Friday, May 31, 2013

Honor Social Responsibility

Will the deaths of more than one thousand garment workers in last month’s Bangladesh factory building collapse influence your store operations, even if you don’t sell clothing? Will your shoppers be thinking closely about the conditions under which all the products they buy are manufactured?
     Knowing the psychology behind such consumer reactions can guide you.
     According to Associated Press, about thirty international brands—including Swedish retailer H&M and French retailer Carrefour—along with U.S. retailers Tommy Hilfiger and Abercrombie & Fitch have signed onto a legally binding contract to pay for building improvements in Bangladesh garment factories. However, the 9,000-member National Retail Federation strongly opposes the contract, saying the terms do not adequately insulate signees from unlimited liability. But a coalition of U.S. senators has written to major retailers urging them to endorse a global pact.
     All this indicates that the issue of working conditions will stay in the news for a while. And all this happens as the recently-released “2013 Cone Communications/Echo Global CSR Study” concluded consumers across the world want businesses to show social responsibility. Almost 90% of the survey respondents claimed they consider a business’s social and environmental commitment when deciding where to shop and what to buy.
     Do almost 90% actually do that consideration in practice?
     Probably not. Your shoppers find it emotionally challenging to consider the whole truth. One realm in which this happens is the shopper’s sense of social consciousness.
     Your customer loves the design of a shirt on your store shelf, but despises the labor practices of manufacturers of some of the products your store carries. So they don’t look at the label before putting the shirt into their shopping cart.
     Your customer instantly realizes the mahogany table now on your showroom floor would look perfect in their dining room, but they could never look themselves in the eye if they thought the mahogany came from an endangered rain forest. So they don’t give it a thought.
     Researchers at Washington State University and University of Texas-Austin called this phenomenon “willful ignorance.” They found that willful ignorance operates subconsciously and it occurs because handling the full truth would be overly painful for the person. Shoppers who care the most about an issue are the ones most likely to hide from the reality.
     When it comes to social responsibility, I recommend you do what’s right based on honor, not from fear of consumer boycotts.

Click below for more: 
Profit by Showing Social Responsibility 
Acknowledge Customers’ Willful Ignorance

Thursday, May 30, 2013

Envision Parity Pricing

Prescription eyeglass retailer Warby Parker has opened its first stores. A broad selection of the inventory is all priced the same, at $95. The tactic, called parity pricing, has served Warby Parker well in online sales.
     Decades ago, parity pricing was popularized by Swatch in selling their decorative watches. These days, parity pricing is often used by restaurants on dessert menus. Many diners hesitate ordering dessert. They feel full from having just completed their meal. They know desserts are a danger to diets. But if truth be told, they're hankering for dessert to the point of looking for an excuse to order it.
     Here's where the fixed price menu comes in. As research at Northwestern University confirms, consumers 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 eases the decision process.
     Although the price fixe menu with alternatives for each course is more common in Europe than in North America, price fixe in the form of parity pricing is seen in at least a few restaurants everywhere you go in the world. What's of more use to you, though, for what you sell beyond restaurant menu items is that parity pricing significantly facilitates sales of many sorts of products and services.
     But only under specific circumstances. Parity pricing is most effective as a selling technique with items where the prospective buyer considers the purchase to be particularly risky. That might be because the buyer believes the price to be high, which involves financial risk. The Warby Parker use of parity pricing is notable in that most consumers consider eyeglasses to be a utilitarian rather than luxury purchase. Spending more money for designer eyewear can be justified by keeping the attention on the eyeglass instead of the frame.
     If the purchaser is aiming to get a distinctively expensive item—such as to show off to others or to feel indulgent—parity pricing can be downright frustrating. Warby Parker does offer some eyeglasses at above $95, and restaurant menus do include premium entrees and desserts. Still, when frugality is honored over frivolity, parity pricing could ease your shoppers' indecisiveness.
     Moving the indecisive shopper does sometimes seem to require a superhuman effort. Warby Parker might be an inspiration here, too. Their eyeglasses are due to appear in the upcoming “Man of Steel” movie.

Click below for more: 
Use Parity Pricing to Help Customers Decide 
Motivate Indecisive Shoppers with Brand Names

Wednesday, May 29, 2013

Analyze Your Visual Merchandising Design

People are more likely to buy from your store when they consider the store layout, the merchandise display, and the items themselves to exemplify good design.
     Research findings from Simon Fraser University in Canada and Copenhagen Business School indicate that design in a retail setting refers both to ease of use and visual aesthetics. Further, the consumer’s conclusions about design are co-created by the supplier and the consumer. For example, the supplier presents a product intending it will be used by consumers to carry out certain tasks or fulfill certain functions. The consumer tries out the product, probably for the purposes intended by the supplier and maybe for other uses not anticipated by the supplier, and then the consumer concludes how easy it is to use. The supplier wants the product to be physically attractive, and the consumer decides how attractive the product is.
     Further, there is a spread in the consumer’s mind of impressions about store design, merchandise display design, and product design. An item of mediocre design carrying the Apple name could garner a price premium because of the compelling reputation for superb design earned by the Apple portfolio. The physical configurations of Apple Stores are more likely to be judged as excellent because of the brand reputation.
     Each consumer carries into his or her judgment of design his or her individual skills and preferences. When asked about ease of use, your shoppers might be able to readily describe to you why they’ve come up with their judgments. But when it comes to the visual aesthetic of the design, the Canada/Copenhagen researchers verify what we all probably suspect: The consumer can give a rating, but has trouble saying why.
     To improve your visual merchandising, analyze what shoppers tell you through the lenses of dimensions researchers have identified as making a difference:
  • Symmetry. Consumers like balance in design, with matching elements on the left and right and on the front and rear. But there also should be a few contrasting asymmetries with ratios which intrigue the viewer. 
  • Unifying themes. Different parts of the store layout, merchandise display, and item appearance should be seen as fitting together into a group. Customers find visual aesthetic pleasure in store designs and décor that repeat themes. 
  • Familiarity. The design should represent to the consumer a familiar story. The familiarity may come about because of a principle of design common in a culture. 
Click below for more: 
Design Stores with Visual Aesthetics 
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Use Ideas Designed by Users

Tuesday, May 28, 2013

Key In on Kiosks

Last week’s New York Times Small Business article was about a truly small retail format—the 32 square foot wheeled cart known as a Retail Merchandising Unit and the 150 square foot derivative, the kiosk. A major player, Cellairis, with its 720 mall locations of kiosks, does about $350 million in annual sales. But even small operations of the small storefront can be highly profitable. The NYT article provides the example of S.h.a.p.e.s Brow Bar, which succeeded with a single cart in one Chicago mall, and NYS Collection, which began with a single cart located between the World Trade Towers in 1996.
     Still, before that successful cart, NYS Collection co-owner Sal Babbino failed with a cart peddling embroidered hats and T-shirts. Having a cart instead of storefront, location’s less important for success. You can move to a different place. But you can’t escape the pains of carrying the wrong merchandise or offering an unwanted service.
     One shopper psychology factor in maximizing the profitability of a kiosk is to assertively convince shoppers you’re not a pop-up store which will disappear in a few weeks. Learn customers’ names and use the names. Use bounce-back coupons that give to customers a discount on a subsequent purchase. If your cart has big wagon wheels, decorate the wheels ornately enough to convince passersby you won’t be rolling off into the night.
     Or not rolling off too often. To gain exposure and maintain the advantages of novelty, you might choose to rotate the location of the kiosk within a shopping area. In that case, tell your shoppers you’ll be doing that, encourage them to look for you, and in your email/mobile marketing, announce where you’ll be setting up shop next.
     Another key with kiosks is to allow shoppers a little landing time. From your own experiences as a consumer, you’ve probably recognized the folly of kiosk operators accosting people and pulling them toward the sales area. Those people will run away physically and psychologically.
     However, some operators fail to appreciate the vulnerability a volunteer browser feels when approaching the kiosk. It’s too tiny for hiding spots. A productive salesperson at a kiosk won’t be on the phone or texting as potential customers walk by. The salesperson also won’t pounce. A welcoming smile, ten seconds of readiness to answer the shopper’s question, and then, if there has been no question, “What may I help you find?”

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Monday, May 27, 2013

Kick Out Customers Using a Welcome

The minister agrees to the young couple’s request to conduct the wedding ceremony in his church, although with one condition: “I don’t know the two of you very well, and I must emphasize that for me to marry the two of you in my church, you must abstain from sex during your engagement.”
     The couple promptly agree. Then when the couple returns a few weeks before the wedding date to discuss final plans, the minister checks, “Have the two of you been chaste, as you promised?”
     The couple both look down with shame. “No, sir,” says the prospective groom. “You see, my beautiful fiancée here dropped a box of light bulbs this morning. When she bent over to pick up the light bulbs, I looked at her, was overcome with lust, and both of us immediately lost all control. I’m sorry.”
     “I’m sorry, too.” says the minister, “However, I most certainly will not allow you to be married in my church!”
     As the young couple get up to leave, the man moans, “This has been one terrible day. Being kicked out of the church now, and then this morning, kicked out of that hardware store.”
     There are situations in which ministers, hardware store owners, or you will fire a customer. Do it with acknowledgement that the customer could repent.
     Sometimes the departure is because the customer is disgruntled. Doing what you can to keep the relationship alive is still good business. Sometimes you’re no longer able to adequately satisfy a customer who’s been frequenting your store. It’s time for a breakup. When this happens, the emotions often include shame and insecurity, according to researchers at University of Western Ontario and Queens University in Kingston, Ontario.
     The consequences, the researchers found, spring from this ashamed, insecure former customer deciding to hurt the business by spreading as much negative word-of-mouth as possible. The root of it all is the customer’s belief that the retailer has betrayed the customer’s trust in them. The loss for the retailer is from the customers’ future purchases, but potentially much more than that from others who are influenced by the negative reviews.
     Make the last memory the person has of your store one of gracious respect. After they get away long enough to relax their shame and insecurity and to correct their belief that you’ve betrayed their trust, they might return.
     And you’ll welcome them again.

Click below for more: 
Dissolve Disgruntlement Before Goodbye 

Sunday, May 26, 2013

Conserve Tradition If Serving Conservatives

If many of your shoppers identify themselves as religious and say they vote Republican, emphasize national brands over store brands in your merchandising and hesitate stocking just-released products. However, once you’ve established the habit of coming to your store among these consumers, you can stray from the merchandising formula without destroying the habit.
     This advice follows from findings at University of Michigan, New York University, and Turkey’s Özyeğin University. The researchers analyzed purchases over a six-year period in 416 U.S. counties. Survey data on voting patterns and religiosity for each county were used to calculate what the researchers identified as “conservatism.”
     The conservatives’ significant preference for national brands and aversion to newly-released products was seen across almost all of the 26 product categories evaluated. The researchers caution that all the product categories they assessed were utilitarian (diapers, peanut butter, and toothpaste, for instance) rather than hedonic (fashions, candy, wine, or bath oils, for example). But other research indicates the conservative’s attraction to tradition would carry over to hedonic items, too.
     Other studies have identified “Republican brands” and “Democrat brands.” The findings point out only tendencies, and there are broad variations within each group. But the differences are still useful to consider.
  • Republicans prefer to have decision making decentralized. They think of political leaders as reliable and practical, but as not paying enough attention to what’s best for the locals. Democrats see politicians as intelligent, empathic, and interested in individual needs, so the Democrats are more willing to grant centralized authority. On average, Republicans are more likely to go to Subway, where you make a series of discrete choices yourself, than to Wendy's, where you’re encouraged to order by prepaid package number. Democrats go down the street to Wendy’s.
  • Republicans, more than Democrats, fear for the future of free enterprise. They prefer Allstate, which has mounted fear-based ad campaigns, to Progressive, which features Flo’s smiling reassurance. Democrats prefer Progressive to Allstate. Their fears are about losing a healthy environment. For Democrats, Jeep arouses more positive associations than BMW, and Starbucks beats out Dunkin’ Donuts. Republicans see it the other way around. 
     Conservative religious consumers are as reluctant to change stores as to buy recently released items. The supporting research, centered at University of North Florida, found this to be true whether the religious folks were Protestants, Catholics, or Buddhists—the three alternatives represented in the study sample. Consumers showing lower levels of religiosity or declaring themselves to be non-religious were more likely to switch stores from one shopping trip to the next.

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

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Use or Sidestep Political Polarization 
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Saturday, May 25, 2013

Clean Up on Floors & Dollars with Scents

Burning fragranced candles or spraying a scent can influence your shopper’s behavior. The right store fragrance causes more people to buy and builds your store’s brand identity. That’s why Samsung, Victoria’s Secret, and other retailers use signature store scents.
     Smells can pace shoppers. The odor from a dirty restroom, ripe garbage, or even an excessively intense dose of a favorite fragrance will rush the shopper right along toward the exit. On the positive side, researchers at Drake University in Iowa and Washington State University report that fragrances in a store distort the customer’s sense of time. People shopping in scented surroundings find that time passes more slowly. The result is that consumers generally stay longer in the store. When research subjects shopped in a no-scent environment, time tended to drag. If not able to check themselves against a clock, these shoppers estimated the time spent shopping as being much longer than it actually was.
     Fragrances also can affect shoppers’ quite specific thoughts and behaviors. Researchers at Radboud University Nijmegen and Utrecht University, both in the Netherlands, assigned study participants to individually complete a questionnaire. The participant’s answers to the questionnaire were completely irrelevant to the purpose of the study. Filling it out served only to consume time while the participant was either exposed to a faint odor or not. The odor was produced by mixing 45 ml. of a citrus-scented household cleanser into a bucket containing 1.5 liter of lukewarm water.
     Upon completing the questionnaire, each participant was instructed to eat a rigged biscuit. This biscuit had been selected because it’s impossible to consume it without it crumbling plentifully. The experimental question: Will the people who had been exposed to the faint fragrance of the cleanser be neater than those who hadn’t? The answer to the experimental question: The cleanser-primed people cleaned up their crumbs more than three times as often, on average, while eating the biscuit.
     In another study by the same researchers, people exposed or not exposed to the faint odor of the cleanser were asked to list five activities they planned to do during the rest of the day. Here the cleanser-primed were more than three times as likely, on average, to say they were planning for a cleaning-related activity. 
     Shoppers in your store exposed to the faint fragrance of a cleanser will, on average, both buy more cleaning products and keep the shopping area neater.

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

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Deliver Fragrance to Customers Who Like It 
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Friday, May 24, 2013

Arouse the Love for Your Store

The psychophysiological evidence is in: Consumers can fall in love with your store. The researchers—from Xavier University, Texas Tech University, and Kansas State University—characterize it as “loyalty beyond reason” and demonstrated how it manifests itself in various bodily measures of the emotion of love. Other studies of the phenomenon from a while back—at Arizona State University and Texas Christian University—referred to “love-smitten consumers.”
     Brand love for your store counts for a lot. University of Michigan researchers found it even more important than the consumer’s judgment of merchandise quality for predicting the consumer’s praise of your store to others and resistance to believing criticisms of your store.
     How to arouse the love? Here’s what the research says:
  • 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. 
     The Xavier/Texas/Kansas studies found that the physiological patterns of store love differ across consumers. But other research has found commonalities in two psychological characteristics:
  • Feelings of passion about everyday activities. So coach your sales staff to listen attentively when shoppers express urges to do business with your store. 
  • Confident certainty. So project respect for 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. 
Click below for more: 
Brand Love for What Shoppers Experience 
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Thursday, May 23, 2013

Educate About Nearby Nourishment

How is the Morama bean the same as a submarine sandwich? Well, they’ve both suffered the effects of deficient consumer preparation, and thereby lies a lesson for retailers.
     It makes sense that outside the Kalahari Desert in Southern Africa, where the Morama bean grows prodigiously, few consumers have even heard of this legume, which is a good source of protein and keeps well in hot conditions. But researchers at University of Botswana were concerned that, according to results from their surveys in Kalahari Desert communities, most residents were unaware of the nutritional advantages of this easily available staple. The researchers recommend educating the citizenry.
     As to the submarine sandwich—more precisely, a sandwich on a submarine—the potential consumers weren’t people of the Kalahari Desert, but rather bacteria of the deep sea. Still, the relevance of deficient consumer preparation matches.
     In the late 1960’s, research submarine Alvin began taking on water as it was being lowered into the ocean. The three crew members quickly escaped with no more than a single sprained ankle among them. But, alas, there was insufficient time to extricate the crew’s bologna sandwiches. The lunch and Alvin itself gently sank to 5,000 feet below sea level.
     It was nearly one year before the submarine could be retrieved. Understandably, the bologna sandwiches were soggy. But they were intact. At 5,000 feet down, you wouldn’t expect fish or crabs to be around to nibble the bologna. However, what about bacteria? Cold sea water can be an excellent preservative. Yet, if you’d left bologna sandwiches in cold salt water for a year on your kitchen counter, the bacteria would have had a feast.
     Scientists’ answer to the question: At that depth, there are no bacteria. Life has its limits.
     This was in 1969. Over the decades, the original answer has been declared dead wrong. Or more accurately, wrong about dead. There are plenty of bacteria and other life forms at 5,000 feet down and beyond. The proper salty answer regarding the highly-seasoned sandwiches is that the plentiful bacteria had just never seen a bologna sandwich before.
     They hadn’t physically evolved to consume bologna. And your shoppers may not have intellectually and emotionally evolved to consume highly novel products and services. What you’re selling could be sitting there perfectly preserved for a year, and still no bites.
     Offer shoppers sampling while educating them about nearby nourishment and other benefits.

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Offer What They’ve Never Seen Before

Wednesday, May 22, 2013

Measure Your Magnitude Quotes Situationally

Is it better to describe to a shopper a health improvement program which takes twelve months or one year? A warranty that covers seven years or 84 months? A dining room table measuring four by five feet or a table as 48 by 60 inches?
     In each case, the two wordings are for identical magnitudes. Still, an accumulation of studies shows which wording you select does make a difference in the likelihood the shopper will purchase the item you’re describing. Here is what’s been found:
  • The primary rule is to choose among measurement units familiar to the shopper. Research findings from Ghent University suggest that if you start talking about warranty lengths in hours or describing dining room table dimensions in millimeters instead of inches or feet, your shoppers will consider this odd enough to think less of the retail offering overall. 
  • If a longer duration will be perceived by the shopper as indicating greater personal sacrifice, use the phrasing with a smaller numeral. Researchers at University of Southern California and Cornell University suggest describing a self-improvement program in which the shopper would be highly involved as, “This will take one year,” instead of, “This will take twelve months.” Or let’s say you need to tell the purchaser about a 21-day delay. If the customer is anxiously awaiting the arrival in order to start using the item, say, “Your product will be arriving in three weeks, not one week.” 
  • If the magnitude indicates degree of benefit, go for larger numerals. Researchers at Ghent University in Belgium and Tilburg University in the Netherlands asked consumers to compare the advantages of a seven-year and a nine-year warranty. To one group, the duration was stated as seven years compared to nine years. To another group, the identical duration was stated as 84 months compared to 108 months. Those consumers presented the months figures saw the difference between the warranties as larger than did the consumers hearing the comparison in years. 
  • When the shopper intends to make the purchase at an indefinite point in the future, pay more attention to the units than to the numerals. For consumers who want the table delivered today, 48 by 60 inches sounds larger than four by five feet. But people who are gathering information about possibilities will code feet as larger than inches, so “four by five feet” will be remembered by them as larger. 
For your profitability: Sell Well: What Really Moves Your Shoppers

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Tuesday, May 21, 2013

Nourish Good Shopper Rituals

Can you over-dry clothes? Can you over-wash dishes?
     One answer to the first question is found in the July 5, 1989 episode of “Seinfeld Chronicles,” the pilot for what became “Seinfeld.” George Costanza keeps nagging Jerry to check the clothes dryer to see if they can leave the self-serve laundry shop already. But Jerry had put in his coins, and he wants the dryer cycle to finish. “You can’t over-dry,” he proclaims.
     As to the question about dishes, researchers at University of Bonn concluded the answer is, instead, yes. They presented each of the study participants a set of dirty dishes with instructions to wash the dinnerware. Then the researchers did this a second time, and then a third time. The dishes differed in the amount of food on them. The experimenters were watching what difference this made in the hand washing techniques.
     The amount of soil made no difference. Each study participant had a habitual routine and followed that, using the same amount of water, detergent, and scrubbing effort. The dishes that started out dirtiest ended up under-washed, and the dishes starting out cleanest were, indeed, over-washed.
     Consumer habits become rigid rituals, even when those rituals waste electricity, water, detergent, or effort. Nourish the in-store habits which create purchase opportunities benefitting both the shopper and you. To maintain good will with your customers, tolerate the other habits and rituals which do little or no harm.
     Have you noticed how some shoppers will complain and complain about a product or service that seems ideally suited to the shopper's needs and desires, and then after all the complaining and what seems to be arguing with the salesperson, the shopper will go right ahead and buy the offering?
     Other shoppers come into your store asking for a specific product and brand, but before buying it, as they'll end up doing, they want to hear about at least a few alternatives, as if to convince themselves they're making the right decision.
     And then there are those customers who refuse to buy a product until they can take it out of the packaging and run their hands over it.
     Most shopping rituals are deep-seated in the personality because they were introduced early in life as the child watched others shop and was coached by parents. Some shopping rituals, have their origins before birth, being hardwired in as the brain developed in the womb.

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Monday, May 20, 2013

Indulge Splurging HENRYs

Bloomberg blog postings have been tracking the spending habits of HENRYs, defined as High Earners, Not Rich Yet, with an annual income between about $100,000 and $250,000. Bloomberg calls these shoppers, who are in the top 20% by income, the “heavy lifters” of the consumer economy. HENRYS interact with a broader range of retail brands than do other target populations. They’ll shop at premium mass brands like Ann Taylor, Banana Republic, and Williams-Sonoma as well as upscale luxury stores like Tiffany and Restoration Hardware.
     Last year, HENRYs were buying cautiously, concerned that their insulation of high income might disappear without a moment’s notice. In their state of perceived threat, their spending dropped about 8% during 2012.
     This year, HENRYs are spending again, but more often on premium brands than on the higher-priced luxury brands. To attract this demographic, have in your store the equivalents of Coach and Ralph Lauren.
     However, if you get HENRYs coming by your store, also have a few equivalents of Prada, Armani, and Gucci—the top-of-the-line, highest-prestige versions of whatever it is you sell. Do this because the current shopping patterns of HENRYs is to splurge on a few items from the top-of-the-line, then go a touch downscale for the remainder.
     To move the luxury goods, indulge the shoppers who are considering them. Spend extra time in explanations. Praise the good taste of those who show interest. Put special attention into wrapping the item after purchase. And do it all with show so that the other shoppers looking on get tempted.
     The showiness also increases the attractiveness of the less-expensive items. Stanford University researchers found that when a higher-priced alternative is added to the list of choices, the alternatives which cost less become more appealing to the shopper. Soon after retailer Williams-Sonoma added a $425 bread-making machine to their merchandise line, sales of the $275 unit doubled.
     People buy luxury items for many reasons. A top one now is functional. Consumers are willing to pay premium prices to ensure long-term value from products which are designed by craftsman, manufactured well, and customized to the purchaser’s characteristics. According to the current Bloomberg blog post, competition with your store for HENRYs’ dollars now comes from real estate—historically, a model of long-term investing.
     So maybe you’ll choose to win those dollars by gently reminding your luxury shoppers about how many house-flippers got torpedoed a few years ago.

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Sunday, May 19, 2013

Speak to Shoppers’ Language Stereotypes

Signage on the walls of your store and packages or tags on the items you’re displaying may carry text in more than one language. Stay aware, retailer, that beyond what the text says, the national identity of the languages influences shopper perceptions of the quality of your offerings.
     Researchers at Old Dominion University and Chapman University used as the sample for their studies people whose primary language was English. These consumers were asked to evaluate products with packaging that contained either English only, English plus Spanish, or English/Spanish/French. The products and the general package designs were the same; only the number of languages used on the packages differed.
     The highest quality rating went to the items in English-only packaging. Explanations for this include patriotism, ethnocentrism, and familiarity. Your shoppers are most comfortable reading signage, package text, and tag text which is completely in their primary language. Those whose primary language is Spanish would be most comfortable with Spanish-only text.
     The lowest quality ratings were for the items in packages with both English and Spanish text. But this was true on average, not for all the consumers in the study. Those participants who told the researchers they believed Spanish-speaking shoppers buy lower-quality products carried that stereotype into their product ratings calculations.
     This bias was reduced if the prejudiced participants were initially told a price for the item which was relatively high for that product category. As in other settings, the price-quality link strongly influences consumers. If an item costs more, it’s likely to be better, they think. An implication for retailers is that there are situations in which you can combat stereotypes by setting prices toward the high end.
     Items in the trilingual packaging received quality ratings between items in the other two conditions. Perhaps the stereotypes surrounding French consumers are especially positive, or maybe having the three languages implied a global endorsement of the item.
     This association of prestige with a national identity leads to an exception to the rule that shoppers will always be most comfortable with signage, package text, and tag text in their primary language. Researchers at University of Michigan and University of Minnesota explored the choice of language in advertising to consumers in India. The researchers found that the home language—Hindi, in this case—worked best when selling necessities, such as detergent. However, English worked best when selling luxury items, such as gourmet chocolates.

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Saturday, May 18, 2013

React to the Reactions to Surprise Specials

When a shopper in your store encounters an unexpected discount on an item which is usually expensive, the shopper might or might not buy the item. According to studies at Columbia University and Hong Kong University of Science and Technology, this decision frequently gives you useful guidance about what to offer the shopper next.
     Those studies and others find that shoppers who end up making the purchase tend to experience a mix of happiness and guilt. They will respond to subsequent sales appeals which talk about prolonging the happiness by doing what’s “right.” If the discounted item is considered by the shopper to be frivolous, they’re open to then buying an item which will bring pleasure, but embodies responsibility.
     On the other hand, shoppers who resist the purchase tend to experience pride, but a sense of loss. Some of these consumers would be classified by consumer psychologists as tightwads.
     Tightwads aren’t the same as frugal shoppers. Frugality is driven by a pleasure in saving. Tightwads are driven by a pain of paying. Research indicates that the key to having tightwads spend their money with you is to reinforce their sense of responsibility.
  • Congratulate tightwads on how they shop carefully. Tightwads take pride in limiting their spending, but feel more comfortable when loosening up within reason. 
  • Remind tightwads that you’ll be responsible in what you sell to them. Then keep your promise by explaining how the products and services you sell give full value. Remember that tightwads suffer emotional pain when spending. Dealing with a responsible retailer eases the pain. 
  • Accentuate the small. University of Pennsylvania and Carnegie Mellon University researchers offered tightwads the opportunity to pay extra for overnight shipping of a DVD they wanted. The extra cost was presented to some tightwads as “a $5 fee” and to the rest of the tightwads as “a small $5 fee.” The tightwads hearing the word “small” were 20% more likely to pay the fee than those not hearing that word. In contrast, there was no difference with a “$5” and “small $5” description among people who were spendthrifts—people who indicated on the earlier survey the opposite of tightwad tendencies. 
     The Columbia/Hong Kong researchers do point out that pride of a different sort can also arise within those who end up buying that expensive item with the unexpected discount. Scoring a great deal justifies a pat on one’s own back.

Click below for more: 
Effect Spillover Buys via Surprise Specials 
Pleasure the Practical Shopper 
Have Fun Items Throughout the Store 
Loosen Up Tightwads’ Wallets 
Sell Impulse Items to Serve

Friday, May 17, 2013

Shelve Old Ideas About Shelf Space Allocation

What are the best ways to allocate your store’s shelf space? The classic study addressing this question was published almost two decades ago, so you might think some of the assumptions need revision. Research over the past few years by German researchers confirm the value of that thinking. Here are findings from those studies—at European University Viadrina and Catholic University Eichstätt-Ingolstadt—and other research:
  • Across overall product categories, the biggest sales growth comes from expanding the shelf space allocated to impulse buy items. The elasticity is smallest for expansion with commodities and staples. There is substantial interchangeability among commodities and staples. As a general rule, if your particular favorite isn’t out on the shelves, you’ll settle for a close substitute. Impulse items have more individualized personalities. The more there are, the greater the urge to splurge. 
  • An increase in shelf space allocation will have a greater impact on sales than will a decrease in shelf space for a product category. This means you could progressively build sales by rotating which product categories get more space. Behind this effect is that consumers are feeling overwhelmed by the number of purchase alternatives available to them. They’re attracted to a store by an abundance of variety, but are relieved when the filtering task is easier. An increase in space allocation attracts shoppers. A decrease in space allocation for a category can relax shoppers. 
  • The nature of the shelf space makes a difference in the sales effects of allocation changes. End caps—shelves at the end of aisles or racks and facing perpendicular to those other shelves or racks—draw extra attention and stimulate extra sales. 
  • Items which convey values have higher shelf space elasticities. Increase the shelf space for organic and nonorganic items, and the increase in sales will be greater for the organic set. 
  • For many merchandising tactics, what large footprint retailers do can be a useful model for the smaller retail operation. You watch how a successful Big Box changes relative allocations of shelf space and then parallel those changes in a scaled-down version in your store. However, there is one way in which what works for the big doesn’t work the same way for the small: Large stores do well to pay attention to the different effects of changing allocations to product categories versus brands within the category. Smaller stores should not pay as much attention to this. 
For your profitability: Sell Well: What Really Moves Your Shoppers

Click below for more: 
Organize Organic Item Assortment/Promotion

Thursday, May 16, 2013

Duck Toward Attention-Getters

The front page of yesterday’s Wall Street Journal described how a certain bright yellow inflatable duck is helping retailers in Hong Kong.
     Shopping mall Harbour City arranged for the duck to occupy Victoria Harbor in order to attract store traffic. The objective is being met, with thousands of people coming by. Shops in the area are changing their merchandise mix to feed the fowl frenzy. Some restaurants are serving duck entrees. WSJ reports that another restaurant is now featuring a duck-shaped food sculpture created from taro and shrimp. Inquiries about rubber duck toys are flying high.
     In retailing, the payoff is in convincing prospects to buy. But you have to catch their attention first. Researchers at University of Southern California and University of Texas-Austin summarized what consumer behavior studies say about standing out. Here’s my adaptation of their list:
  • Live large. Did I mention that Hong Kong’s rubber duck is fifty-four feet tall? Along the same line, consumers are more likely to notice bigger ads than smaller ones and to listen more closely to the same salesperson when she’s making effusive gestures rather than restrained movements. Enthusiasm persuades, particularly when the enthusiasm is genuine. 
  • Color consumers’ worlds. Signage which employs a range of hues grabs more attention than the black-and-white. It is also true that B&W commands attention when surrounded by colorful stimuli, but this effect is weaker. Don’t overstimulate, though. That repels consumers. 
  • Be bold. Product claims made in boldface print or in a slow, deep voice achieve perceptual prominence. To turn shoppers’ heads, surprise them with daring humor or unexpected claims. Do be sure to promptly follow up with a comforting resolution, though. 
  • Personalize. People’s attention moves to what has personal significance for them. Harbour City inflated excitement about the duck’s appearance using a stream of social media messages and press releases saying the duck represented joy and playfulness at a time when Hong Kong residents are feeling gloomy from the weather, the pollution, and the economy. 
  • Cement with concrete. Concrete words like apple, engine, and hammer are easier for consumers to process than abstract words like aptitude, essence, and hatred. Because they are easier to process, these words will stand out. This is not to say you should completely avoid abstract words. Once you stop the shopper with the prominent stimuli, you’d like them to spend time contemplating what you’re saying. Abstract words help do that. 
Click below for more: 
Stand Out

Wednesday, May 15, 2013

Bring It On Home

The “Behind Every Project Is A True Value” campaign kicked off with an ad showing a guy demonstrating how he’s put the hardware store retailers’ items to use in his home. The setting for retail competitor Ace Hardware’s “Neighbors” TV ad was an Ace store inside a home.
     To shape their operations and marketing, store-based retailers have been bringing it on home for a long time. On the advice of marketing consultants using anthropological methods by visiting consumers’ homes, the manufacturer of Weber grills told retailers that shoppers seemed to put more importance on the social fun of a barbeque than on the ease of the cooking or taste of the food. More recently, Sealy Corporation sent consultants into consumers’ homes to explore the many different ways people use their mattresses.
     In the mid-1980’s as Intuit Inc. was first getting started in Palo Alto, California, company staff hung around local computer stores where Quicken was being sold. Whenever somebody would buy that flagship Intuit product, the Intuit staff member would ask the purchaser if staff could come watch what happens when the person installed the software on the home or office computer and began learning to use it. Intuit made full use of what they discovered. Quicken garnered a reputation as a user-friendly way to get boring bookkeeping out of the way.
     Asking customers if you can follow them home probably wouldn’t out well for you in all circumstances these days. The visits would take time, and depending on your product line, some of your customers might wonder what unauthorized, shady followup you're proposing. And your marketing budget might very well preclude you from hiring anthropologists to assist in crafting campaigns.
     Still, you may have opportunities to visit your customer’s home or business locations to install, service, or repair products they’ve purchased from you. In these cases, observe all you can about how they’re using the products.
  • What are the uses you didn’t expect and can now leverage as selling points to others? 
  • In what ways, if any, are purchasers misusing the products or not using them to full advantage? What do you say that could be delivered by store staff as instructions when a customer purchases the item? 
  • What frustrations are the people experiencing that could be eased through in-store training or client-site fee-based consultation? 
  • Which pleasant experiences in the intimacy of your customers’ homes can you capture in stories to tell to shoppers and to use in ads with home backdrops? 
For your profitability: Sell Well: What Really Moves Your Shoppers

Click below for more: 
Follow Your Customers Home

Tuesday, May 14, 2013

Nurture Healthy Retailing Using Human Nature

In last month’s Harvard Business Review, Nava Ashraf described her experiences convincing economically disadvantaged residents of Latin America, Southeast Asia, and Africa to engage in good public health practices. Prof. Ashraf noted how even when the tools for those practices are available at little or no monetary cost, people too often don’t use them. Her insights as to why and how to overcome the problem center around the importance of attending to human nature. Those insights apply to encouraging healthy item acquisitions at retail by the economically disadvantaged in North America, Europe, and elsewhere, too.
     Here’s my adaptation of the list of hints, informed by other consumer behavior research findings:
  • Get customer commitment for the longer-term. Consumers who are chronically short on funds become accustomed to thinking about what’s coming tomorrow and avoiding thoughts of what’s happening further along in time. Retailers can encourage healthy purchases by offering incentives for longer-term agreements. “Sign up now for the six-month program, and when you pick up and pay for your purchase of fruits and vegetables each week, you’ll be getting a 15% discount off the regular price.” 
  • Offer surprise gifts which give immediate pleasure. The benefits from switching to healthy foods may not be seen for months. The illnesses in children who play with toxic toys acquired in the underground economy at low cost won’t show up for years. Whenever the retailer accompanies the purchase of a good item with a small shot of instant fun, the human nature of bias for the present has been accommodated. This shot of fun doesn’t need to be merchandise. The economically disadvantaged lack the extra for amusement. The parents frequently feel they’re letting down their children. Entertain the kids of purchasers of health items, and you’ll get repeat business. 
  • Model healthy habits. When the store staff show high interest in healthy items, the result is the right type of contagion—fitness, not disease. Prof. Ashraf’s literature research indicates that a powerful motivator for retail staff to do this is to remind them how it’s socially responsible. Practitioners in a North Carolina hospital were more likely to wash their hands conscientiously when reminded how it helped the patients than when reminded how it helped the practitioners themselves. In selling to the economically disadvantaged, recruit staff and shape your own thinking by promoting the opportunities to serve the community. Also, reward staff who sell healthy items.
Click below for more: 
Convince Kids that Healthy Has Authority 
Quench a Thirst for Health in Food Deserts

Monday, May 13, 2013

Trace Who Does What in the Purchase

“Men consistently spend $600 to $700 more a month than women.”
     That’s according to the just-released Intuit Consumer Spending Index based on data from over two million users of Intuit’s Mint.com personal finance software.
     What accounts for the $600-$700 difference, and what are the implications for you as a retailer? One possible explanation is the blooming of househusbands. An analysis conducted a few years ago by University of New Hampshire concluded that during the U.S. economic downturn, husbands lost jobs more often than did wives, and husbands encountered more difficulty than wives in finding employment.
     As a result, a higher percentage of wives than in the past found it necessary, in order to pay the bills, to enter the labor force or to expand their work hours. They’d prefer to be home instead with family, but that’s not feasible. A logical consequence is that more household responsibilities, including shopping, are being handled by the husbands.
     The implication for retailers is to accommodate the style of male shoppers. There are broad individual differences among male shoppers and among female shoppers, but a solid body of research finds that, overall, men tend to think about shopping and conduct themselves as shoppers differently than do women. Male shoppers are more purpose-driven. Women are more possibilities-driven.
     However, there’s another explanation for the Intuit findings which also deserves attention: Because of cultural norms, when a man and one or two women are in a restaurant or store together, it’s more often the man who pulls out the credit card to pay. And it is largely credit card purchases which are tabulated in Mint.com. Cash purchases and bank account withdrawals are not automatically tracked.
     Two related implications here for retailers: First, consider that the $600-$700 figure could be an exaggeration. The person who makes the payment might not be the person who made the purchase decision. The differential in the Intuit index was 29% for eating out and 27% for entertainment, both areas in which the man is more likely than the woman to make the payment. The differential was only 6% for “overall shopping,” and the differential was 21% in the opposite direction for the category of clothing and apparel.
     The related implication is to trace who does what in the purchase.
  • Initiators identify the need 
  • Gatekeepers gather information and route it to the other participants in the purchase decision 
  • Buyers authorize the purchase 
Click below for more: 
Recalibrate for Shopper Gender Trends 
Learn the Relationship B2B Customers Want

Sunday, May 12, 2013

Boost Consumer-Generated Ads’ Persuasiveness

Your store can build shopper excitement and customer loyalty by inviting those shoppers and customers to suggest ideas for you to use in advertising. Consumers get excited by contests, and winners of store contests build allegiance to the store.
     You might very well decide to employ the services of an advertising expert to turn the consumer’s golden idea into pay dirt copy. Also acknowledge that business professionals give legal cautions about consumer-generated ads (CGAs). Some of these cautions are about non-disclosure agreements and rights to subsequent use of the designs. Still, the upside is that, with CGAs, every nugget is coming from people who know what sold them or would sell them on buying from you.
     Should you let all those in your target audience know the ad ideas were developed by other consumers? Researchers at Georgetown University say you’re sometimes wise not to. Such revelations arouse a mix of two conflicting attitudes in your prospective shoppers—skepticism and identification. People are skeptical that a store depending on others to create ad copy is sufficiently reliable as a retailer. And the same people are attracted by the arguments in an ad designed by someone they view as being more similar to them than is the retailer.
     The Georgetown research findings suggest two steps to tilt the balance away from skepticism and toward identification, and thereby boost the persuasiveness of your CGAs:
  • Reserve their use to ads for products and services where the methods or benefits of use are hard for your typical shopper to understand or appreciate. For instance, this could be because the item is novel or because your typical shoppers don’t give close attention to ads for this type of item. 
  • Describe the ad creator with background information which highlights the creator’s similarities to at least one of the major segments of already loyal customers in your target markets. Keep the background information brief, though. Remember that you’re aiming for an audience who are finding it hard to understand or appreciate what you’re saying. 
     Once you’ve done this, other research findings indicate that you’ll do best to spread the news of creators widely. Conduct the project as a contest. If your acceptance of ideas is ongoing, declare winners regularly. Research finds that after a CGA competition, even the multitudes who didn't win are likely to build a kinship with the business, feeling they’re part of a community.

Click below for more: 
Game On with Consumer Competition 
Incorporate Crowdsourcing When Designing 
Use Ideas Designed by Users

Saturday, May 11, 2013

Know At Lease A Lot About Lease-to-Own

Sears Holdings Corp is rolling out a lease-to-own program to all Sears stores, available on items which cost at least $280. Customers don’t need to pass a credit check, but must be at least 18 years old and earn at least $12,000 a year.
     Lease-to-own (LTO) might be a way you can increase sales to shoppers who can’t afford to purchase large items outright, but can’t wait to pay off the item on layaway. A refrigerator, for instance. Like Sears, you’d almost surely want to contract with an experienced company to handle the mechanics of the leasing; compliance with the array of laws and regulations governing LTO transactions; the collection of payments from the customer; and, if necessary, repossession. Sears is using WhyNotLeaseIt, based in Manchester, New Hampshire.
     For you to profit best from a lease-to-own program, you’ll also want to know the psychology of the LTO consumer. A study at Columbia University provides guidance, although the data were limited to 5,226 LTO agreements across five product categories (appliances, computers, electronics, furniture, and TVs) from fifteen stores near Columbus, Ohio.
  • Lessees are much more likely to exercise an early purchase option than to lease to term. Rates for early purchase averaged 30%, and for rent-to-term, 11%. 
  • The consumer can return the item and stop payments before the lease period ends. Each month, about 5% of items out on LTO will be returned. Understandably, then, LTO items are generally leased out more than once. Your shoppers must be willing to accept used merchandise, and you must develop your skills in retailing used items. Two of the most powerful determinants of the profitability of an LTO operation are the number of times the item is leased and the percentage of time it’s out on lease. 
  • Theft is a downside. About 20% of TVs obtained with a LTO end up being stolen. The rates are not much lower for computers and electronics. The lowest rate in the Columbia study, at 6%, was for appliances. There is not a greater likelihood of theft earlier in the contract than later. Therefore, it doesn’t seem that consumers are choosing LTO with the intent of stealing the item. It’s more likely they steal because they’ve run out of money, but consider the item essential. Another implication of all this is that you’ll have collected at least some money due you before the item fades from view. 
Click below for more: 
Think Through Layaway Implications 
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Run a Store, Not a Public Library 
Resell Consumers on Buying Used Items

Friday, May 10, 2013

Supersize Purchase Momentum

The 2004 documentary “Super Size Me,” in which filmmaker Morgan Spurlock ate only McDonald’s restaurant food for thirty days, portrays the supersize influence in consumer behavior as causing obesity, mood swings, and even sexual dysfunction.
     With good reason.
     Still, researchers at Texas A&M University and Pennsylvania State University find that increasing the size of a food purchase can also improve health. It depends on what you’re supersizing. The researchers say that if you add cues for good health at the point of sale, the appeal of lower unit cost tempts shoppers to get more of the beneficial alternative.
     In fact, consumers who have purchased a larger quantity of an unhealthy item become more likely to subsequently purchase a larger quantity of a healthy item. This has to do with guilt, consumers’ desire for balance, and also purchase momentum.
     Consumer psychologists talk of a “flow state” in which a customer who makes a purchase becomes more likely to make another purchase and then another. The flow state includes decisiveness in buying decisions, a playful willingness to expand the range of products considered, a hesitation to discontinue the process of shopping, and a distorted sense of time.
     An application of this for your store is in how you frame quantity-dependent price discounts. Two possibilities are:
  • 20% off if you buy at least five packages. 
  • 20% off. Limit five packages per customer. 
     What’s the effect of those on the number of items purchased? Research at Bryant University and University of Illinois finds that…
  • When customers are required to buy a minimum quantity to achieve the discount, they are more motivated to purchase multiple items. 
  • When customers are allowed to purchase only a limited number of items at the discounted price, they are less motivated to purchase multiple items. 
     Consumers live up or down to the conditions of a discount offer.
     Then the Bryant/Illinois researchers went beyond this to indicate that the nature of the motivation will spread to other purchase decisions during the remainder of that same shopping trip. People who buy five of the items so they can earn the discount will be more likely to buy in quantity other items on their shopping list—whether or not those items are discounted. Customers who stopped at buying five items because they don’t get a discount beyond that quantity become less likely to supersize purchases of other items on the shopping list.

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Increase Purchase Quantities with Discounts 
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Flow Shoppers into Extra Purchases 
Offer Bonus Packs of Virtue, Discounts on Vice

Thursday, May 9, 2013

Mug for Shoppers Who Buy Distinction

“Thank you for coming to my store and making this purchase. Before you leave, one more thing: I might be able to offer you an unusually good deal on the insulated travel mug pictured here. They usually sell for $15 each. I was able to get a very limited quantity of them to sell for $5. If you might be interested, I’ll ask you to take one of the slips of paper from this bowl and open the paper. If it has a star on it, I’ll give you a certificate you can use to buy one mug for $5 when the mugs arrive a week from today.”
     That’s roughly the offer made by Santa Clara University researchers to two groups of consumers. What distinguished the two groups was the number of paper slips in the bowl. It was either six slips or two.
     What the consumers were not told is that every single piece of paper had a star on it. Everybody came out a winner.
     Did the number of slips make a difference in purchase behavior?
     There was no statistically significant difference in the percentage of consumers in each group who said they’d be interested in drawing out a slip of paper. But there was a big difference in how many came back to actually make the purchase. Of those who thought they’d picked a winning slip from two, about 4% returned to claim the discount. For those in the six-slip condition, about 27% returned, ready to buy.
     The researchers attribute the difference to degree of distinctiveness. Feeling exclusive, lucky, and grateful impels buying.
     When you tell a customer they’re receiving a price discount, they’ll build good will toward your store. If you add that the discount isn’t available to every other customer, the good will might be even greater. But do be aware that your announcement could make the customer uncomfortable. Be consistent and be ready to explain the reason for the discount. Otherwise, the customer can get angry, thinking that your store pricing is highly arbitrary or even discriminatory. For American consumers, make the reason demographic (“A 10% discount to senior citizens”) or marketing-determined (“A 10% discount to first-time purchasers”).
     Researchers at University of Louisville and Iowa State University found that exclusive discounts are most effective when the shopper concludes they were not pressured into making the purchase, but rather view themselves as acting independently.

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Offer Exclusive Price Discounts Cautiously 
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Wednesday, May 8, 2013

Fake It, But After You Make It

I found it painful to read that article in the New York Times Magazine. Yet I also found it necessary. The article, titled “The Mind of a Con Man,” describes how psychology professor Diederik Stapel fabricated the data in studies about priming conducted at University of Groningen and Tilburg University. The pain for me comes because much advice I’ve given to retailers is based on priming notions and because I’ve been trusting consumer psychology research conducted at those two universities.
     One manifestation of priming is “fake it until you make it.” If a retail salesperson pretends to be confident about the value of an item for a shopper, the pretending ends up developing genuine confidence in both the salesperson and the shopper. The confidence might be misplaced, however, resulting in fraud. The now-fired Prof. Stapel suffered from this by having pretended, with great confidence, that his data were genuine.
     “Fake it until you make it” can be helpful in retailing. A good body of research does indicate that if you put on a happy face when business conditions are discouraging, you become more likely to prevail. Optimism, as long as it is not wildly unjustified, wins.
     Still, in selling products and services, as most retailers do, or in selling ideas, as Dr. Stapel did, I prefer “fake it, but after you make it.” That is, it’s fine to put on an enthusiastic demeanor after you’ve confirmed that your enthusiasm about your store and your products is justified.
     As to the consumer behavior research findings themselves, before applying them, be sufficiently skeptical. When a consultant happens to give you advice rooted in research conclusions which don’t make sense to you, start out by asking yourself if you might have misunderstood what the consultant said or you might have been blind to factors the consultant discovered. If you decide you did understand correctly and you weren’t blind, then consider that what the consultant or researcher is telling you could be nonsense.
     Faking it at any point is tempting, to be sure, because of the likely short-term payoffs. In the New York Times Magazine article, Dr. Stapel gives the example of children like his ten-year-old daughter who, at Christmas time, realize the legendary St. Nick isn’t really going to be squeezing down the family’s fireplace chimney. “But,” added Dr. Stapel, “they like to believe it anyway because it assures them of presents.”

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Tuesday, May 7, 2013

Resist Contaminating with Residue Sensitivity

Retailers of second-hand merchandise often find a sales appeal arises from tales about the previous owner. However, researchers at University of Texas-San Antonio find that for one category of shoppers, you’ll do best to downplay the specifics in those tales. This category shows a personality trait the researchers call “residue sensitivity.” These shoppers overlook the interesting backstory and instead perseverate about the possibility that a negative essence might be lingering on the object. Not germs, necessarily. An ethereal essence.
     You can’t see the essence, retailer, but stay alert for the shopper’s concern.
     Actually, although the impact of essence is acute with consumers showing high residue sensitivity, it occurs with most all shoppers, and often in a positive way.
     Why would somebody pay £78,000—about $122,000 in the U.S.—for a dress designed by a woman who had worked in an aquarium? The answer is that the dress was worn by Kate Middleton, wife of Prince William.
     In year 2004, an eBay buyer dropped more than $15,000 for a gob of gum chewed by Britney Spears. Somebody paid $48,875 for Jackie Kennedy’s tape measure, and convicted swindler Bernie Madoff’s blue Mets jacket, looking very much the same as many other blue Mets jackets, sold for $14,500.
     Researchers at Yale University and Israel’s Bar-Ilan University explored the shopper psychology behind the phenomenon. They asked study participants how much they’d like to own specified common artifacts like clothing and furniture which had previously been used by celebrities or non-celebrities. Some of the celebrity names were well-regarded. George Clooney, for instance. Others had a negative reputation. Saddam Hussein, for example.
     As expected, participants assigned higher value to celebrity-associated items. When the association was with a well-regarded name, the consumers’ explanation was prestige by physical association. The consumers felt they could actually absorb some of the remnants of the original owner. The study participants said that if the item had been thoroughly cleaned, it was nowhere near as valuable to them. On the other hand, if purchase of the item was with a condition it could not be resold, this didn’t decrease the attractiveness much at all.
     With the negatively regarded celebrities, like Madoff and Hussein, the effect was reversed. Sterilization of the item before purchase was all to the good. But prohibitions on resale dramatically decreased the valuation by the consumers in the study. Here the purchase was being made as an investment.

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Monday, May 6, 2013

Caution Shoppers for OTC Safety

When consumers might not be thinking about cautions in product use, pay extra attention to warnings. This common-sense, but easily overlooked, advice is supported by research at Washington and Lee University, Texas Christian University, and University of Tennessee-Chattanooga.
     The researchers compared how seriously shoppers take dosage instructions for prescription and over-the-counter (OTC) medications. With both types, excessive use is dangerous. Even when warnings on the packages were equally prominent, people paid less attention to those on OTC medications with which they were unfamiliar than on the labels of prescription meds unfamiliar to them. Notably, the consumers in the study seemed to be aware, as a general point, that overdosing on either type of product is harmful. It was that they were less likely to think about reading the cautions with the OTC meds.
     My general advice to retailers is not to give warnings to shoppers unless asked. Inform without intruding. However, I make an exception when it comes to safety.
     Some years ago, after an usually windy storm blew by my home, left behind was a huge tree limb blocking half the street. Since the limb was obstructing the view of an area where neighborhood children often cross the road, I decided to cut up the limb myself and pull the pieces out of the way.
     I figured that the bigger the chain saw, the quicker I'd get the job done. With that in mind, I asked the guy at the equipment rental shop for the biggest chain saw around. The guy asked me no questions in return, except for which credit card I wanted to use. What I dragged back to my car was a chain saw really much too powerful and cumbersome for me to use, given my limited experience both with chain saws and with playing defensive end on an NFL team.
     The danger became clear as soon as I started up the chain saw. I needed to stop the saw, drain it out, pack it up in my car, and drive back to make an exchange. As I say, I needed to do all that. But I didn't.
     Instead, I managed to hack up the tree limb while leaving my own limbs intact. How fortunate, since a customer without fingers has trouble pulling out credit cards. I wonder if the operator of the equipment rental shop knows about the customer disservice created over the counter.

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Disclose Product Cautions 
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Sunday, May 5, 2013

Welcome the Family of Hispanic Shoppers

The current issue of “The Checkout” from The Integer Group and M/A/R/C Research characterizes the shopping behavior of Hispanic consumers in the U.S. Adding in results from earlier research on this growing market, here are my suggestions to you for retailing profitability:
  • Distinguish between those shoppers who are well-integrated into American culture and those who are not. The percentage who are highly acculturated differs by the region of the country. But in general, Hispanic-Americans are more likely than Asian-Americans, for example, to live in primarily Hispanic-American communities. With your shoppers who are well-integrated, your adjustments should be a change in accent rather than dramatic alterations in what’s been working for you up to now. 
  • Accommodate the influence of extended family. Not only parents, but also grandparents, cousins, and friends who feel to the shopper like family. About 55% of Hispanic consumers say they love shopping with others, compared to 38% for U.S. consumers overall. Hispanic men are notably more likely than others, including Hispanic women, to be influenced by family recommendations for stores and products. Design your retail business around family in ways ranging from store merchandising and layout to in-store entertainment. Regularly remind your customers how grateful you’d be for them recommending you to family members. 
  • Less well-acculturated Hispanic shoppers are more likely than others to enjoy wandering through store aisles, feeling or trying out products, looking for recently introduced items and surprise specials. Plan for this in your store merchandising. As for ecommerce, Hispanic shoppers like interactive displays which, for instance, let them rotate the image of a product to simulate holding it. In the U.S., about 35% of Hispanics are under age 18, compared to a 20% rate for non-Hispanics. Emphasize the exploration associated with youth. 
  • Hispanic shoppers like low prices, but they are more attracted by popular brands. This can be a private-label brand. Although Hispanic shoppers are more likely than non-Hispanics to start by considering the national brand alternative, almost 70% of them go on to compare with the private label alternative when it’s on the shelf. The easily recognized brand assures the Hispanic shoppers of quality when they’re insecure about their choices. It also serves as a mark of status for public display items, such as school and church clothes for their children. About 53% of Hispanics say finding high quality items is a most important selection criterion. Among consumers overall, it’s 40%. 
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Accent Values of Your Hispanic Target Markets 
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Speak Languages of Mexican-American Consumers 
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Saturday, May 4, 2013

Arouse Brand Sensitivity with Vanity Appeals

Selling private label goods—house or store brands—will often give you advantages over selling nationally advertised brands. Retail profit margins are usually higher even when you’re offering a better price to the customer. Still, there are circumstances in which both you and the consumer benefit from a sale of the nationally advertised alternative.
     Research findings from Southern Illinois University suggest your chances are best when the shopper is vain.
     What are signs you can spot of vanity? The shopper…
  • …expresses high interest in how good a product will make them look. 
  • …indicates they think they are highly attractive to others. 
  • …brags about their achievements 
     Because each of us yearns for self-esteem, even the smallest things can give you a retailer’s edge. Every time you personalize the selling message by referring to a characteristic of the shopper, you’re delivering a compliment. And researchers at Universiteit Leuven in Belgium find that across languages and cultures, people’s self-esteem is heightened at least a bit not only when their name is used, but also when they are shown or given products with brand names starting with the first letter in their own names.
     In a study at Hong Kong University of Science and Technology, prospective clothing shoppers were given a flyer advertising a department store. The flyer read, “We’re contacting you because you’re fashionable and stylish,” and then asked the shopper to come visit the store.
     It would seem that such obviously insincere flattery would amuse or irritate the shopper. But the flattered shoppers who were asked for snap judgments rated the store more highly.
     In a second experiment, participants were offered a discount coupon from the store that gave the flattery or from a store whose flyer offered no flattery. If asked three days later, 80% chose the coupon from the phony flattery store.
     In the third experiment, flattered participants were told that the store charged especially high prices and had a restricted range of clothing. Even when confronted with these negatives, participants held onto their positive views. The exception was if the consumers were first made to feel good about themselves by writing about a positive trait.
     With customers hungry for self-esteem, phony flattery can influence brand and store awareness. This works best if the customer is distracted from thinking about the flattery having been phony, such as by being rushed or making a selection after some time has passed.

Click below for more: 
Allow Prestige for Store Brands 
Praise Your Customers 
Flatter Shoppers with Care and Caring