. When the product considered for purchase is for pleasure, not knowing which of a set of possible gifts will end up being the bonus tends to increase purchase likelihood. The surprise is itself a present.
     In using this research finding to shape your promotional gifting, know the limitations:
  • If the item being considered for purchase is primarily for functional use rather than for pleasure, the purchase likelihood is higher when there’s certainty about the gift. 
  • If a shopper is paralyzed with indecision between two alternatives, add a gift to accompany one alternative. Researchers at University of Chicago and Columbia University find that with financial investment decisions, it even works to offer a small gift with both alternatives because this moves the decision toward the riskier choice, breaking the tie. The researchers called this the “mere token effect.” 
  • Consumers identifying with an Asian culture are more comfortable when they believe they’ve earned a promotional reward. Researchers from Baruch College, University of California-Berkeley, and San Francisco State University surprised people with promotional gifts. Those from the United States enjoyed their surprise gifts more than did those from Hong Kong, Singapore, Taiwan, or Vietnam. Because the reward appeared to be unearned, the East Asian recipients seemed to feel it produced a menacing imbalance. 
     Also know the ramifications of running out of a promised gift. Some participants in a Stanford University study were given a gift, while the rest were denied the gift. Each participant was then asked how much they’d be willing to pay for the gift if purchasing it. The average price was about 45% higher among those denied the gift.
     Next, those participants denied the gift earlier were given the gift. Now every participant had the gift, and each of them was asked if they’d like to trade the gift for another item, which the researchers had determined was of about equal value. Among those who got the gift at first, about 40% said they’d trade. Among those denied the gift at first, about 80% said they’d trade. Denial led to dislike.

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Saturday, March 9, 2013

Escort Shoppers on In-Store Travel

You realize that when your shopper asks where an item’s located, it’s better to walk the shopper there than to extend your finger and say, “That way.” You and your staff know the store layout so well that it’s too easy to assume the shopper won’t get lost on the way, even in a small store. Older shoppers are especially likely to feel offended by the extended finger. They might abandon their shopping carts and leave in frustration.
     On the other hand, there are many shoppers—more often men than women—who prefer to walk around a store by themselves, and there are times—such as if there are few staff and many shoppers—when it’s difficult to lead one customer to a destination. In these situations, we’d still like to encourage the shopper to travel. As the shopper walks, they’ve the opportunity to see more of your merchandise which might interest them and read more signage about the services you provide.
     Researchers at New York University-Stern, University of Pittsburgh, and Drexel University found that a coupon requiring shoppers to travel farther from their planned path to obtain the discounted item resulted in an average increase in spending of about $21.00. When the coupon didn’t require wandering from the planned path, the increase was instead about $14.00. The researchers suggest that retailers use mobile technologies to identify a shopper’s location in the store and offer a deal that requires travel to another part of the store along with navigation instructions.
     A personal escort can be even better, though. As you walk with the customer, talk about the items you’re passing by. You’ve heard what item the shopper is looking for, and you can see what items the shopper’s already selected. What else might this shopper also benefit from having, but perhaps overlook? The motivated shopper can have tunnel vision. They’re on a targeted search.
     This is a different situation than with a bounce-back coupon, where the customer can get, let’s say, 50% off any single item selling for under $30.00. The shopper holding that coupon will walk up and down aisle after aisle, carefully evaluating one item after another, turning over in their mind how they’ll use this opportunity.
     The salesperson escort who appreciates what your store carries can stimulate some of that passionate examination, whether or not the shopper has a coupon, by being a guide with pride.

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Friday, March 8, 2013

Start Small for Creative Efficiency

“Please step up to this bathtub which is filled with water and let me describe the task you are to do. As you see, on the edge of the bathtub there are three objects—a bucket, a teacup, and a teaspoon. You are to empty the bathtub of water with a minimum expenditure of energy, since there are also other tasks I’ll be giving you to do at the same time. A team of retail efficiency experts will be evaluating your performance. Okay, start emptying water.”
     How would you do it, do you think? Bailing the water out of the tub with the bucket? It certainly seems that would use up less energy than bailing it out with the teacup or teaspoon. But if your objective is to save energy, there’s an even better alternative: Open up the bathtub drain. In that way, you can devote your physical and mental energies to the other tasks. And you don’t need to think so much about where you’ll dump each bucket of water.
     When faced with retailing problems, our creative efficiency can be compromised by attending only to the alternatives which are right at hand. In 1966, psychologist Abraham Maslow wrote, “I suppose it is tempting, if the only tool you have is a hammer, to treat everything as if it were a nail.”
     In my supplying you with the bucket, the teacup, and the teaspoon and saying to empty the bathtub of water, Maslow’s point became even more pointed. I set up a sequence of container sizes, making it more likely you’d be drawn to considering container size as the measure of efficiency. Research findings from New York University-Stern and University of British Columbia indicate that if I’d given you one of the objects instead of the progression of three, you’d be more likely to pull the plug on my trickery.
     If you start out small, with fewer problem-solving options available, you’ll look around, breaking loose of constraints imposed by the readily available.
     A classic exercise to develop creativity is to give someone a few objects—like a paper clip, facial tissue, and scrub brush—and ask the person to list all the different ways the objects could be used all together. This is harder with six objects than with three. In their bathtub study, the New York/British Columbia researchers also found that creativity developed better with three-item than with six-item research participants.

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Thursday, March 7, 2013

Reduce Risk Fears by Introducing Choices

Shoppers are more willing to take a risk in making a purchase when presented a few options to select from rather than only one alternative. Therefore, even if you have decided on the one choice which would best meet both the shopper’s specifications and yours, it’s good to include at least one or two other possibilities for the shopper to consider.
     Researchers at University of Chicago, University of Miami, and Shanghai Jiaotong University found this general rule to be true in a range of consumer contexts. Their studies also add to what we already knew about six types of risk shoppers consider:
  • Functional risk. “Will the product or service solve my problem or meet my needs effectively and efficiently?” The shopper thinks of this as a probability measure. There’s evidence that consumers will actually spend more time deliberating over two alternatives which are almost certain to solve a problem than when there’s a noticeable functional risk difference between good alternatives. 
  • Financial risk. “Am I paying too much money?” 
  • Time risk. “If I make this purchase, does it mean investing too much time for what I gain?” Time risk includes considerations about the time to make the choice, get delivery of the item, master use of the item, and return the item if necessary. 
  • Physical risk. “Is my health or safety or that of those I care about in danger if I use this item?” 
  • Social risk. “If the people I admire know I’m using this product or service, am I in danger of falling out of favor with them?” 
  • Psychological risk. “Does using this product or service conflict with the image I want to maintain of myself?” 
     In presenting more than one alternative, your phrasing might, “The item I’m suggesting to you is better than the alternative you’ve been considering.” Researchers at Babson College and Western Kentucky University say this generally works best with new customers.
     “The alternative you’ve been considering is not as good as the item I’m suggesting to you,” is generally best for established customers.
     Or you could say, “What I’m suggesting to you is just as good as the alternative you’ve been considering. It’s not that one is better or one is worse.” Researchers from Indiana University, Northwestern University, and New York University say this one works well if the shopper believes the decision is a risky one even when given a few alternatives to consider.

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Wednesday, March 6, 2013

Reflect Carefully on Marketing to the Mirror

What’s a recent movie you liked? Keep that title in mind, please, and estimate what percentage of the people you know also liked the movie. Now please do the same thing with the title of a movie you did not like. What percentage of people you know also did not like that movie, do you think?
     Researchers at University of Michigan and McGill University find that people are much better at guessing what other people will dislike than at what they’ll like. It was true for movies and also for ice cream sundaes. People who liked a certain blend of ingredients—such as mint ice cream topped with hot fudge and sprinkled with walnuts—overestimated that others would like it by an average of 10%. Those who disliked the combination the experimenters had described overestimated others’ dislike by an average of less than 1%.
     Notice that in either direction, it was an overestimate, even if by a bit. Moreover, researchers at University of Michigan and University of Chicago find that in making predictions of like and dislike, we tend to assume that other people come to their conclusions using reasoning like our own. Even if they prefer Coke and we prefer Pepsi, we’ll think that they used the same criteria and weighting of criteria as we did in coming to our decision.
     Let’s apply this to your retailing decisions. When you assume your target customers hold the same preferences as you and make their purchase decisions the same way you do, that’s marketing to the mirror. It can mislead you.
     Psychologists use the term “projection” to refer to the tendency we all have to assume that what we enjoy is embraced by those around us. In reality, this assumption can work for the very small retailer who is just getting the business started. The hobby shop owner and the purveyor of specialty foods can pay the bills for a little while by depending on a cadre of consumers who share the merchant’s niche passion.
     But to grow their businesses, retailers must broaden their target markets beyond themselves. The flip side of projection is called “introjection.” It consists of incorporating the perspectives of others into our own thinking. Allowing the preferences and predilections of others to guide our actions.
     It’s harder for people to engage in introjection than in projection. But reflect on the importance to you of doing it.

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Broaden Target Markets Beyond Yourself

Tuesday, March 5, 2013

Tastefully Market the Icky

According to VentureBeat, the people at Thinx have developed an item with a potential for billion dollar profits, but worry whether retailers like you will market and merchandise the item effectively.
     It’s women’s underpants. Yes, lingerie shops show off ladies’ briefs with sexy as the marketing message. But Thinx underpants sell for from $26 to $89 a pair, and the distinctive advantage is not so much sexiness as sidestepping ickiness. These briefs are designed for women to wear during their periods. They’re leak and stain-resistant, anti-microbial, and moisture-wicking absorbent.
     The problem is that market research indicates women are reluctant to reveal their attention to their periods while shopping in a store, and consumer research indicates men will avoid selecting lingerie items merchandised in the vicinity of anything associated with women’s periods.
     Thinx thinks a solution will come from their consultation with the merchandising team from super-successful retailer Zappos and from a socially conscious tie-in. For every pair of Thinx sold, seven pairs of washable, reusable pads will be provided for women in Africa, where acquisition and disposable of such products are challenging.
     What tactics will you have for avoiding the tacky when marketing and merchandising items your shoppers might consider to be uncomfortable to consider in public?
     Overall, it might get easier. In contemporary society, decreases in personal modesty have affected all sorts of product and service retailers. Clothing. Physical fitness. Residential construction. Even furniture. It influences what you offer and how you display the alternatives. Kimberly-Clark’s “U by Kotex Click” are packed in reusable tin containers, each carrying one of 56 patterns, and the brand name appears on shelves in strikingly bold colors over a black background. Along with this, K-C products for incontinence and urine leakage are coming out from the shadows.
     Still, Kimberly-Clark has been there before with results which were not positive. In late 2001, K-C announced “the most significant category innovation since toilet paper first appeared in roll form in 1890.” Moist Cottonelle Fresh Rollwipes came in a plastic dispenser which clipped onto a regular toilet paper holder. Although market research said that almost two-thirds of adults were in the habit of wetting toilet paper or using a moist wipe, the product failed to sell well. A post-mortem concluded that shoppers had absolutely no interest in making their store purchases of this sort of body maintenance product any more noticeable by going for innovation.

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Monday, March 4, 2013

Sense the Dollar Stores’ Appeal

The dollar store format has been doing well enough that all retailers should analyze how aspects of the format might work well for them.
     Dollar Tree, Family Dollar, and Dollar General have among them more than 20,000 locations. Dollar General alone has more retail stores than any other U.S. retailer. During 2012, Family Dollar opened 475 stores, and they plan to open about 500 more this year.
     According to Consumer Nation, the average annual income of a Family Dollar shopper is $40,000. The smaller retailer can emulate this appeal to the thrifty consumer with a bargain store format. But all retailers—including those catering to an upscale demographic—could benefit from incorporating some aspects of dollar store retailing:
  • For the short term, market the functional aspects of whatever items or services you’re selling. People shop at dollar stores because saving money is functional. In recent months, Family Dollar has seen an increasing percentage of revenues from sales of consumable necessities and a lower percentage from sales of discretionary items. 
  • For the longer term, mix the fun with the functional. The move away from discretionary items at the dollar stores might be a blip due to the January increase in payroll taxes, the upward costs of gasoline, and delayed federal tax refunds. Dollar Tree made lots of profits toward the start of this Great Recession by selling party supplies at low prices. Many of the Dollar Tree stores have freezers and coolers to stock grocery items and include among those grocery items fun alternatives such as ice cream. Researchers from New York University and University of Pennsylvania found that when people select a healthy item, they then become much more likely to select a fun item. In choosing a fun food item, they are still interested in the nutritional value. But they could be selecting the fun item because it’s not nutritious. 
  • Include limited-stock, limited-time offerings. The dollar stores do this largely from necessity. They get a good deal on merchandise which suppliers are anxious to sell. The message is “Buy it now because it may not be here for long.” Even with higher-priced items, this fear of missing an opportunity motivates purchase behavior. Realize this is related to, but different from, the “treasure hunt” appeal, which says you’ll be surprised by what you find. Treasure hunts work best with unusual items. “Buy it now” works best with commodity items. 
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