Monday, September 30, 2013

Cash In on King Cash

Jack Kleinhenz, Chief Economist with the National Retail Federation, recently posted a paean to cash payment. Dr. Kleinhenz reports that Americans use cash at retail almost half the time, most often for transactions of less than $10. But even with larger purchases, continue to be ready to make change rather than changes in how you accept payment.
     Last year, Walmart.com launched their “Pay with Cash” program. “Pay with Cash” is designed for customers who lack a checking account and credit card, but want to take advantage of the broad item selection and ease of shopping online. The customer places an order via Walmart.com and pays with cash at a Walmart store within 48 hours, at which point the order is shipped. The seed of “Pay with Cash” was Walmart’s epiphany that only 15% of transactions at the stores use some form of credit. The Walmart shoppers are needing to, or at least preferring to, pay with cash.
     And there’s PayNearMe, which last January revealed they’d received $10 million in venture capital funding they’d use to expand the cash payment platforms available for retailers to implement. The company estimates the percentage of American households not having a bank account running as high as 24%. A target market for PayNearMe is teenagers too young to have their own credit.
     When your customer pays for a large purchase in cash, be sensitive to the possible reasons:
  • A desire for privacy. This sort of shopper might react negatively to your requests for further information, such as how they learned about your store or how they plan to use the merchandise. 
  • A limited credit history. These customers might be of any age, but there’s a skew toward the young ones. Consider these individuals a source of future business, so in your dealings, help them become discerning, appreciative consumers. 
  • Exceeding the credit limit. Some of these people might be compulsive shoppers who will ultimately appreciate you not pushing them to buy when you see them looking highly uncomfortable. 
  • Fear about the economy. The appearance of discomfort might also reflect doubts about banks and investments. Dr. Kleinhenz’s analysis is that one reason the volume of U.S. currency in circulation has more than doubled since December 2007 is that in times of financial turmoil, people start storing their wealth in cash. These customers will be most likely to buy from you value-priced items and relatively inexpensive luxuries. 
Click below for more: 
Credit the Appeal of Cash 
Build Trust Before Asking for Information 
Educate Children as Consumers 
Compulsive Buying Disorder. Okay, Laugh 
Expand Marketing to Credit Risk Consumers

Sunday, September 29, 2013

Limit Mouth-Watering Evaluations

Looking at photos of a food we love increases our appetite for it. But looking for too long kills our appetite for that food.
     Researchers at Brigham Young University and University of Minnesota asked study participants to rate or express their relative preferences for foods shown to them in pictures. After repeating the task many times, the participants lost interest in actually eating the food. This happens less often if the participants evaluate a range of foods rather than similar choices.
     Consumer psychologists call on two verified phenomena to explain:
  • Ideomotor effect. In 1890, William James, one of the first true experimental psychologists, wrote, “We may lay it down for certain that every representation of a movement awakens in some degree the actual movement which is its object.” Getting consumers to nod yes makes them more likely to feel they’ve agreed with a request a retailer is making. Having people look at photos of a food they relish makes them experience the sensations of actually eating that food. 
  • Sensory-specific satiety. If we experience a small taste of something good, we’ll want more. But if we experience lots of it, we become sated, and so don’t desire more of that particular food. Because of ideomotor action, the satiation can occur from looking at pictures of the food. 
     We’d like to present our shoppers with mouth-watering experiences of all sorts. Northwestern University researchers showed a group of men photographs of physically attractive women and asked these men to decide which one they’d prefer to take out on a date. A matching group of men were asked to think about getting a haircut. The first group developed more of a mating goal than did the second group.
     Next, all the men were presented images of high-end sports cars while hosting in their mouths the type of cotton rolls you encounter in the dental chair. The objective was to quantify the salivation.
     Sure enough, the men shown the photos salivated more when viewing the sports car images than did those in the haircut group. They were more likely to swallow the notion of purchasing the car.
     Thinking about desired foods could fill a cotton roll to overflowing. A mouth-watering sports car is operating on the brain in the same sort of way as the mouth-watering food. That does build purchase intentions. Maintain those intentions by limiting the evaluations in order to avoid satiation.

Click below for more: 
Imagine What Will Work 
Start Your Shoppers Feeling Yes 
Hesitate Giving Away the Store 
Take Wing with a Shopper’s Swallow 
Ask Shoppers Why They Like or Dislike Items 
Help Shoppers Use Their Imagination

Saturday, September 28, 2013

Choose an Item’s Country of Origin

Researchers at Texas State University-San Marcos, University of Wisconsin-Madison, and University of Delaware noticed how the declared country-of-origin (COO) on clothing usually is the locale of manufacture, not the locale where the fibers were produced. Since much research has shown COO statements affect consumers’ purchase decisions, the researchers wanted to explore the benefits for a retailer in choosing which COO to declare.
     The study samples consisted of consumers in three U.S. southern states. Participants were asked to decide how much more, if anything, they’d be willing to pay for a woolen sweater depending on the COO. The choices for locales of manufacture were America and China. The choices for fiber origin were Australia, America, and the particular state in which that day’s study was conducted.
     The researchers found that the consumers were willing to pay the most when the fibers were from their home state, and willing to pay more when the wool in the sweater had been grown in America rather than Australia. The COO for the manufacture of the sweater made less difference overall.
     In applying these findings to your use of COO information, recognize that:
  • What’s true for wool sweaters may not be true for other products. Shoppers associate certain countries of origin with desirable product characteristics. Cheeses and perfumes from France have a special cachet, as do cutlery and timepieces from Switzerland. 
  • The South has historically been associated with growing fibers and producing apparel. What the researchers observed probably included regional loyalty. The researchers had administered to the participants a standardized inventory of ethnocentrism—the degree to which you believe your own culture is superior to others. Those with the highest ethnocentrism were those willing to pay the highest price premium for closer-to-home fiber origin. 
  • COO information also can trigger local loyalties because of a “Keep Americans Working” ethos. 
  • COO preferences change. Researchers at Canada’s Carleton University and York University tracked what happened with Australian consumers due to the French government conducting nuclear testing in the Pacific during the mid-1990’s. French products were evaluated more negatively. Over the next ten years, as the memories receded, Australians’ attitudes toward French products moved upwards. 
     The import of the Texas/Wisconsin/Deleware research about imports is that you can obtain different results by choosing which COO to feature. Among the alternatives might be where:
  • The raw materials were produced 
  • The components were assembled 
  • The final product was approved and shipped 
Click below for more: 
Feature Country-of-Origin Advantages 
Salute Sales to Concerned Patriots

Friday, September 27, 2013

Seek the Succinct in Recommendations

“Wise men talk because they have something to say; fools, because they have to say something.”
     The spirit of that epigram, attributed to Plato, shines through in the evidence from a set of four studies about what happens when consumers give purchase recommendations to each other. Researchers at University of Michigan and Wilfrid Laurier University found that people who are insecure about their consumer knowledge will talk more when giving recommendations than will highly confident experts.
     The negative relationship between confidence and verbosity was strongest if the person giving the advice felt close to the target of the advice. The urges to be a valuable helpmate as well as to enhance one’s own importance kept the dilettante from shutting up early when that would have best served everyone.
     One lesson from this for retailers is to seek the succinct in recommendations. This applies to reviews you request from others, such as about your vendors, and to reviews you ask your customers to generate for use by your target markets.
     On a related note, another set of studies found that when people who truly are experts are prodded for increasing amounts of detail, they start giving flawed advice. Researchers at University of Illinois-Urbana/Champaign, New York University, and University of British Columbia found that product and service experts don’t stay sufficiently familiar with details of their logic. They’re accustomed to giving advice from habit rather than tracing out the details each time. If pinned down by requests for those details, experts often make up reasons for their conclusions.
     What’s worse is that the experts tend to consider the reasons as genuine. They’ll create false memories on the spot and then accept those memories as real. They don’t know they’re lying.
     People who have been identified as experts are proud of the designation and feel accountable for advice they give. When they can’t recall details in their reasoning, they assume it must have slipped from mind. They dig deeper to fill in the gaps, not realizing the deep digging leads their brains to subconsciously create phony recollections.
     Therefore, another lesson for retailers applies to the situations of you personally giving, rather than receiving, advice. For this point, the operative epigram, which has been variously attributed to Mark Twain, Abraham Lincoln, and even a Mrs. Goose, reads, “Better to remain silent and be thought a fool than to speak and remove all doubt.”

Click below for more: 
Articulate the Reasoning Experts Use 
Sell More by Being Less Certain

Thursday, September 26, 2013

Raise Your Right Hand Awareness

Right-handed people—constituting the large majority of most stores’ customers—are more likely to buy items which are displayed in a way the items can be easily picked up with the right hand. This is true when you encourage shoppers to pick up the items. It’s also true when you’re only showing the item to the prospective purchaser, such as pictured in an ad or demonstrated in front of the person.
     Researchers from Brigham Young University and University of Michigan prepared for their study by creating ads which oriented to the right or the left parts of the illustration most directly related to usage. This included handles on mugs and the placement of forks and spoons. When the orientation was to the right for a product people otherwise liked, the motivation to possess the product became even greater.
     Notice that this means the more effective ad shows a mirror image of the setup for a right-handed person to use the product. The consumer is looking at the ad, so what would be closest to the consumer’s right hand will have been to the left of a person whose image faces us in the ad. Because most people are right-handed, a natural tendency would be to orient photo setups the other way around. The research findings indicate this detracts from the motivational power of the ad.
     For an appreciation of how this applies to in-store demonstrations of a product, think how confusing it can be when the dance teacher faces you while teaching a new move. The instructor might turn her back to you for the demonstration so that when she lifts her right arm, you know to lift your right arm, not your left arm. If facing you, the instructor does best to lift her left arm while giving you verbal instructions to lift your right arm.
     When your salesperson or yourself faces the shopper while demonstrating usage of a product with the intent of having the shopper imagine usage, left becomes right while right becomes left.
     Research findings from Katholieke Universiteit Leuven and BI Norwegian Business School indicate all this does depend on the shoppers imagining themselves using the item. These researchers included a condition in which they interfered with participants’ ability to think about situational constraints with usage. In these cases, the orientation of the item to the right or to the left made much less difference.

Click below for more: 
Hand Shoppers An Aid to Imagining Usage 
Reach Out for What Will Touch Your Shoppers

Wednesday, September 25, 2013

Choke Off Phony Store Reviews

In the early days of American retailing, unscrupulous stores hired professional rumormongers to propagate poison about competitors. Laws and codes of business ethics curbed that behavior. We now have an enhanced version, though.
     Yesterday’s San Francisco Chronicle reports that:
  • The California Attorney General’s office is considering actions to combat fake online reviews of retailers. 
  • The New York Attorney General’s office wrung $350,000 in fines from a total of nineteen companies which were offering phony reviews for hire. 
  • The U.S. Federal Trade Commission has ordered that if someone is compensated for posting a review of a business, the arrangement must be disclosed. 
     Through direct contacts with legislators and your retailer association activities, lobby to choke off phony store reviews. The negatives as well as the positives. Of your competitors as well as of you.
     Regularly peruse rating boards to see what’s being said. Professors at University of Southern California, Dartmouth College, and Yale University used a database of 2,931 ratings of U.S. hotels to develop signals of chicanery:
  • Compared to faked reviews of hotels, the genuine ones use more concrete words, such as “bathroom” and “check-in,” and fewer context-setting phrases, like, “it was our vacation,” and “my husband asked why.” 
  • The review sites that require people to register as customers are more likely to have accurate reviews. A related point is that, according to Stanford University researchers, a review is more effective when the reviewer identifies herself, qualifies herself as an expert and then presents the conclusions with a bit of uncertainty. One way for a reviewer to qualify herself as an expert is to give specific points of comparison of the product with alternatives which would fulfill an equivalent function. 
  • With hotels, check the details against your records, such as to see if a party of the size mentioned in the review did stay with you. Other types of retailers will have different types of details to check. If the reviewer is identified, make contact to get details. If there’s no identification, and if the review site allows you to do so, leave a posting asking for details. 
     However, writing rebuttals isn’t enough. When using sites like TripAdvisor, Yelp, Citysearch, Google, and Yahoo, which all aim for high numbers of ratings, consumers don’t read through them all. Instead, they attribute great importance to the average star rating. The phony ding, but not your rebuttal, will be reflected in that.

Click below for more: 
Take Consumer Feedback for What It’s Worth

Tuesday, September 24, 2013

Counterbalance Embarrassing Purchases

“Sales in your store of that book The Complete Idiot’s Guide to Improving Your IQ have been really slow. How can we get more copies out the door?”
     Northwestern University researchers asked study participants how embarrassed they’d feel buying a book with that title. A parallel group of participants were asked how embarrassed they’d feel buying the book along with a purchase of the scholarly Scientific American magazine and the mind-challenging Rubik’s Cube. As we might expect, the add-ons significantly reduced the embarrassment.
     In their study, the researchers wanted to develop advice for retailers who merchandise items like anti-gas tablets and foot deodorant, which shoppers might find embarrassing to purchase. My adaptation of the advice they gave: Merchandise adjacent to the potentially embarrassing items other items which give the opportunity for an opposite impression. Next to the anti-gas tablets, you could feature bottles of fine spices, and next to the foot deodorant, merchandise a pedometer which measures running distance.
     I’ll add to that advice: Be aware how the reputation of the wine and the pedometer might be affected, though.
     In what area of your store do you shelve the shampoo to kill lice? You don’t carry shampoo to kill lice? Well, for a moment, pretend you do to help me make a point that’s useful regardless of what product lines you carry.
     It would seem that the logical place to merchandise lice-killer shampoo is adjacent to the other shampoos and the hair conditioning products. However, research findings from Northwestern University and University of Chicago suggest you’re better off keeping it away from there, instead stocking it in the illness remedies department.
     In their study, the researchers first had participants look at an advertisement for shampoo. They wanted to evaluate the degree to which exposure to the shampoo ad would affect the participants’ impressions of a related product—hair conditioners.
     But when the ad presented to the participants was for a lice-killer shampoo, this instead led to more negative impressions of the hair conditioners. Consumers like their hair conditioners to have a pleasant sensual personality. Potions associated with killing and with bloodsuckers fail to project that personality.
     In contrast, thinking about the lice-killer had no significant effect on the participants’ liking of products from categories which don’t depend on being pleasantly sensual in order to motivate purchase. Flashlight batteries, for instance, as the lice-killer shampoo researchers predicted and then confirmed.

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Imbue Product Personality via Context

Monday, September 23, 2013

Drop Prices Slowly

Because of an abundant harvest, commodity prices on coffee beans are at a five-year low. Yet we haven’t seen deep dips in what Starbucks charges for your barista-customized latte.
     A recent Bloomberg Businessweek posting explains why: Big retail coffee companies buy beans through derivative contracts which even out prices over time. As a result, they’re almost surely paying more than the market price to suppliers now. And when a Starbucks customer is buying a cup, the understanding is that the cost covers much more than the raw beans.
     Another reason we’ve not seen retail prices on coffee dive has to do with what economists have named Rockets & Feathers. Prices on many item rise quickly, but drop slowly. Notice how gasoline prices rise as fast and directly as a rocket, but any price drops we see at the pump come down as slowly and unevenly as feathers. The economists’ explanations for Rockets & Feathers have to do with supplier costs and consumer search strategies.
     University of Chicago analyses concluded that Rockets & Feathers have historically occurred in about two out of every three supplier-to-retailer and retailer-to-consumer product transactions. It also is seen with services such as banking: Deposit rates respond more quickly to an increase than to a decrease in money market rates.
     The consumer psychology perspective on Rockets & Feathers is that dropping prices or raising returns dramatically can attract new customers, but it also has a clear potential to irritate current customers. They might conclude you were charging unnecessarily high prices or giving unnecessarily measly returns previously.
     Consumer behavior research at Northwestern University and Massachusetts Institute of Technology finds that lowering prices gently and with precision is a good way to ensure customers who visit your store often will continue to trust your pricing. The economists can still credibly use the word “feathers” to describe this pricing strategy, since one meaning of “feather” is to hit softly and precisely.
     Do drop prices to attract shoppers. Consumers are price sensitive and online technologies allow easier price comparisons than in the past. The Bloomberg Businessweek posting reports that prices on bags of Folgers, Maxwell House, and Dunkin’ Donuts coffee have dipped 6%. Even Starbucks ended up cutting prices, although only on bags of coffee sold at grocery stores.
     In your store, lower prices gradually and be ready to explain price decreases in the same way you do price increases.

Click below for more: 
Feather Pricing Changes with Precision 
Explain Price Ups & Downs to Customers

Sunday, September 22, 2013

Swoop In for the Sale After Disrupting

Over your store’s loudspeaker, you announce to people browsing through the shelves and racks, “We will be closing in fifteen minutes. It’s time to make your purchases.”
     Moments afterwards, some of the browsers bring purchases to the counter. But aside from those prompt responders, the others wander out of the store without buying anything.
     Part of the explanation of what happened has to do with the content of your announcement. Closing time is close. The shopper, having seen an item or two he or she likes, is motivated to complete the transaction before there’s any rush at the cash register by shoppers intent on beating the deadline.
     But in the story I’m telling you, there is no closing-time traffic. Why is it those who didn’t promptly make purchases instead walk away? Research findings from Chinese University of Hong Kong and Hong Kong University of Science and Technology indicate something else is at play: What you observed is due to the mixed effects when disrupting a shopper’s train of thought.
  • The initial reaction is to mobilize attention. The unexpected sound puts the browsers’ brains on alert for all the stimuli in the store. This increases the probability of immediate purchase, especially if the shopper had been dawdling over what are usually habitual purchases. The researchers found that the selling potential grows even if your interruption or the quality of your voice irritates the consumer. The attention arousal is an involuntary response. 
  • Not too long after the initial reaction, however, all the irritation at the interruption by the announcement makes the shopper want to leave the store. It’s become an aversive environment. This is bad in the short-term. You missed out on sales. It’s also bad in the long-term, since shoppers don’t like being in aversive environments. 
     When you disrupt a shopper’s train of thought, climb through the window of opportunity to close the sale, since opportunity opens wider for only a few moments.
     Researchers at University of Cincinnati, University of Indiana, and University of Twente told study participants that a candy bar would cost 100 cents, membership in a student interest group would cost 300 cents, and a tuition increase of 7500 cents was slated. The participants given this information, rather than the amounts in more conventional dollar figures, became increasingly anxious to make a purchase decision and increasingly certain of any positive judgments of the product, activity, or cost.

Click below for more: 
Number Costs and Benefits for Desired Effects 
Put Customers to Sleep After Irritating Them

Saturday, September 21, 2013

Resolve Conflicts with Attention to Style

Any retailer who has participated in planning a wedding knows about conflict. Researchers at California State University-Long Beach and York University marveled at how Vietnamese shoppers navigated through the wedding plan conflicts in ways which maximized harmony.
     The researchers note that harmony with family, friends, and coworkers is a central value for consumers from many Asian cultures. Still, the wedding planning they observed did not consist of participants discounting their own interests or making expeditious tradeoffs. Instead, the style was one of striving to shape what one wanted so that it also would benefit others.
     Organizational psychologists Kenneth W. Thomas and Ralph H. Kilmann call this striving style “Collaboration.” It is one of five conflict resolution modes they identified. By you staying conscious of the style you and your shoppers are employing, you’re in a better position to deftly settle disagreements.
  • Competing occurs when someone involved in the disagreement pushes to satisfy his own interests while ignoring the concerns of others. There are situations, such as emergencies demanding immediate resolution, where an assertive exercise of power is best. We might call it “dominating.” Also, if a party to the conflict is being ignored, competing on a particular point might bring her needed attention. 
  • Accommodating is the opposite of Competing. The individual yields his interests to calm or earn the gratitude of others. When you’re refereeing a conflict among shoppers, asking one or another of them to accommodate the others can be helpful if the issue is somewhat unimportant to that individual. Like Competing, Accommodating provides quick resolution. 
  • Avoiding the conflict also can have a place. A delay lets tempers cool. This is most likely when a specific time is set to resume negotiations and when you ask everyone to be thinking about how to collaborate. Otherwise, the conflict stews in the minds of the participants as they plan out in excruciating detail their next thrusts and parries. 
  • Compromising refers to the expeditious tradeoffs in wedding planning that the Long Beach/York researchers described. Fruitful compromises take time to achieve. To launch Compromising, ask the conflict participants to “split a difference.” 
  • Collaborating requires time and commitment as each participant interacts with the others to find solutions which come close to completely satisfying the specifications of all stakeholders. To encourage Collaborating, ask each person to describe what she understands the others to be saying. This works because it separates understanding from evaluating. 
Click below for more: 
Feel the Emotions When Negotiating

Friday, September 20, 2013

Handle Customer Satisfaction As Relative

How to explain that the higher the degree of customer satisfaction with a store, the lower the share that store has of the marketplace’s expenditures? It would seem that to grow revenues, the retailer should aim for low customer satisfaction.
     Scientists at Indiana University and University of Michigan set out to thoroughly investigate the puzzle. What distinguishes their study is the breadth of U.S. consumer markets they included and the long time period covered by the data they analyzed. Both these factors make the conclusions of the study more believable.
     Here’s my interpretation of the findings:
  • When a store has a high share of the market, that store becomes less likely to continue to give excellent customer service. This might be because the retail business is struggling to keep up with all the business they’re doing. It might be because they figure they no longer need to dazzle the consumers. In any case, this negative relationship between market share and customer service quality provides an opportunity for the smaller retailer to make inroads. Distinguish yourself by the high quality of customer service you give. 
  • High customer satisfaction is not closely correlated—either negatively or positively—with gaining market share. When this finding is put together with the first finding, it explains why statistical analyses show that the higher the degree of customer satisfaction with a store, the lower the share that store has of the customer’s expenditures. 
  • However, there’s an exception to this: When a store’s customer satisfaction score is significantly higher than that of other stores easily available to the shoppers, then market share does usually grow. Because continuing to maintain outstanding customer service costs money, the path to high net profitability is to give outstanding service only to the degree that you separate yourself from the competition. 
     To check where you stand relative to the competition, you could use what researchers at Ipsos Loyalty, Fordham University, and Vanderbilt University call the “Wallet Allocation Rule.”
     Ask your customers about where else they shop and their degree of satisfaction with each of the alternatives to shopping with you. Then look at where you rank compared to the others and plug the numbers into the WAR formula for each customer surveyed:
     To calculate your overall WAR score, average the results obtained from the customers surveyed. Calculate the WAR score for each of the other stores in the same way.

Click below for more: 
Assess the Costs of Customer Satisfaction 
Declare WAR on Customer Loyalty Measures 
Dazzle Your Customers

Thursday, September 19, 2013

Reward the Customer in Front of An Entourage

Treat your customers as Very Important Persons. This means rewarding them. And, say researchers at University of Michigan and University of Alberta, part of the reward for a VIP can be receiving preferential treatment in front of companions to whom the VIP wants to show off. The researchers call it the “entourage effect.”
     Other studies find:
  • When delivered in front of the entourage, the nature of the reward can produce equal customer gratitude even if otherwise less impressive—such as a lower-cost gift. 
  • On the other hand, if the reward is large enough for the customer to share it with the entourage, that is an even more positive experience for the customer. 
  • The entourage can consist of friends, family, or a combination of the two. It is the shopper’s desire to impress those others which characterizes an entourage. 
  • A desire to impress also affects what the shopper will choose to purchase in the presence of the entourage.  
     This last finding means a shopper whose preferences you think you know well can make quite different choices when coming in with a different group of people. For instance, when shopping with family members along, a consumer is more likely to take financial risks in purchases than when shopping with a group of friends. But the shopper with family is less likely to select highly unusual products or services.
     It can be frustrating for the conscientious salesperson. Here you and your staff are priding yourselves on knowing what each customer likes as soon as he or she walks through the door, and here you find that your assumption was wrong this time. The way to get back on track with your mindreading is to start pairing the shopper’s preferences with the characteristics of the entourage.
     Sell to the entourage members, too. When people shop together in groups of friends or as a group of family members, the total of their purchases tends to be greater than when they shop as individuals. At the same time, especially because the entourage effect puts the focus on the VIP, the others’ memory for what you tell them as a salesperson tends to be inferior. They forget what they are told more than do shoppers you address as individuals.
     Repeat the information when selling to a group. To avoid offending, give the information in different ways and remember to regularly give eye contact to the VIP.

Click below for more: 
Make Your Shoppers Feel Special 
Pair Preferences with the Shopper’s Entourage 
Accept Shopper Concerns About Acceptance 
Repeat Information When Selling to a Group

Wednesday, September 18, 2013

Mate Luxury Purchases with Gender Signaling

With both your women and men shoppers, know that their luxury purchases are a signaling system for mating rituals. The intended recipients of the signals are women in both cases, but the functions differ. Take this into account when making the sale.
     Researchers at University of Minnesota found that conspicuous display of luxury items by women serves a number of purposes. However, a predominant one is to warn other women that their mates are spoken for. A woman in the company of a partner, when that woman is wearing designer outfits and high-status accessories, was perceived by other women to have a more devoted partner who had financially contributed to purchasing the luxurious items.
     In one of the studies, the researchers asked a group of women to imagine a romantic partner flirting with another woman at a party. The study participants were then asked to draw luxury brand logos on illustrations of handbags, shoes, T-shirts, and cars. The drawings turned out to be about twice the size of those done by another group of women study participants who had not been asked to imagine the flirtatious behavior.
     Other University of Minnesota studies found that during the time of month a young woman is ovulating, she becomes substantially more likely to choose sexier clothing, shoes, fashion accessories, and cosmetics to buy and wear. This drive is much higher when the woman is shown photos of attractive women identified as being from her city than when shown the same photos and told the women live 1,000 miles away. A woman is not seen as relevant competition when she lives far away.
     For men, luxury items are displayed to attract women.
     Some British researchers noticed a gender difference in where customers kept a cell phone while sitting in a club. Men were much more likely to place the cell phone in a highly visible location soon after sitting down.
     So which one of these situations caused the greatest jump in how often a man would take out his cell phone, put it on the bar or table, and begin toying with it, even when not looking at it?
  • As the number of men in the area increased
  • As the number of women increased
  • As the percentage of men compared to women increased
  • As the percentage of women compared to men increased
Ready to know the correct answer? Yes, it’s the third situation.

Click below for more: 
Satisfy Desires for Luxury 
Update Keeping Up with the Joneses 
Help Customers Show Off New Products

Tuesday, September 17, 2013

Save Money with Contrasting Ad Context

EAT24—an online enterprise designed to link prospects for home delivery of food with restaurants in the neighborhood that deliver food—is bragging about their success advertising on pornography sites. In fact, to the surprise of the company, about 90% of the customers arriving via the porn site ads ordered complete meals, a rate significantly higher than for customers arriving via other routes.
     Sexual cues do enhance desires not only for sex, but also for gustatory pleasures, so perhaps the EAT24 folks shouldn’t have been so surprised. Yet it is surprise which may account for the effectiveness of the campaign. As EAT24 points out in their blog posting, almost all ads on porn websites are for more porn. An ad for food drew attention because of the contrasting context.
     Moreover, EAT24 was able to advertise on the porn sites at a much lower cost per 1,000 impressions than on Google, Facebook, or Twitter. Again, it’s because of the neighborhood.
     A parallel finding was in research out of Hofstra University and Saint Louis University which explored the effects of billboard location on the beliefs consumers formed about the advertised product or service, the consumers’ positive or negative feelings about the item, and the consumers’ intentions to purchase the item.
     Some stores shy away from having billboards in low-rent districts because of concerns that consumers will then see the store as low quality. The research found this not to be true. The implication for retailers: When using outdoor advertising, choose the locations based on traffic patterns, not by the quality of the neighborhood where the billboard is positioned. The contrast between the ad content and the ad location could bring extra attention at a bargain price.
     Researchers at Dresden University of Technology and University of Kiel looked at the effects of other ways to spring surprise ads: Ambient media. These use contexts like the inside doors of toilet stalls, hanging straps on buses, and the gas bags of hot air balloons. The studies of about 2,500 passersby and 300 survey respondents over a two-year period found that an unexpected contrast between the ad and context caused the consumer to resolve an inconsistency. In turn, this brought attention to the ad and elicited positive feelings toward it.
     The unexpected contrast must not be unpleasant, though. A low-rent neighborhood will work for the billboard, but a dangerously violent one probably wouldn’t, for instance.

Click below for more: 
Flex Your Understanding of Time Perceptions 
Attend to Context When Advertising
Tease with Incongruities

Monday, September 16, 2013

Recognize the Dangers of Thinking So

The 2013 Ig Noble Award in Psychology was announced September 12, and it adds to the evidence that thinking so can make it so.
     Those who carefully follow the RIMtailing blog recall that the annual Ig Noble Awards are given out by the Annals of Improbable Research for studies that come across as sufficiently odd as to usually draw a chuckle. Unlike the Nobel Prizes, which are awarded with formal pomp in Oslo, Norway, and Stockholm, Sweden, the Ig Noble Award ceremony is held in Sanders Theatre at Harvard University and includes Miss Sweetie Poo, always an eight-year-old girl who begins loudly chanting, “Please stop. I’m bored,” at any recipient whose speech exceeds the allotted time limit.
     This year’s Psychology prize was awarded to Laurent Bègue and Oulmann Zerhouni from University of Grenoble, Brad Bushman from Ohio State University, and from University of Paris, Baptiste Subra and Medhi Ourabah. They were honored for their study, published in the British Journal of Psychology titled “Beauty Is in the Eye of the Beer Holder: People Who Think They Are Drunk Also Think They Are Attractive.”
     Please note the “who think they are drunk,” not, “who are drunk.” The study participants—none of them college students—who either imbibed a fair amount of alcohol or were led to believe they’d imbibed a fair amount of alcohol when they actually hadn’t tended to rate themselves as brighter, funnier, and more attractive than did those who did not consume the alcohol and were told they hadn’t.
     The less bright, less funny, less attractive counterpart to the levity of this Ig Noble Award is that our customers might use the products and services we sell them to justify bad behavior. A number of years ago, I took on the consulting assignment of maximizing the payoffs from a program to reduce alcohol abuse among teenagers. One of our findings was that, at teen parties, boys who got intoxicated often had the objective of relaxing themselves to improve their sexual performance and girls who got intoxicated often had the objective of providing themselves an excuse for taboo sexual activity.
     We can do only so much to protect customers from themselves. But especially when it comes to young people, I suggest we retailing professionals remember how our responsibilities extend beyond making the sale. This is true even when the purchases produce placebo effects, as in the beauty-and-beer study.

Click below for more: 
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Level with Clients about Placebos 
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Sunday, September 15, 2013

Explicate Explicit/Implicit Attitudes

A half century ago, following publication of the landmark U.S. Surgeon General’s report Smoking and Health, researchers at UCLA asked cigarette smokers. “Why do you smoke?” Most answers were of the form, “I enjoy it and smoking in moderation is fine.” At another point, the smokers were asked to complete sentences like, “Teenagers who smoke are,” and “People who never smoke are.” Responses to the first prompt were words like “crazy” and “foolish.” Typical responses to the second prompt were “happier” and “wiser.”
     This illustrates the distinction between “explicit” and “implicit” attitudes. There’s no reason to think the cigarette smokers in the UCLA study lied. Instead, they were probably not consciously aware of their deep concerns about smoking until given the incomplete sentences task.
     Another technique used to discover implicit attitudes is the depth-oriented focus group. The consumers’ beliefs are assessed beginning with probes in the form, “To what degree do the sales staff at that store want to get you the right product for your needs?” Feelings are assessed starting with probes like, “When you buy a product there, how confident are you that you’ve made a good decision?” The payoff items—concerning intentions—begin with questions like, “Next time you need a product carried by that store, how likely are you to shop there?”
     Those probes are at the surface. The skilled focus group facilitator then uses a technique call laddering, unrolling a series of probes of the form, “What leads you to feel that way?,” “Please tell me more about what you mean,” and “What else?”
     You might lack the thorough training necessary to conduct depth-oriented focus groups. Still, appreciating the difference between explicit and implicit attitudes helps you understand why a consumer might say they don’t like an item and then end up buying it.
     Researchers at University of Virginia and Tilburg University presented consumers with evidence that Brand A apple juice was superb quality, Brand A orange juice was poor quality, Brand B apple juice was poor quality, and Brand B orange juice was good quality.
     When asked directly about their preference in orange juice, most participants answered that they’d prefer Brand B. However, another depth-oriented tool, called the Implicit Association Test, showed that the positive feelings about Brand A apple juice subconsciously spread to make attitudes toward Brand A orange juice more positive in ways which would influence a purchase.

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

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Probe for Intentions in Focus Groups

Saturday, September 14, 2013

Placate Lighter Diners with Smaller Plates

Nation’s Restaurant News says Olive Garden restaurants are augmenting their small plates menu, for a total of seven selections. One announced objective is to better attract diners who want a light meal at a low price.
     If these diners take up four-top tables which would otherwise be occupied by bigger-plate bigger-budget customers, Olive Garden might need to swallow smaller revenues. A body of consumer behavior research indicates that when people eat from littler plates, they feel full sooner.
     It has to do with what’s called the Delboeuf illusion: Draw two dots of the same size on separate parts of a piece of paper. Draw a small circle around one of the dots and a large circle around the other. Then show the paper to a friend and ask which of the dots is bigger. The correct answer, as you know, is that neither of the dots is larger. You drew them the same size. But the overwhelming majority of people will say the dot surrounded by the small circle is larger. The brain subconsciously judges the size of the dot by comparing it to the size of the surrounding circle.
     Experiments at Cornell University and in restaurants have shown that diners serve themselves less on small plates than on large plates because they judge the quantity of the food by comparing it to the size of the surrounding plate.
     But another body of consumer behavior research indicates Olive Garden’s small plate diners will end up eating more. Researchers at Technical University of Lisbon and Tilburg University found that when tempting high-calorie foods are offered in small sizes, people manage to consume a larger quantity. They order a multitude of the small offerings. Large servings trigger concerns about overeating. Smaller servings are perceived as innocent pleasures, relaxing the defenses against devouring second and third helpings.
     Olive Garden is probably aware of this phenomenon. Another announced objective of the small plates menu is to fit the reputation Millennials have for seeking variety. Rather than ordering a single large entrée, the diner can construct a meal from a bunch of the small plates.
     If you’re inspired to implement a small-plate initiative in your retailing, do keep the forks small. Researchers at University of Utah-Salt Lake City watched what people ate in a popular Italian restaurant. Some diners had been provided large forks and others, small forks.
     The big fork people ate less.

Click below for more: 
Fork Over Those Smaller Plates

Friday, September 13, 2013

Smooth Purchasing for Shoppers

Keep it smooth to make the sale:
  • Researchers at University of Leeds concluded that consumers are more likely to purchase a packaged item when the package is rounded rather than angular. They used chocolate products, bleach bottles, and water bottles in the studies. Because of the design of the experiments, the researchers say the preference differences between smooth and pointed can’t be accounted for by perceived ease of use of the package or the typical package design for that sort of product. 
  • Verifying what experienced retailers know, researchers at Maastricht University and Radboud University praise the value of smooth movement between service and selling. When the smooth switching was done well, both sales revenue and customer satisfaction increased. The researchers caution that because smooth switching uses up time, each staff member will not be able to handle as many transactions, on average. They also found that the switching happens more easily when you grant the staff member more discretion to make decisions in collaboration with the customer being served. 
  • When saying prices, accentuate “s.” Researchers at Clark University and University of Connecticut used this rule to make a price of $7.66 sound better than a price of $7.22. The “s” sound conveys smallness and smoothness to the English-speaking brain. A price stated verbally as seven dollars, sixty-six cents tends to sound small, and the purchase decision seems smooth. But an “oo” sound, as in seven dollars, twenty two cents, tends to sound larger. Other researchers—at HEC School of Management and University of Pennsylvania—found that when a high price is said slowly in a smooth tone, fewer customers object to the price. 
     Also know the exceptions:
  • Would you prefer mayonnaise in a slender, angular jar or the same contents in a jar with a smooth bulbous shape? The angular jar usually wins out. Mayonnaise buyers like thinking slender more than bulbous. 
  • The link of smooth with slow can hurt. The developers of the BlackBerry PDA originally wanted to call it the Strawberry because the little buttons reminded them of that fruit. But naming consultants said the “s” in strawberry implied a slow device. 
  • Women shoppers tend to like shopping environments with curves and alcoves. That’s not so true of men. It might go back to the Northwestern University research finding that boys are much more likely than girls to prefer rough chunky peanut butter to the smooth variety. 
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Thursday, September 12, 2013

Beef Up Your Appeal to Values

The Winn-Dixie supermarket chain, which claims title to “Home of the Beef People” as a trade-protected tag line, is inviting people to enter a contest by posting on Twitter a photo of themselves, each holding a sign reading “I’m Beef People.”
     For Winn-Dixie, the contest is an occasion to promote the chain’s rollout of their house branded Angus Beef.
     For me, the Winn-Dixie contest is an occasion to talk about you appealing to shoppers’ values.
     A while back, a team of researchers from France, Australia, and the U.S. told study participants they’d be given either a beef sausage roll or a vegetarian roll to eat. But those researchers had lied to half the participants, who actually were served the other entrée from what they’d been told.
     One group of those participants granted a high rating to the food, regardless of whether they actually ate the meat or vegetable version, as long as they thought it was meat. Unlike the veggie fans, these meat elitists showed up on psychological testing as embracing values of power and strength.
     Another set of studies concluded that how you show me the beef makes a difference. Consumers who seek power products such as red meat and sport utility vehicles like head-on portrayals, rather than side views, in ads for the items.
     Carry the merchandise and then market it in ways which allow customers to affirm their values.
     Researchers at Southern Methodist University and University of Texas-Austin watched what happened when people from UT were assigned to purchase a present for someone who wanted an item carrying the logo of UT archrival Texas A&M. The reactions were compared to those of a comparable group assigned to buy a gift emblazoned with the UT Longhorns logo.
     The researchers report that when selecting the item for the Texas A&M fan, the shoppers fidgeted, chewed on their lips, and averted their eyes. They crossed their arms, as if to distance themselves from what they were doing, and at the cash/wrap, they actually stepped away from the item, as if to say to anybody watching, “Don’t think this item represents who I really am.”
     Then the researchers provided relief. They offered to each participant a choice between an expensive silver pen with no logo or a low-priced plastic pen with the Longhorn logo. Those who had bought the Texas A&M gift were more likely to select the cheap pen.

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Wednesday, September 11, 2013

Sense When Wait Irritation Heats Up

The Los Angeles Times is reporting how Ralphs supermarkets use body heat trackers to reduce customers’ register checkout times. Sensors are positioned throughout a store, and employing the reasonable assumption that shoppers’ bodies produce heat, the system can assess when it’s time to deploy more cashiers. Ralphs says that waits to get to the front of the line are at half a minute, compared to the industry average of four minutes.
     In your store, you probably don’t need such a hi-tech method—and one that could creep out shoppers when they learn about it—in order to avert the irritation from waiting.
  • Giving customers something interesting to look at can help. Airport waiting areas use television sets with the sound volume kept low. You could do that, too. In hotel elevator lobbies, a large mirror causes time to go faster for waiting guests. Some retailers report good results from relaxing those waiting by pumping in a lavender or vanilla scent. 
  • Especially among American consumers, a foundation of the hating in waiting is the shopper worrying they’re being treated inequitably. “A shopper who arrived after I did might get waited on while I’m standing here waiting on and on.” There’s a research-based technique for easing that source of anxiety: Acknowledge each consumer as that individual arrives in line. Make eye contact. Smile. Nod. 
  • Work in front of the customer and give a running rendition about the progress being made. Say how far along you are and how much further you have to go. Researchers at University of Singapore and University of Toronto found that consumers evaluated the price of a locksmith service as a better value when the service took longer than when the lock was picked faster, as long as they were kept informed of the progress. Harvard University studies found that you can ease waiting anxiety and produce higher satisfaction even by depicting work that you didn’t really do. Maybe think of it as entertaining the customer. 
  • Build anticipation. Researchers at University of California-San Diego and Duke University discovered that although people say they would never pay more money if it meant waiting longer for delivery, those same people report experiencing substantial pleasure from anticipation during the wait. Consumer psychologists at University of Chicago found that with products like theatre tickets or premium chocolate candies, the average purchaser enjoyed it more if there was a delay before use. 
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Tuesday, September 10, 2013

Utilize Unit Pricing

Why would consumers consider a cleaning product in a smaller package to be of better quality than another brand of cleaning product which comes in a larger package?
     According to research findings from University of Texas-San Antonio, Hong Kong University of Science and Technology, and Chinese University of Hong Kong, the answer has to do with a common retail pricing practice: The smaller package generally carries a higher cost-per-unit than does the larger package. Consumers associate higher costs with better quality. When the researchers distracted the consumers sufficiently to keep them from estimating cost-per-unit prices, the effect disappeared: The product in the small package was no longer rated as being of higher quality than the one in the larger package.
     Judging a product to be of higher quality makes it more attractive to shoppers. That’s what perfume manufacturers depend on when using small containers for their offerings at retail. Catch the curiosity of the shopper by highlighting that the product carries a high price. Then say why it’s worth it.
     But for many shoppers, there’s an appeal of the large economy size. They might get stuck at the point where they look at the prices of items, failing to move beyond that point to notice much about the other measures of value to them, such as effective life of the product and how well the product is customized to their needs and characteristics.
     For these people, variants of unit pricing can facilitate sales:
  • A piece at a time. Partitioned pricing presents an item’s cost as a main price plus one or more additional charges. This highlights benefits. Researchers at London Business School and European School of Management and Technology used the example of IKEA charging separately for the table top and the table legs. 
  • Only pennies a day. The London/European researchers recommend you quote the price in terms of units of use. A tire retailer could state prices in terms of how much it costs per 1,000 miles. An insurance agent could point out that the superior policy costs only fifty cents per day more than the bargain policy. 
  • Beyond the horizon. A related technique is to get customers thinking about how much money they can afford to spend in the long run. Researchers from Princeton, University of Chicago, and Digitas-Boston found that focusing on the long-term raised by about 35% the amount the shopper was willing to pay. 
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Monday, September 9, 2013

Think Through Disaster Preparation Psychology

According to a U.S. Small Business Administration estimate, 90% of small to midsize retailers will end up closing their doors within one year after a major disaster unless they resume sales within five days.
     The SBA provides specific recommendations about preparing your store operations for earthquakes, tornadoes, hurricanes, floods, and fires. Each of the lists addresses the distinctive logistics for different types of disasters.
     There’s also a psychology in the preparation:
  • Don’t fall prey to labeling a near miss as a clear win. A Bloomberg Businessweek posting warned of the danger in putting so much energy into successfully surviving the last catastrophe that the retailer forgets to prepare better for the next one. 
  • Rehearse your store’s crisis management program. Recognize that consumers whose homes are destroyed or family members injured can suffer grief which leads to desperate actions. Along with gearing up to sell to your community members as much of what they desire with as few restrictions as possible, protect against hoarding and looting. 
  • Also recognize the psychological effects on your employees and yourself. Throughout the life of your business, cultivate and carefully maintain a spirit of teamwork you can call on after disaster strikes. For the interval your store or office is closed down, take time to see staff members face-to-face. Encourage use of professional counseling as needed to persevere through the trauma.
  • Know in advance what shoppers will want during and just after a natural disaster, and then be ready to put it front and center. There might be surprises. Walmart reports that in anticipation of violent weather, sales of Strawberry Pop-Tarts grow more than do sales of batteries, and the best-selling product of all is beer. Researchers at University of Pennsylvania found that the anxiety accompanying disasters leads consumers to prefer postcards with thick borders around the edges to similar postcards without a thick border. They also preferred orderly shelves, uncluttered aisles, and unambiguous instructions. 
  • Develop good working relationships with the people you’ll depend on for information during a disaster. Prepare for how that information will flow both ways. During hurricanes, the U.S. Federal Emergency Management Agency (FEMA) uses what they call a “Waffle House Index” to judge the progress of recovery. The WHI measures whether the restaurant in the area was open and, if open, whether a partial or full menu was being served. Waffle House restaurants planned the limited menus in advance and set rounded prices to include tax so that change for cash purchases could be made more easily. 
     Talking about the 2011 tornado which significantly damaged most retail business in Joplin, Missouri, Lori Rivera, FEMA Senior Outreach Manager, reminded us “Without retail, there was going to be no recovery.”

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

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Sunday, September 8, 2013

Let Go of Grudges

Earlier this year, Stanford University held a “Compassion & Business Conference” at which Jay Narayanan from National University of Singapore shared a tale to illustrate the value of forgiveness: A group of people were asked to estimate the degree of steepness of a hill. Before giving the estimate, some of the people were instructed to think about grudges they carry with them. The other people were instructed to remember in detail a time each had chosen to forgive someone who had committed a significant mistake.
     Prof. Narayanan reported that the grudge holders judged the same hill as steeper than did the forgivers. Compassion smooths out the journey, it seems.
     I agree. Over the years, I’ve found that it consumes loads of mental energy trying to remember who I’m supposed to be mad at. I’d rather devote that energy to briskly surmounting retail business challenges.
     I’m no sucker, though. I also support the epigram “Trick me once, shame on you. Trick me twice, shame on me.” Learn from the past, but do it without all the emotions of revenge. Place a higher priority on fixing the problem than on fixing the blame.
     There is evidence compassion may be drained out of American businesspeople by management education. Researchers at Appalachian State University and University of Nevada-Reno administered to 149 MBA candidates in the U.S. and Europe the Human Spirituality Scale (HSS). The HSS asks respondents how strongly they agree or disagree with each of a set of twenty items which have been found to reflect three themes generally accepted as constituting spirituality:
  • A reverent compassion for the welfare of others 
  • A larger context or structure in which to view one's life 
  • An awareness of life itself and other living things 
     The study participants were also presented with a set of situations measuring business ethics, such as reactions to a case of an auto dealer overcharging for repairs.
     For the European MBA candidates, there was no relationship between the HSS score and evidence of ethics. For the Americans, there was an inverse relationship: Overall, those scoring highest on the HSS showed the lowest adherence to business ethics. The researchers conclude that the current generation of students of business are more likely to consider spirituality in self-interested terms than in terms of what will benefit others.
     The truth, as it turns out, is that showing compassion toward others does advance the businessperson’s self-interest.

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Saturday, September 7, 2013

Finesse Profit Margins on House Brands

A collection of research results offers guidance to you as you set profit margins for the private label goods—house brands—on your shelves and racks. Recall that profit margins, not the prices themselves, are what pay the bills.
  • By cultivating a range of suppliers for your house brands, you can achieve higher profit margins. The obvious reason is that limiting yourself to one source curtails your power to negotiate lower supplier costs. A less apparent reason is that having a range of suppliers gives you the confidence to fully exploit your negotiating skills. 
  • Adding a value version to a premium version house brand allows you to profit by setting a higher margin on the premium version. Prior to introduction of the value version, the premium version was likely to be considered by consumers to be of standard, not premium, quality. After introduction of the value version, consumers’ quality assessments of the premium version increased. 
  • If a premium version is introduced to an existing value version, the assessment of the value version doesn’t change noticeably. 
     Some of the supporting research was conducted at Katholieke Universiteit Leuven in Belgium and Tilburg University in the Netherlands. It’s possible the results would not hold as strongly in the U.S., since other studies have found cultural differences in American consumers’ reactions to private label pricing.
  • Research based at University of Memphis suggests that African-American consumers tend to steer away from private label brands in clothing, particularly boys' clothing, because the private label lacks the cachet of widely advertised brands. 
  • Other research finds that Asian-Americans expect much more information about product features and consumer ratings when considering house brands than when considering national brands. Raising profit margins on the house brands implies higher prestige. 
  • 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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Friday, September 6, 2013

Utilize Multichannel with Hedonic Selling

Retailers have been led to believe it’s wise to encourage consumers to shop offerings via multiple channels. Face-to-face in-store. Online via mobile devices. Telephone orders. A booth at community events. And more.
     Early in the drive toward multichannel retailing, Saks Fifth Avenue customers who shopped at both Saks.com and at a Saks store were spending five times as much as customers who used just one or the other.
     Now findings from studies at University of North Carolina-Chapel Hill and Texas A&M University have refined the advice: Multichannel retailing appears to be most profitable when people are seeking pleasure-oriented products and services. Perhaps the reason is that these shoppers find enjoyment in a variety of shopping experiences. One way they obtain this is to shop at different stores. Researchers at University of Pennsylvania and Columbia University speculated that the novelty increases the amount the consumer is willing to pay. Your customers might be shopping around even for products they could purchase from your store because they seek the stimulation.
     Rather than let go of these hedonic customers, explore ways to make their shopping experience more varied. That’s what multichannel retailing does.
     The North Carolina/Texas researchers found that for utilitarian items, purchased more for function than for sensual pleasure, multichannel appeals aren’t best. Among consumers who consider the utilitarian purchase to be high risk, the most valuable segment consists of those who buy online rather than in-store. Online shopping offers the opportunity to corral abundant opinions from an array of sources.
     Still, you’d be wise to encourage in-store visits from these customers. Talk and write about the talents of your staff in providing guidance to reduce uncertainties in buying items. And even if the purchase is made from your online channel, offer incentives for the customer to pick up the item from your store. Consultants to retailer REI have reported that when REI.com customers come into the REI store to pick up items they ordered online, as more than one-third of them choose to do, those customers buy an additional $75 in merchandise, on average.
     Another way to expand your multichannel retailing thinking is to remember paper catalogs. Along with in-store, catalogs were the channel most profitable for retailers among consumers considering their utilitarian purchases to be low-risk. Research indicates that catalogs are at their best with items where sales benefit from large picture spreads and an abundance of textual description.

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Thursday, September 5, 2013

Mash Up Store & Online for Gamification

Incorporate casual games into your product lines. Casual games are distinguished by the shallow learning curve—you can start playing at a primer level right away—and by how players commonly intersperse brief play sessions into other activities.
     An argument for you selling casual games is the popularity. Last October, Roland Berger Strategy Consultants estimated that 25% of the world’s population and 50% of Americans were casual gamers. The distribution is skewed toward women and teens, both of whom are the kinds of people who buy all sorts of items.
     A prime argument against you including casual games in your product line is that about 90% of people will download a game without paying for it or expecting to pay. If you’re charging for Angry Birds, which has been downloaded more than one billion times, a 10% conversion rate does fine in paying the bills. But most games are not that popular on their own.
     In addition, store-based retailers wouldn’t want to depend on an online sales channel.
     Still, you can combine the store-based with the online. For instance, how about sending your target audience members out on a scavenger hunt? That’s the game where you give participants a list of items to find and maybe clues to finding the items. The first player or team to fulfill the list wins.
     It’s said that renowned party hostess Elsa Maxwell coined the name in the 1930s. Since then, store/online scavenger hunt blends have been used by retailers to build excitement and knowledge about offerings. Here are two examples:
  • A promotion for Dodge dealers attracted more than one million YouTube hits. The viewers were watching people finding one of the three Dodge Journey cars hidden in a scenic U.S. location. Each clue included information about the Journey’s features. 
  • Cathay Pacific introduced its non-stop Chicago-Hong Kong route with a challenge to collect experiences. Post a photo of yourself at the entrance to Chicago’s Chinatown and then a photo of yourself reclining in the Cathay Pacific business class “Comfy Seat” sample at O’Hare Airport. 
     Shoppers have always loved playing games. Scratch-off discounts. Sweepstakes. “Design our new logo” or “Name our new service” or, decades ago, “Tell us in 25 words or less why you shop at our store.” Tap into that spirit, with a blend of the virtual and real worlds.

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Wednesday, September 4, 2013

Invert First Impressions Via Reverse Psychology

Asking consumers to do one thing can result in them doing the opposite:
  • Researchers at University of Miami, University of California-Berkeley, and Hong Kong University of Science and Technology found that study participants assigned to remember “savings brands” slogans like Walmart’s “Save money. Live better” were willing to spend twice as much as those exposed just to the Walmart name. 
  • Chrysler Group—the company selling the Ram truck—paid for a marketing campaign which included hate mail about Ram truck drivers. The objective was to stimulate protestations of love for the truck. 
  • On a Cyber Monday, outdoor gear retailer Patagonia ran an ad headlined “DON’T BUY THIS JACKET.” Sales of the jacket warmed up notably, and Patagonia’s “buy less” campaign ended up contributing to revenue increases of over 30% in 2012, according to Bloomberg Businessweek
     Reverse psychology’s a delicate strategy. Still, there are circumstances and ways in which you can mobilize it to boost profits.
     The Patagonia ad was tongue-in-cheek. Nobody thinks a store would urge you not to buy their offerings. Even when you truly are. Following Hurricane Sandy hitting America’s Eastern Seaboard, a New Jersey supermarket broadcast in-store appeals for people to buy no more than what they’d need for a couple of days. Shoppers paid little attention to the appeals. A retailer telling shoppers not to buy is unusual enough to lead to a pushback. “It’s still a free country! Nobody’s telling me I can’t buy as much as I want!”
     With this New Jersey supermarket’s appeal, I also imagine the customers thinking, “The best way to make sense of this strange request is to assume the stores around here will be completely running out of supplies. So I’d better buy for my family, friends, and myself.”
     With the Patagonia ad, the easiest way the reader could make sense of the bizarre headline came from noting the accompanying pitch to take a pledge to join the retailer in reducing waste. Shoppers would want to reward such social conscientiousness. What more straightforward way to deliver a reward than to spend your money with them?
     Reverse psychology delivers its effects—desired in the case of Patagonia and Ram, undesired in the case of the New Jersey supermarket—when consumers have a way to rationalize doing the opposite of what’s being requested. Also, once that rationalization exists, the stronger the retailer’s request, the more likely is the inverse action.

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Curb Hoarding 
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Tuesday, September 3, 2013

Abstract Shoppers to Avoid Choice Overload

Some years ago, researchers at University of Pennsylvania and Columbia University found that large product assortments attract shoppers to a store, but once there, many of the shoppers avoid making a purchase because they’re not sure what’s best. Because of indecision, they might leave the store.
     Now, studies at Yale University, University of New South Wales, and Peking University indicate that you can avoid this problem by encouraging the shopper to think in more abstract ways, such as about features the items have in common rather than considering each item in the choice as unique. Similarly, researchers at University of Delaware and University of Pennsylvania discovered that a way to keep shoppers engaged is to encourage them to focus on product features rather than item alternatives. With the features in mind, the person can start rating each alternative until coming to a decision.
     So in your marketing, point out how you offer a large number of choices. When a shopper starts the shopping with you, display categories within categories to highlight the abundance of alternatives.
     Then recognize the potential for choice overload.
  • To make things easier for the shopper, use similar wording in describing the features of each product. And provide tables that list features across the top, the names of a small selection of product alternatives along the left side, and checkmarks in the cells to indicate which product has which features. 
  • In the product descriptions and in the table, describe features concisely. Outside the table, state the benefit of each feature: “Low rolling resistance gives you better fuel efficiency.” 
  • Include no more than five of the most important product features and no more than five of the product alternatives. If the product alternatives are highly similar in what features they have, include one or two trivial features which one or two of the alternatives have, but the others don’t. This helps unfreeze the decision maker who is immobilized by information overload. 
  • Make it easy to choose more than one alternative. Say something like, “As you noticed, this sweater comes in five designs. Which of those designs might you want to buy?” In signage, list the flavors along with the text, “How many flavors do you want?” Offer a discount for multiple-item purchases. Set a package price that results in a lower per-item cost, such as six pairs of socks, two each of the three most popular colors. 
Click below for more: 
Compare Features to Ease Overload 
Make It Easy to Choose Two

Monday, September 2, 2013

Nudge Shoppers Toward Profitable Habits

A recent New York Times feature describes a bundle of research-based tactics supermarkets have used in programs to influence shoppers to buy a greater quantity of fruits and vegetables instead of less healthy processed food alternatives:
  • Installing a mirror inside the cart so that the shopper will see his or her face. This increases personal accountability. 
  • Instead of the mirror, installing a reflective card informing the person about how other shoppers were buying bananas, limes, and avocados. Social norms often guide people’s behavioral choices. 
  • Dividing the cart into a front and back section with a strip of yellow tape and then instructing shoppers to place the produce in the front section and the other items in the back section. This increases food choice awareness. 
  • Laying down large floor mats with green arrows pointed toward the produce aisles. Shoppers unfamiliar with the store might go by those aisles because they think they’re being directed to do so. Shoppers familiar with the store might follow the arrows out of curiosity. In both cases, the more footsteps passing by the fruits and vegetables, the greater the odds for body-friendly goods to end up going home. 
     If one of these tactics is good, would two or more be great? No. In El Paso, Texas grocery store trials, implementing either the reflective cards or the arrow floor mats raised produce sales, but using both of them at the same time caused produce sales to drop.
     How about going bigger with one of the tactics? New Mexico State University and University of North Carolina researchers experimented with a full-length mirror right inside the entrance to the grocery store. No reported effect on produce sales. It seems better to have a small mirror facing the shopper in the face for the duration of the travel up and down store aisles.
     The results from psychologically nudging shoppers beat out results from trying to psychologically beat shoppers into submission. Other examples:
  • In personal selling, use rhetorical questions—yes/no inquiries to which the answer is felt to be so obvious that no reply is necessary—only after you sense that a customer wants to make the purchase, but needs a bit of a nudge. 
  • A brief mental nudge of customers toward them thinking in the long-term significantly increases the possibility they’ll spend more money in your store. But a mental bludgeon against considering short-term consequences is likely to backfire. 
Click below for more: 
Use Rhetorical Questions to Close Sales 
Respect the Limits of Your Influence 
Tip Off Shoppers Before Manipulation

Sunday, September 1, 2013

Shape Benefits As Hedonic or Utilitarian

The importance of a particular dichotomy among shoppers and another dichotomy among items has been repeatedly verified by consumer psychology research:
  • Some shoppers are primarily promotion-focused, while others are primarily prevention-focused. Promotion-focused people play to win, while prevention-focused people play not to lose. 
  • Some items have a primarily utilitarian appeal, while others have a primarily hedonic appeal. The utilitarian is to get a job done. The hedonic is to feel pleasure. A convection oven has utilitarian appeal. The uncooked cherry pie purchased for preparation in the convection oven has hedonic appeal. 
     In general, promotion-focused shoppers are more attracted to hedonic benefits than are prevention-focused shoppers. The prevention-focused are more attracted to utilitarian benefits than are the promotion-focused.
     As you get to know your shoppers, determine where on the promotion-prevention dimension each individual is and shape your benefits statements to fit.
     Researchers at Curtin University of Technology in Australia and Nanyang Technological University in Singapore give as an example ads for yogurt. I’ve adapted those examples so each contains exactly the same number of words:
  • Hedonic. “The yogurt comes in a wide range of fruity flavors, like strawberry, apricot, mango and kiwi, in addition to the original tangy flavor. This makes our yogurt a wonderful choice for every occasion. You just cannot resist the temptation of its fruity taste. In addition to the wide range of flavors mentioned above, the yogurt contains real fruit chunks for added taste. You can actually see the chunks of fresh ripe strawberries or mangoes that have been added to the yogurt to tingle your taste buds. The pieces of fruit have been especially added to blend with the original rich and creamy taste, thereby completely delighting you gastronomically.” 
  • Utilitarian. “The yogurt is made from calcium and vitamin-fortified milk. It is specially formulated to capture the goodness of high calcium yogurt. In addition, its formulation also ensures that it has absolutely low levels of fat. It is, in fact, 97% fat free. The yogurt has essential bone nutrients, like vitamins D and K, in addition to other nutrients like zinc and magnesium. The presence of these nutrients helps you maintain strong bones, especially important in adults. The yogurt contains two live cultures, Streptococcus thermophilus and Lactobacillus bulgaricus. Consuming yogurt with live cultures maintains a balance of bacteria in your digestive system, which helps ensure your ongoing good health.” 
     What phrasings will work for your items?

Click below for more: 
Promote Supervision Which Prevents Problems 
Pack In Attributes for Hedonic Items