Tuesday, December 31, 2013

Weekly I Turned

As the calendar turns to 2014, I’m turning my RIMtailing posting frequency from daily to weekly. My next posting will appear Monday, January 6, 2014 at 9 AM California time. Subsequent postings will appear each Monday at that hour.
     There are already more than 1,700 posts on the blog covering research-based profitability tactics for a broad range of retailing topics. How to get to the right ones for your needs? I recommend the “Search the Entire RIMtailing Blog” feature. However, do be aware that the search algorithm is less sophisticated than in major engines like Google and Yahoo. If you don’t locate what you want with a certain phrasing, resubmit using related wording.
     When you locate posts that hit your interests, try the “Click below for more” list I include with most of my postings. To encourage busy retailers like you to read what I write, I keep each posting to fewer than 400 words. But I find there is always more I could say. The “Click below” lets me do that. Just as important, the “Click below” ties together the brief posts into a more coherent plan of action for you to implement.
     My original objective in creating the RIMtailing blog was to provide my training and consultation clients with continuing updates and reminders. After my book Retailer’s Edge was published, I saw an expanded audience for the blog from the readers. And considering the inquiries I receive, there are merchants, suppliers, academics, journalists, consultants, and consumers who have found value in the postings even among those who aren’t my clients or my book readers.
     As you might detect, I enjoy transforming high-quality consumer behavior research findings into workable tactics for retailer profitability.
     My title for today’s posting was inspired by the name of a classic comedy routine, “Slowly I Turned.” The shtick includes the phrases, “step by step…inch by inch.” Please consider those words as guidance for how you put into practice the tactics I propose to you. Conduct a needs assessment to identify strengths and weaknesses of your current business operations, plus the opportunities and the threats from outside. Then, to keep yourself from wasting resources by riding off in all directions at once, carefully select a set of tactics to begin with and to add onto later. And to facilitate your success, join with others to move as a community of merchants.
     …More each week.

Click below for more: 
Take a Swat at SWOT 
Focus for the Holidays 
Perpetuate Beautiful Days in Your Neighborhood

Monday, December 30, 2013

Transport Resolutions with Tokens

As we approach the annual opportunity for New Year’s resolutions, I remind you of the resoluteness of consumer habits. The best predictor of future behavior is still past behavior.
     Yet, it can take only a small token reward to nudge people toward starting to do what they know is better. One example, from the realm of health care in a third world country, is described by researchers at Massachusetts Institute of Technology:
     Although parents in India generally recognize the importance of having their children immunized against diseases, they often neglect to do it. Recognizing this, the researchers divided a set of rural Indian villages into three groups:
  • Immunization was available, but no clinics were announced 
  • Clinics were scheduled, and the schedule was broadly publicized 
  • At the scheduled and publicized clinics, each parent who brought in a child for vaccination received a small quantity of lentils 
     The rate of immunization for young children turned out to average 6% for villages in the first group, 17% for those in the second group, and 38% for those in the third group. A small reward more than doubled the consumption rate.
     Other research indicates that it is, in fact, the modest size of the token which accounts for its effectiveness. If the incentive is large, the consumer comes to view it as a payment for compliance. The result is a reversion to the old habits as soon as the incentive is discontinued. Worse yet, the bigger the reward, the greater the possibility the consumer will perceive it as a bribe and consequently dig in her heels against change as a matter of honor.
     Harvard University researchers say that another important characteristic of effective tokens is that they can be used promptly. The bag of lentils qualified. Similarly, surprise gifts which give immediate pleasure have been effective in convincing children in economically deprived circumstances to prefer healthy foods. On-site experiences—such as the opportunity to meet the chef at a restaurant—can be effective tokens, since experiences are consumed more promptly than products.
     The small incentive nudges the shopper to take the risk of purchasing. Researchers at University of Chicago and Columbia University find that with financial investment decisions where the client gets stuck, it works to offer a small gift with each alternative because this moves the decision toward the riskier choice, breaking the tie. The researchers call this the “mere token effect.”

Click below for more: 
Give a Free Token to Shift the Odds 
Dissolve Decision Paralysis 
React When Faced with Reactance 
Nourish Good Shopper Rituals

Sunday, December 29, 2013

Dump Sadness on Some Dumped Shoppers

When your shopper’s been dumped, they’ll probably want to be indulged. It was in spring 2005 that Ben & Jerry's ice cream shops introduced customers to a special selection of new flavors. With names like Chocolate Therapy, Apple-y Ever After, and The Last Straw, these flavors were not, as it happens, designed to stimulate the romantic urges we associate with spring. No, the Ben & Jerry’s folks intended the new flavors to soothe rather than stimulate. The retailer aimed to maintain their reputation as what an entire sorority had called their “breakup ice cream brand of choice.”
     Researchers at University of California-Berkeley, Fundação Getulio Vargas in Brazil, and KAIST in South Korea agree that when enduring emotional distress from intimate relationship problems, many consumers do seek positive aesthetic experiences, such as cheerful music and zany comedies. However, the researchers also uncovered circumstances where the shoppers preferred sad music and tear-jerking movies. This occurred if the downhearted aesthetic experience gives a feeling of understanding companionship.
     A salesperson who is not overly upbeat helps as well. If store staff exude a positive mood, it increases sales. But there can be too much of a good thing when the customer is feeling down. Research findings from Northeastern University indicate that, with one important exception I’ll tell you about in a moment, a customer who is in a bad mood is unlikely to buy from a salesperson who clearly appears to be in a much better mood than she herself is.
     Many customer service gurus preach that salespeople should exude the nonstop cheerfulness you’d see in Mickey and Minnie Mouse at a Disney theme park. But if I’m feeling downright irritated and irritable because I’d much rather be home in bed resting instead of hunting down a cold remedy, my irritation fairly explodes with some salesclerk who fails to even acknowledge my horrible state.
     Customers want to spend their money with retailers who will confidently help them solve problems. A way to show that confidence is for the salespeople to project a positive approach. But with the one exception, the salesperson’s mood should be just a little more upbeat than the customer’s. The exception? The research says that when the shopper is feeling truly desperate, he has no objection at all to dealing with a highly cheerful salesperson. This is an instance where misery doesn’t want company, but instead prefers a can-do attitude.

Click below for more: 
Be Just a Little More Upbeat Than Your Customer 
Lift the Spirits of Your Customers 
Cry All the Way to the Bank 
Kick Out Customers Using a Welcome

Saturday, December 28, 2013

Dangle Lucky Charms Before Sports Fans

In the 2012 movie Silver Linings Playbook, Pat Solitano, Sr., the character played by Robert De Niro, is obsessed with having the right good luck charms at hand so his team, the Philadelphia Eagles, can win.
     Although that depiction may exaggerate what’s true for typical sports fans, it’s true how these folks, as well as casino gamblers, are drawn to items they believe, or want to believe, will tilt the odds in their favor. What’s behind this from a consumer psychology perspective? asked researchers at Tulane University and Columbia University.
     Their answer is that when people have a high emotional investment in an outcome over which they can exert little actual control, they get superstitious. Football players may have their preferences for good luck charms, but since the players do influence the game’s outcome, the attraction is less intense than it is with fans who aren’t out on the field, but still consider the team to be an extension of themselves.
     All this provides an opportunity for you to cheat your shoppers by selling them items which are not in their best interests. As the Tulane/Columbia researchers say, you could set up circumstances in which you’d hawk to some fans Dr Pepper instead of Coke, even though those fans hate the taste of Dr Pepper and like the taste of Coke.
     This is not an opportunity you’d be wise to exploit. Cheating customers rarely pays off well for the retailer who’s in it for the long term. However, you’ll profit all around when you associate good luck in the shopper’s mind with items which will genuinely benefit them, or are at least innocent sops.
     At the same time, help the purchaser stay aware that any charm bestows less than invincible powers: Researchers from North Carolina State University and University of South Carolina analyzed two sorts of outcomes for high-stakes football and basketball game, such as a playoff or a homecoming rivalry. They found that the closer the game, the higher the number of automobile fatalities. This finding was much more striking when the winner was the fan’s home team. There was no evidence of a significant increase in traffic deaths in the hometowns of the losing teams.
     Winning a close game, when it is a vicarious experience as a spectator, generates high levels of testosterone, interfering with sober judgment when driving. No lucky charm will compensate adequately for that.

Click below for more: 
Sport Attractions for Watching & Playing 
Offer Superstitious Shoppers Good Luck Charms 
Beware the Intoxication of Wins

Friday, December 27, 2013

Close Out the Purchase

After making a purchase, the customer might have second thoughts about whether she acted wisely. These second thoughts are one important cause of product returns. Because product returns can create inventory and customer service problems, we’d like to reduce the post-purchase doubts, a form of what psychologists refer to as “cognitive dissonance.”
     Following analysis of responses from a sample of Walmart and Target customers who returned items because of cognitive dissonance, researchers at University of Alabama-Birmingham suggest that liberal return policies will, ironically, reduce the extent of returns. People mentally wrestle less with themselves when feeling they’re in control.
     Researchers at London Business School suggest another method: Have the consumer engage in a physical action to close out the purchase. In one of the studies, shoppers were presented 24 chocolates and asked to select one to eat. Some of the people were asked to replace the lid on the tray before eating the chosen chocolate. The rest of the people were not asked to replace the lid. In another version of the experiment, diners were given the opportunity to select an item from an extensive menu and then either directed to close the menu before tasting the item or not directed to do so.
     Afterwards, the participants in the laboratory were asked how much they enjoyed what was selected. Those who replaced the lid or closed the menu reported higher enjoyment and more confidence they’d made a good choice. The London researchers believe this physical closure effect makes the most difference when there are many alternatives available to the decision maker.
     The researchers also say that if the retailer performs the act of closure—such as replacing the lid on a candy tray or closing the menu—it will be less effective than if the purchaser does it.
     In the real world, as opposed to the university laboratory, we might hesitate directing a shopper to perform a specific physical action upon making a selection. It’s reassuring, then, to know that the salesperson’s act of closure also can be effective, even if not as effective as the purchaser’s.
     Give sounds of confirmation as the transaction progresses. When placing the purchased merchandise into a bag, fold the top of the bag over in a way that’s easily visible to the customer. Hand the bag or the unbagged item to the customer decisively, with a “thank you” and nod which signals completion.

Click below for more: 
Head Off After-Order Regrets 
Simplify Item Returns for Customers 
Sound On When the Purchase is Completed

Thursday, December 26, 2013

Stay Aware of the Drive to Share

A nurse opens the door from the examination area and announces to those in the waiting room, “Mr. Frederick. Congratulations. You are the one-hundredth patient who has come to our clinic this month, so you get to see the doctor now, ahead of any here who arrived before you or scheduled earlier appointments. Come on in!”
     Consider the reactions other patients in the waiting room would have to such an announcement. Then please consider Mr. Frederick’s reaction. You might think that once inside the door, he’s pleased he didn’t have to wait longer. On the other hand, while running the gauntlet between those other patients from his seat into that door, Mr. Frederick’s likely to feel mighty uncomfortable.
     Researchers at University of Oregon and University of British Columbia analyzed situations in which a consumer receives preferential treatment in front of fellow consumers. It could be the hotel registration clerk who says to a guest, while others who just checked in are still there, “We’re upgrading you to a suite at no extra charge because we just now ran out of regular rooms.” Or the sales clerk who gives a shopper a coupon and says, “I have only one of these for a special discount, so I’ll give it to you.” For the researchers, it was extra free samples handed to some consumers without explanation.
     It would seem that the recipient of the preferential treatment should feel great. And it’s true that if you’re providing a reward in a way which allows the customer to share the reward with others, doing it in front of the entourage increases the psychological value to the customer. But the Oregon/British Columbia researchers found that unless the reward could be shared, most recipients were less satisfied with the product or service than if the treat had been delivered outside the earshot of other consumers or if a good reason was given for the action.
     Other research at University of British Columbia, along with University of Alberta, indicates that in our doctor’s office scenario, Mr. Frederick’s discomfort would be even greater if the chairs were arranged in a circular than in an angular pattern. Whether in a waiting area, lobby, or dining area, a circular arrangement activates consumers’ drive to share with others and conform to the opinions of others. An angular arrangement activates an acceptance, and even a preference, for being superior to onlookers.

Click below for more: 
Make Your Shoppers Feel Special 
Offer Exclusive Price Discounts Cautiously 
Reward the Customer in Front of An Entourage 
Win First Place As a Secure Third Place

Wednesday, December 25, 2013

Review the Relevance of Reviews

In the latest issue of Harvard Business Review, Stanford University’s Itamar Simonson and his colleague Emanuel Rosen recount a 1992 experiment about pricing and item selection: A group of consumers were asked to choose between two cameras, one costing $169 and the other costing $239, as a preferred purchase. Then another group was shown those two cameras plus another, priced at $469, and asked to choose. With the third camera in the mix, there was a substantial shift in preference toward the $239 item, now considered as a compromise choice.
     The effect has been seen outside the laboratory in real retail settings. Some years ago, Williams-Sonoma found that after they added a $429 bread-making machine to their merchandise line, sales of the $279 unit doubled. When a higher-priced alternative is added to a list of choices, alternatives which cost less become more appealing to the shopper.
     Last year, Prof. Simonson and another Stanford researcher, Taly Reich, dusted off the 1992 experiment protocol and added an angle: Consumers were shown user reviews from Amazon along with the cameras. The result? No more compromise effect. People turned to the reviews for primary guidance.
     Encouraging positive reviews of your store and the items you carry is useful. But the research finds that the importance of reviews depends on the nature of the store and the items:
  • Items which incorporate state-of-the-art technologies and stores selling primarily those items will be selected largely on user reviews. 
  • For luxury goods and others purchased largely for emotional satisfaction, user reviews of product performance count for less, although what people say does play into the status image of the items and the stores carrying those items. 
  • With low-involvement habitual purchases, such as milk and facial tissue, user reviews are only a minor influence. 
     More generally, research at University of Alabama and Brigham Young University identified five major sources that shoppers use to gather information to help them make purchase decisions. The list is time-tested. Still, you'll want to update it by learning what is true for your shoppers. In knowing where your shoppers are getting their information, you'll be better able to allocate advertising and publicity resources.
     Have your sales staff ask customers how they determine purchase preferences. Also, if you conduct consumer attitude surveys, regularly include items asking about these five sources.
  • Visiting stores and retailers' websites 
  • Advertisements 
  • Sampling the items 
  • Friends and family 
  • Independent reviews 
Click below for more: 
Encourage Shoppers to Post Trustworthy Reviews 
Indulge Splurging HENRYs 
Ask Customers Where They Get Pre-Purchase Info

Tuesday, December 24, 2013

Analyze Rather Than Reject Surprising Findings

Most consumer psychology research findings reinforce and refine rather than contradict what experienced retailers already know. However some findings do fly in the face of expectations. With such cases, it’s important to consider something statisticians call “moderating variables.”
     For example, an analysis of study results at Loyola University-New Orleans indicates that stores named after the owner garner less consumer trust, on average, than other stores. Mike’s Auto Repair is less trusted than Downtown Auto Repair, all else being equal.
     It seems to me that including the owner’s name would add to the trust, not disrupt it. Consumers prefer to conduct transactions with people than with anonymous organizations. It’s nicer to know who you’re dealing with. It’s one of the many advantages locally-based retailers can offer.
     The explanation for the surprising finding is in a moderating variable identified by the Loyola researchers: The degree to which the consumer trusts retailers in general. For those who think most store owners are out to rip you off, the mistrust antennae are indeed activated when they see the owner identified in the store name. But this was not true for consumers who aren’t highly suspicious of retailers. For them, there was no big difference in trustworthiness between Mike’s Auto Repair and Downtown Auto Repair.
     When the Loyola researchers gathered their sample, they were combining people for whom the name didn’t make a difference with those for whom it did. Statistically, it turned out that there was an overall tendency to distrust the Mike of Mike’s.
     The implication of all this for you: If you choose to include your name in the name of your store, work especially hard to earn and maintain the trust of prospective customers.
     Identifying the moderating variable also can help untangle confusing findings: Researchers at National Chengchi University in Taiwan found that a happy consumer is more likely than a sad consumer to believe a retailer’s claim a promotional offer is high value. But this difference between happy and sad consumers is less pronounced when statements about the product being promoted are about attributes highly important to the consumer.
     Here, the moderating variable was the value of the promotional offer. For high-value offers, mood made a difference. For low-value offers, it didn’t make a difference.
     Since you’ve less than absolute control over a shopper’s mood, present product attributes and benefits you find are highly important to that individual shopper.

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Monday, December 23, 2013

Stop Threatening My Buds

Some years ago, a set of studies at Erasmus University in the Netherlands, INSEAD, and London Business School found that a certain set of campaigns to encourage breast cancer screening had the opposite effects, and worse: These campaigns:
  • Reduced women’s perception they would develop breast cancer 
  • Produced women’s self-reports that they were finding it hard to truly understand moderately complex articles about breast cancer 
  • Reduced the interest of the women in donating money to fight breast cancer 
  • Reduced the motivation to donate money to fight ovarian cancer, another female disorder 
     What distinguished these unsuccessful campaigns from others was the emphasis on the woman’s gender:
  • Text messages: “If you are a woman, what you are about to read could save your life.” 
  • Direct imagery: A photo of a woman covering with her hands the area where a cancerous breast had been removed 
  • Symbolic imagery: A pink ribbon, which has become associated with femininity 
     Now research at University of South Carolina and Hong Kong University of Science and Technology provides additional insight as to what was going on, and how it applies beyond selling breast cancer screening.
     When consumers feel that an important group membership is being threatened, they’ll try to protect their buddies and, in the process, often fail to remember details surrounding the threat. This is true even when the information they’re forgetting could be valuable to them. The failure is due to anxiety about the threat and also due to a conscious intent to erase the information. It is motivated forgetting.
     Other examples include:
  • University students who read a critical article about their school become less likely to remember an accompanying ad describing discounts at the bookstore 
  • Regular patrons of a sports bar with decorations featuring a local team that’s doing poorly forget about a special promotion offered by the bar 
     On the other hand, if the consumer doesn’t perceive that the threat is coming from the retailer, the selling potential increases. Researchers at Duke University, Cornell University, and University of Waterloo discovered that when Americans felt their country was under verbal attack and was having trouble responding adequately, they became more likely to buy American.
     Study participants perceiving that America was being threatened were more likely to choose a Chevrolet than a Toyota, everything else being equal. They chose Nike over Adidas, even though they very well might not have been consciously thinking Adidas is based in Germany.

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

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Cancel Out Implications of Female Inferiority 
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Threaten Shoppers Craftily

Sunday, December 22, 2013

Jump the Cut Point Hurdle

What about fourth place? In Olympic competitions and horse races, we usually learn who came in first, second, and third, but beyond that, it’s a group of also-rans. The psychological distance between third and fourth is leagues larger than the psychological distance between second and third.
     In other types of ranking lists, there are also cut points. Actually, researchers at Seattle University and Rutgers University-Camden find that there are usually multiple cut points. On a “Top 50 Retailers” list, consumers are likely to see a bigger difference between ranks 10 and 11 than between ranks 9 and 10 and a bigger difference between ranks 25 and 26 than between ranks 24 and 25. The research indicates it would be worthwhile for a retailer to spend resources to jump a cut-point hurdle, but less likely to be cost-effective to move up without jumping a hurdle.
     However, moving from position 11 to 10 is likely to be noticeably tougher than moving from position 12 to 11 according to something called Zipf’s Law. The higher you get on the list, the more effort it takes to move up one notch further.
     There are cut points in retail pricing as well. The major example is the use of prices that end in a 99. $3.99 looks noticeably better to a shopper than does $4.00. $499.00 is better than $500.00 and will not be less attractive than $495.00.
     Still, there are exceptions. When quoting better-best alternatives to customers, say whole dollar amounts. If the items are priced at $29.99 and $39.99, say, “This one costs less than $30, and this one costs less than $40. Here are the extra benefits for the additional $10.”
     Also use whole dollar pricing for gift items, luxury items, and fun items.
     Yet, if you’re marketing a cut-rate store image, use odd-cents pricing, such as $8.37, to convey that you’ve pruned every last penny from the cost.
     In print, make a discount look more attractive by filling it with 1’s and 2’s. A discount from $222.99 to $211.99 looks more attractive than a discount from $199.99 to $188.99, although the second discount is actually a larger percentage of the regular price.
     However, if you are saying the price, “Seven dollars, sixty-six cents,” sounds like a better deal than, “Seven dollars, twenty-two cents.” The “s” sound in “sixty-six” implies “small” and “smooth,” while the “t” sound in “twenty-two” implies “tension.”

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

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Respect Zipf’s Law 
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Saturday, December 21, 2013

Monitor Variety Seeking

Whether a particular shopper seeks change from what she’s purchased before or chooses to stay with the tried-and-true has to do with the shopper’s personality structure and with the situation the shopper’s in. To increase the size of the sale to that shopper, monitor for variety seeking. It affects what you choose to show. 
     As it happens, it also affects the size and delay of payoffs the shopper desires. Researchers at Johns Hopkins University find that variety seekers are more likely than tried-and-truers to accept rewards which come later, as long as the rewards are sufficiently larger than those which come immediately.
     The research also indicates that a retailer can influence the degree of a shopper’s variety seeking. Most shoppers are tempted to switch what they buy for no reason other than that people enjoy variety. If you want to introduce the customer to a new brand, his interest in switching is fine. However, if the brand the customer has been buying delivers good value for him and high profits for you, I’d think you’d prefer to at least delay the brand switching, even if you can’t completely eliminate it.
     Research findings from Carnegie Mellon University, University of Minnesota, and New York University suggest that we can slow down switching by encouraging the variety-seeking customer to think about other alternatives they’ve already tried. If the shopper talks about purchasing a different brand “to break out of my routine,” ask, “What are some other brands you’ve used in the past, and what convinced you to start using our brand you’re using now?”
     If the customer is talking about holding off on a purchase so she can try out a store that opened recently in the area, ask, “What are some of the stores you’ve shopped at before or in addition to shopping here, and what about our store keeps you coming back?”
     We also can satisfy variety seeking by showing the shopper different ways to use the same items he’s been using up to now. A few years ago, a Poultry Consumer Trend Report concluded that 90% of Americans already eat poultry at least once each week. However, about 25% of chicken consumers said they’d be very likely to order chicken for breakfast if it was available.
     A relatively simple change in the circumstances under which you propose your product be used could add enough variety to prolong shopper interest.

Click below for more: 
Add Variety to Shoppers’ Thinking

Friday, December 20, 2013

Demonstrate Risky Consumption

Researchers at Indiana University showed to study participants depictions of indulgent foods. In some cases, it was the food by itself and, in the other cases, the food being consumed by a person who was similar to the study participant in some way. The study participants were afterwards asked to taste the food and rate the tastiness.
     Those who had seen the depiction of actual consumption rated the food as more tasty than did those who had seen the depiction of the food by itself. This difference did not appear when the food used in the depictions would be considered more healthy than indulgent.
     It was as if seeing a risky food being consumed by somebody else gave permission to enjoy a the food. In this case, the risk was physical. But the general principle of increasing enjoyment by demonstrating consumption holds for all sorts of risky items
  • Physical risk. “Is my health or safety or that of those I love in danger if I use this product or service?”
  • Financial risk. “Am I paying too much money?”
  • Time risk. “If I make this purchase, does it mean investing too much time for what I gain?”
  • Social risk. “If the people I admire know I’m using this product or service, am I in danger of falling out of favor with them?”
  • Psychological risk. “Does using this product or service conflict with the image I want to maintain of myself?”
  • Functional risk. “Will the product or service solve my problem or meet my needs effectively and efficiently?”
     When the experience of using a risky product is difficult to describe or demonstrate, allowing the shopper to sample constitutes a self-demonstration.
     Put the sampling station in a well-lit, interesting area of your store where a number of people can gather at the same time. We want shoppers to be attracted by seeing others sampling and then not feel crowded when doing the sampling. We want the shoppers to hang around long enough to get their questions answered by friendly staff who are handing out the samples.
     Then make it easy to buy the product by having the merchandise for purchase adjacent to the sampling station.
     Sampling a satisfying product at no cost builds the sort of gratitude which can result in the consumer buying not only more of the sampled product at the full price, but also other products from the merchant.

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Present Low-Risk Comparisons for the Nervous 
Label Freebies as Samples 
Use Synesthesia to Reinforce Store Image 
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Thursday, December 19, 2013

Satiate Hungers One Way or Another

When shoppers feel financially insecure, the decreased psychological power makes them want to chow down fattening foods. Researchers at Tilburg University and HEC Montréal found this to be true with measures of caloric desire and actual eating behavior.
     Marquee retailers may be onto something by including in their stores a restaurant with food which fits the personality of the merchandise and the location. Late last year, the flagship Tommy Bahama store in Manhattan started serving Macadamia-nut encrusted snapper for a tropical flavor and pineapple cheesecake in a bow to New York style. Urban Outfitters, with a college-town personality, is featuring striped bass at its Westport, Connecticut home-and-garden store.
     Sexual hungers, too, are associated with purchasing in direct and also indirect ways. 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 if ever given the opportunity. A matching group of men were asked to think about getting a haircut at the barber. Although we might consider the first group the fantasy condition and the second group the boring-life condition, the researchers were aiming for something else: They considered the first group as developing more of a mating goal than the second group.
     Once this difference was produced, all the men in both groups were asked to look at 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 measure any differences in amount of salivation.
     The men in the mating goal group salivated more when viewing the sports car images than did those in the haircut group. A mouth-watering sports car operates on the brain in the same sort of way as a mouth-watering food.
     As in the Tilburg/HEC studies, the effect is greatest for consumers who feel they have relatively low psychological power.
     Conversely, handling money can satiate a hunger for influence over circumstances. Psychologists at University of Minnesota, Florida State University, and China’s Sun Yat-Sen University had a group of study participants count out eighty $100 bills. A matching group were assigned to count out eighty blank pieces of paper. All participants were then exposed to tasks in which they experienced social rejection and physical stress.
     The people who had worked with the $100 bills reported less discomfort during and after the tasks.

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Feed Shoppers’ Hunger Consistently 
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Wednesday, December 18, 2013

Form Crowds into In-Groups

Many people find enjoyment in the busy bustle of holiday shopping. Being with others who are in a holiday mood gives a sense of community energy. But although these people love the bustle, they hate to be jostled. It’s the unwanted crowds which make a shopper abandon the store to finalize purchases online.
     Researchers at University of Kansas, University of Wisconsin–Madison, and University of Toronto explored the effects of crowding on consumer decision making. One major effect they uncovered was a retreat to safety. For instance, shoppers who encountered crowds of unfamiliar bodies preferred to shop for their headache relievers at a pharmacy than at a convenience store. In casinos, crowding moved typical gamblers toward less risky wagers.
     These findings contradict a phenomenon in psychology called “the risky shift.” First described by researchers at Massachusetts Institute of Technology, the risky shift refers to how groups of people make more extreme decisions than if those people acted individually. Being insulated from full responsibility by the group, members of a crowd can find themselves tempted to take potentially perilous chances.
     What separates the risky shift from a preference for safety is the feeling of familiarity of the crowd. In the Kansas/Wisconsin/Toronto studies, groups of in-store shoppers who viewed each other as sharing characteristics showed less fear of avoiding possible problems and more interest in exploring possibilities for gain.
     At your store, establish operating hours which spread out what would otherwise be uncomfortable crowding. Distribute highly popular items throughout the shopping area with clear signage and staff assistance to locate those items easily. Up the merchandise density for the holidays, but reserve enough spaces—such as pristine restrooms—to which shoppers can choose to retreat from crowds for a few minutes.
     At the same time, because having lots of people shopping with you is good and shopping excitement is contagious, help large groups find similarities with each other and, importantly, with your store staff.
     If shoppers will be waiting in line to enter the store or department for a special event, have store staff wearing name tags talk to the shoppers. Invite those in line to fill out a sweepstakes form with their name and other identifying information. Because they lose some of their individual identify and therefore their sense of individual responsibility, people in crowds are driven to actions they wouldn’t otherwise take. The name-to-name contact can head this off.

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Crack Ecommerce Brains for the Holidays 
Pay Your Dues, Then Do for Yourself 
Promote Supervision Which Prevents Problems 
Use Psychology for Shopper Crowd Management

Tuesday, December 17, 2013

Keep ’Em Down on the Firm

Are people more likely to buy self-enhancement products and services on the first floor of a store than on an upper floor? Studies at University of Wisconsin-Milwaukee, Baruch College, and Copenhagen Business School suggest this. When people even imagine moving upwards—such as on stairs or an elevator—their motivation to look or perform better decreases.
     The researchers noted that a history of laboratory experiments and anecdotal evidence shows how consumers subconsciously associate upward movements with positivity—such as high self-esteem—and downward movements with negativity. Using this, the researchers conducted a series of five studies in which they produced feelings of social confidence in people by having them vividly think about riding up on an elevator or taking off in an airplane.
     When then presented with challenging tasks, these people were less motivated to look good than were an equivalent group who hadn’t been asked to think up. Another group of people were instructed to imagine moving downwards, and they performed better on the subsequent tasks than did those not given the instructions.
     These findings might help explain why beauty products are most often sold on the ground floor of department stores. The Wisconsin/Baruch/Copenhagen research conclusions suggest you stock self-improvement items close to the store entrance. If a shopper has to exert an effort to get to the items, they may feel they’ve already moved sufficiently toward greatness.
     Other studies, too, have shown a relationship between physical movement and purchase intentions:
  • In a University of Amsterdam study, consumers who were induced to nod their head up and down afterwards thought more positively about purchase alternatives than those who had not done the nodding. This worked only with shoppers from cultures which associate nodding with agreement. With those shoppers, spiral in on the sale by asking the right questions and nodding your own head to generate feelings of yes. 
  • Researchers at Cornell University and University of Toronto suggest that when the shopper is feeling overwhelmed by a difficult decision, and you want to make the sale, you encourage the shopper to back off. Consumers were presented with two equally attractive products and invited to either choose one of the products right then or defer the decision. Next, some of the consumers were asked to lean in toward the item display. The others were asked to lean away. Those leaning in were more likely to ask to come back later. 
For your profitability: Sell Well: What Really Moves Your Shoppers

Click below for more: 
Start Your Shoppers Feeling Yes 
Lean Away from Big Fat Shopper Decisions 
Feather Your Shoppers with Light Thoughts 
Push Shopping Baskets’ Pull for Sweet Items 
Limit Mouth-Watering Evaluations

Monday, December 16, 2013

Sharpen Your Price Image

When Ford Motor Co. redesigned the Mustang to appeal to car shoppers worldwide, Jim Farley, Ford’s head of global marketing, said, “Launching Mustang globally is not about the people who buy it. It’s about the people who don’t…. The good feelings will make them more inclined to buy Fiestas and F-150s.” What Ford plans to sell internationally is not so much Mustangs as the Mustang image.
     Skilled retailers take a similar perspective when selling price image rather than price points. “Price image” is the general belief your target markets hold about the level of prices your store charges compared to what other stores charge for similar items. Some stores have a set of product line price images. “They’re high if you’re looking for meat or fish, but I find unusual bargains in the bakery in the early afternoon.”
     Some consumers seek the exclusivity of stores with an image of charging premium prices. But in general, consumers shop more often, buy a larger range of items, and buy larger quantities of each item at retailers with lower price images.
     In an extraordinarily through review of the consumer behavior research literature, marketing professors at Emory University and Northwestern University catalog the considerations which determine price image other than the actual prices on items. Here’s my version of that list:
  • Range of prices. The frequency with which the shopper sees low prices influences price image more than does the amounts by which prices are lower. Many consumers look at only three to five items before settling on a price image assessment. Retailers can take advantage of this fact by offering low prices on Known Value Items—the most popular categories, brands and/or package sizes. Some retailers call these “signpost items” 
  • Price-match guarantees. These cause an image of lower prices, even though few customers ever make use of the guarantees. 
  • Claims about price image. These claims could be in advertising or word-of-mouth. WOM claims by friends, family, and acknowledged experts do have greater influence than advertising. Still, don’t count out the power of repeated ad impressions. 
  • Store location and décor. Many consumers are happy to pay somewhat higher prices to guarantee a pleasant physical environment. 
  • Customer service quality. This includes factors such as the degree of promptness, courtesy, and accuracy in receiving assistance with purchases. Customers like service. Yet there’s a point at which customer service is so high as to lead shoppers to question the value they’d get from buying the merchandise. 
For your profitability: Sell Well: What Really Moves Your Shoppers

Click below for more: 
Guarantee with Care 
Accelerate Purchases with WOM 
Perpetuate Beautiful Days in Your Neighborhood 
Design Stores with Visual Aesthetics 
Meter Your Customer Service

Sunday, December 15, 2013

Border Shoppers’ Uncertainty

What’s the effect on store shopping of giving a customer a running total of purchase costs? A real-world answer comes from a study conducted in a set of Atlanta grocery stores using shopping carts containing a panel displaying that. This is one variant of what are being called “smart shopping carts.”
     The study was conducted by researchers affiliated with Cornell University, Georgia Institute of Technology, University of Groningen, Maastricht University, and Wageningen University. The results of using the smart carts were determined by whether the shopper was highly sensitive or not to staying within a budget. But this operated in a way you might not expect: Confronted with the running total, budget shoppers spent about 22% more than those without the smart cart, while non-budget shoppers spent about 19% less.
     This is an example of how consumers under normal shopping circumstances often appreciate having the retailer set limits that the consumers themselves have not set. The budget shoppers felt comfortable that they were in control, so they allowed themselves to spend more. On the other hand, the shoppers without a budget used the smart cart device to constrain themselves.
     In stressful circumstances, consumers’ desire for structure grows greater still. Researchers at University of Pennsylvania exposed study participants to loud sirens, bells, and alarms. Some of the participants were allowed control over the amount of the anxiety-producing noise, while the rest were not.
     Later, each of the participants was asked to express preferences between two sorts of items. Some of the items had borders; the others did not. For instance, the participant could choose a postcard to keep. The sole difference between the two cards was the thick border around one of the cards.
     Yes, the study participants who had been granted no control over the noise were more likely to select the postcard with the border around it. In subsequent experiments, people who felt little control preferred retail settings that the researchers report as being “highly bounded.”
     Here are a ways to fence in stress to make the shopping experience better for your customers:
  • Keep shelves orderly and fully faced. That’s like avoiding gaps in the fence. 
  • Unclutter aisles regularly. 
  • Wherever shoppers need to wait, make it abundantly clear who has what place in line. 
  • Remind customers of any time limits, and perhaps even establish time limits. “Please remember that this offer is good for the next three days.” 
Click below for more: 
Fence In Consumer Anxiety 
Influence Shopping List Behavior

Saturday, December 14, 2013

Seem Exploited, But Never the Exploiter

Consumers who are shopping for bargains get a bonus kick out of thinking they’ve misled a retailer.
     Researchers at University of Florida, Stanford University, and Columbia University compared the appeal to shoppers of two types of discount offers:
  • The retailer tells the shopper the offer has been specially designed to fit the shopper’s individual characteristics 
  • The offer fits the shopper’s individual characteristics, but the retailer doesn’t say this 
     Consumers expressed more joy about the second type and would be more likely to make the purchase. The reason, uncovered by the studies, was that the consumers believed they’d outsmarted the retailer. “I’ll bet the store didn’t realize I’d be willing to pay above the bargain price for this item because of how well it fits me.” How delicious to feel you’ve exploited an opportunity.
     Allow shoppers to think they’ve fooled you, but don’t be a fool. Always have in mind how sensitive shoppers are to signals that you’re putting one over on them. They know that retailers have the power to trick consumers into making decisions which profit the retailer, but are not in the best interests of the customer.
     Researchers at University of Central Florida-Orlando and Erasmus University in the Netherlands looked at this issue from the standpoint of what consumer psychologists call “biasing cues.” These are bits of information given by the retailer in a way which can mislead a customer. For instance, most of us carry around a price-quality bias. We tend to assume that if we pay more for something, it must be better. Yet, many lower-priced products are quite good and many higher-priced products are quite bad. If a retailer sets an exorbitant price solely to indicate higher product quality, that's a biasing cue.
     Using purchase decisions about orange juice, polo shirts, and paper towels, the researchers found that biasing cues could influence shoppers once. But the probability of fooling them again was pretty much gone after the purchaser actually tried out the product.
     How does this apply to the Florida/Stanford/Columbia discount types? When the retailer withheld information about the intent, or even existence, of the discount offer customization, was the retailer misleading the shoppers? I’d say no. The retailer didn’t lie. Unlike the situation with inferior orange juice, polo shirts, or paper towels at inflated prices, the retailer who withheld information did deliver on the promise of a bargain price for a desired item.

Click below for more: 
Intrigue, But Don’t Mislead 
Personalize Discount Coupons

Friday, December 13, 2013

Exude Conceptual Fluency in Services Retailing

When retailers sell services, the quality of the outcome counts. With house cleaning, financial planning, or any other services category, customers expect results. Still, as many consumer researchers have proven, customers also attend to the process through which the outcomes are achieved.
     The behavior of the personnel delivering the services communicates the degree of competence beyond what the outcome shows. Researchers at Northeastern University and Arizona State University say that when the services are delivered by the owner’s employees rather than by the owner herself, it’s essential that the employees are coached to understand, exemplify, and authentically project the brand image of the business.
     What’s called “conceptual fluency” is a key skill. When the employee is conceptually fluent, he repeatedly reminds the customer of that brand image. But the repetition must be creative. The retailer’s repetition works best if the service benefits, selling points, or usage instructions are presented in different ways. If your employees deliver an identical message again and again and again, the customer might come to believe it, but at some point, they also start disliking the provider. Consumer psychologists have a name for this one, too: Wear out.
     The brand images of successful services retailers will certainly encompass attentiveness, friendliness, and empathy toward the customers, and so it is these in which the employees should show high conceptual fluency. In fact, those three service relationship factors influence customer satisfaction to a greater extent than do service outcome factors, such how well the clothes dryer works after being repaired, if the cruise ship vacation met expectations, and even the extent of financial returns on investments.
     This is not to say that the outcomes of services are unimportant to consumers. But with many consumer services, it's difficult to tell how good the outcomes really are. The consumer pays for a lube and oil change on the family car, but how does she know if the extra-cost safety check was done properly? The patient is relieved that the dental work is over, but how can he know if things would have been less painful if he'd gone to a different dentist?
     Once your customers conclude that you’re a competent services provider, they usually prefer not to keep shopping around. The services provider is pleased to have the customer keep coming back, and the consumer is pleased to feel comfortable having a services provider to keep coming back to.

Click below for more: 
Impact Shoppers with Creative Repetition 
Emphasize Empathy in Providing Services 
Post Dramatic Tales for Post-Experience Goods

Thursday, December 12, 2013

Present Self-Gifting

As the holiday gift exchange began that evening, some of the children in our large gathering noticed a package more plainly wrapped than the others. The children looked at the gift tag and announced what it said. Since the gift was from a husband to the wife to whom he’d been married for many, many years, we were all confident the gift inside had been selected with careful consideration for the recipient. Indeed, when one of the children brought it to her, there was a wide smile on her face.
     It didn’t take at all long for her to pull away the wrapping paper to see what was inside, and therefore not at all long for her smile to change to a glower toward her husband as she pointed to the box. “An electronic denture cleaner? You’re giving me an electronic denture cleaner as my special gift here in front of our family?”
     That incident occurred too long ago for me to now get permission from the giver and the recipient of the gift to identify them to you, so I’ll say only that they qualify as highly beloved relatives.
     I thought again about the incident when reading a recent front page article in The New York Times in which Hilary Stout wonders at Macy’s featuring as their holiday “gift of the day” the Estée Lauder Anti-Wrinkle Essentials Value Set.
     The explanation is self-gifting—people purchasing presents for themselves along with shopping for others. Macy’s marketing messages also included, “This holiday season, get an unforgettable gift for a loved one (or yourself).”
     In your store, how about making it, “an unforgettable gift for a loved one and another for yourself”? Research at Stanford University and Yale University suggests this type of bundling will be most attractive to consumers when one of the pair is seen as serving a utilitarian purpose—satisfying the obligation of purchasing a gift for somebody else—and the other is seen as hedonic—giving oneself the pleasure of a personal acquisition.
     If I’d only known in advance of that holiday exchange long ago what the research would reveal, I might have adapted the tactic to head off trouble. “Make sure she understands that this fancy machine can be used to clean jewelry as well as dentures,” I’d have told the loving husband, “and then be sure to include a silver necklace in the gift box.”

Click below for more: 
Bundle Utility, Discount Hedonism 
Influence Who Uses Gift Cards

Wednesday, December 11, 2013

Sidestep Heuristics When Ethical

Consumers take decision making shortcuts. Researchers call these shortcuts “heuristics.” Most of the time, heuristics pay off for the consumer, since time is money. Still, some heuristics can mislead, and when the retailer knows about them, it can be unethical to allow them to continue.
     An example concerns package sizes. Researchers at Erasmus University and INSEAD found that shoppers estimate changes in the volume of a product container by roughly adding percentage changes in the height, width, and length. The accurate way to calculate the change in volume is to multiply the percentage changes in the three dimensions. That’s more complicated to do, so the shoppers take the mental shortcut.
     As a result, participants in a study failed to notice a 24% downsizing of the package when one dimension was increased to mask the decrease in overall volume. Astoundingly, this distorted perception held even when the study participants were instructed to closely attend to the package size and weighed the container.
     The ethical practice is for a retailer to clearly notify consumers of percentage changes in package size and any change in the per unit cost.
     Another example concerns habitual purchases. Researchers at University of Texas-Austin found that half of the number of laundry detergent shoppers take no more than nine seconds to select the product. We can figure that most of those seconds are spent in locating the product and lifting it into the cart. These speedy shoppers almost surely aren’t discussing their decision with a salesperson or with other customers.
     If the purchaser’s selection satisfies both her product performance objectives and our profit making objectives, we don’t need to do much. The consumer is on automatic. But if we believe the consumer would benefit by purchasing a new brand, the ethical alternative is to use pre-shopping advertising, store signage, product adjacencies, and very brief salesperson interactions to steer the consumer. Slow down the decision making process.
     And then there are times the proper action is to complicate choice just because it helps the consumer feel they’ve selected the least bad alternative. Researchers at University of Pennsylvania and Columbia University say this circumstance arises with purchase decisions the consumer considers as having potentially life-changing consequences and the alternatives are quite clear-cut. Some of these situations, such as buying a house, extend over time. Others, such as selecting funeral arrangements, could last no more than a day or two.

Click below for more: 
Utilize Unit Pricing 
Hitchhike onto Purchasers’ Shortcuts 
Try Out Dollar Over Percentage Discounts 
Complicate Life Decisions for the Concerned 
Trade Ethics with Consumers

Tuesday, December 10, 2013

Frame with Phrasing

People who have never before wagered online are more likely to start if told it’s “gaming” rather than “gambling,” according to studies at Northwestern University and Cornell University. Marijuana seems less legitimate when included with the names of hard drugs, while more legitimate when grouped with medical treatments. Botox seems less safe when shown on a list of poisons and more safe in the context of a menu of treatments such as skin peels.
     How we frame a single offering to shoppers significantly influences the item’s marketability. Moreover, researchers at Babson College and Western Kentucky University find that how we frame a comparison of a difference between items makes a difference.
     Our phrasing could be saying to the prospective customer, “The item I am suggesting to you is better than the alternative you’ve been considering.” Or our phrasing might be communicating, “The alternative you’ve been considering is not as good as the item I’m suggesting to you.” It’s a positive framing versus a negative framing.
  • When presented the comparison as a positive frame, shoppers tend to analyze the product features more carefully than when a negative frame is used. If your good reputation as a retailer has not been firmly established, you’re more likely to influence the shopper by using a positive instead of a negative framing. 
  • Negatively framed comparatives tend to make the shopper more skeptical of the retailer. The shopper starts thinking that the retailer is biased and is trying to manipulate him. These effects then spread in the shopper’s mind so that he might end up doubting and resisting other claims by the retailer. 
  • When presented the comparison as a negative frame rather than as a positive frame, shoppers become more likely to consider the quality of the store surroundings, how much expertise the salesperson seems to have, and how positive a mood they find themselves in. They’ll still look at the lists of features and compare the prices, but these will carry somewhat less importance when there has been negative framing. 
     Or we could say to the consumer, “What I’m suggesting to you is just as good as the alternative you’ve been considering. It’s not that one is better or one is worse.”
     Are there situations where this phrasing is best?
     Yes, say researchers from Indiana University, Northwestern University, and New York University. The situations are ones where the shopper believes the decision is risky.

Click below for more: 
Present Low-Risk Comparisons for the Nervous 
Combine Positive with Negative Comparatives

Monday, December 9, 2013

Journey Beyond Touchpoints

Store sales may include a set of touchpoints—significant interactions between the consumer and the retailer which occur at different times. In addition to the purchase transaction, there could be the delivery and installation, repairs under warranty, responding to post-purchase complaints, or trade-in on an updated model, for instance.
     Retailers often measure their success by looking at performance at each of the touchpoints. After analyzing alternatives to this approach, management consultants with McKinsey and Company recommend attention to what they call journeys—the total start-to-finish experience as a unit. In their studies, performance on journeys, compared to performance on touchpoints, was about 25% more strongly correlated with higher revenue, repeat purchasing, lower customer turnover, and positive word of mouth. Performing one point better on a ten-point scale of journey rating than did other businesses competing for the same consumer dollar ended up producing a revenue growth rate of at least two percentage points.
     The McKinsey consultants found that managing journeys is difficult when there are service silos, with separate staff engaging in different touchpoints and those different sets of staff coordinating poorly. This difficulty is more common in large retailing businesses than with the smaller retailer who has fewer staff and more overlapping duties. Even with the small to midsize retailer, though, better journeys result when staff discuss regular customers and keep notes on touchpoint episodes for reference later. Encourage cross training and employee collaboration.
     If you hand off a shopper during a journey, do it with care and caring. When the customer has a complaint which requires referral to a supervisor, does your employee describe the problem to the supervisor in a way which shows respect for the customer, even if your employee thinks the complaint is foolish?
     Whenever you think you’ve resolved a complaint, ask the customer, “Are you fully satisfied?” If she replies she is not, work to change the customer’s answer to yes. When you get the yes, say, “If you ever have a problem like this again, please be sure to let me know. Here is my business card.” Use “I,” “me,” and “my” instead of “our store.” Take personal responsibility.
     Then be sure all staff know that if a customer calls or comes in asking for an employee by name, staff either fetch the employee or say the person isn’t available now and add, “May I please see if I can help you?”

Click below for more: 
Hand Off Customers with Care and Caring 
Track the Trajectory of In-Store Impressions 
Get Second Chance for Good Impression

Sunday, December 8, 2013

Arrange to Save Your Shoppers

In your store, what’s the best way to arrange the item assortment within each product category? Researchers at University of Pittsburgh and University of Southern California say that the answer depends on what you want to accomplish. If you want to help your shoppers save money when meeting their needs, organize by benefits rather than by features.
     Consumers in the studies were asked to choose a nutrition bar from an assortment. For some of the participants, the items were organized by features, with separate sections for fruit bars and nut bars. For other participants, the items were organized by primary benefit, with separate sections for fat-burning and muscle-building.
     Those consumers facing the benefits arrangement were more likely to mentally place the items into homogeneous groups. This simplified the choice task, since they’d then be selecting from, let’s say, six groups instead of thirty different items. Making choices easier for shoppers is a good idea. It means the time in your store is less tedious, so it opens the opportunity for you to show the shopper other item categories.
     Yet, because the items within each group seemed quite similar, study participants in the benefit-arrangement condition were more likely than those in the features-arrangement condition to select on the basis of price. In most cases, this meant choosing the least expensive nutrition bar. That lowered the amount of the total sale, a fact which taken alone would make benefits-arrangement a poor retailing practice.
     However, customers who conclude that they’ve gotten a good deal are likely to return to shop with you again. It’s good business to arrange the merchandise in a way which helps your shoppers save.
     Why were the consumers in the benefit-arrangement condition more likely to place items into categories than those in the features-arrangement group? Because, although there are important exceptions to the rule, the rule is that people shop for benefits rather than for features.
     You do have other assortment alternatives. Arrange by brand when that’s an attribute significant to shoppers. All the Nike shoes together. With commodity items like toilet tissue for which many shoppers are price sensitive, arrange by price point.
     Or you could arrange items randomly. University of Pennsylvania and University of Illinois researchers claim this leads to more buying because it requires shoppers to run their eyes over all the choices. Of course, it also could irritate the devil out of your customers.

Click below for more: 
Feature Functions with Ugly Innovations 
Randomly Arrange Limited Product Sets

Saturday, December 7, 2013

Drive the Psychological Distance

The thinking and behavior of your store’s shoppers is influenced by the degree of psychological distance they experience. Psychological distance is higher when a consumer:
  • Believes he’ll need to travel a longer way to obtain the item 
  • Is selecting an item to be used in the future rather than now 
  • Is selecting an item for use by someone else rather than for her own use 
  • Considers returning or exchanging an item purchased by someone else rather than by himself 
     Among the frequent effects of greater psychological distance:
  • Emotional reactions to the item are less intense. According to studies at University of Colorado-Boulder, University of Oviedo in Spain, and Lieberman Research Worldwide, this is true for highly positive emotions—such as the thrill in having the item—and for highly negative emotions—such as anger at flawed product performance—and for all the emotions in-between. 
  • There’s a stronger link in the shopper’s mind between price and quality. Researchers at Hong Kong University of Science and Technology told study participants how much had been paid for a set of items—ranging from yogurt to computers—and then asked each participant to guess the quality of each item. In some cases, the study participant was to assume that she herself had made the purchase. In the other cases, the participant was to assume that a friend had made the purchase. With the purchases made by friends, there was a more direct relationship between the price paid and the assumed quality of the item. 
  • The consumer places relatively more importance on objectivity than on feelings. About one month prior to the graduation ceremony at a college, researchers at Columbia University and Singapore Management University described to groups of juniors and seniors at the college two sorts of apartments, then asked each of the students to say which apartment they’d prefer if actually renting it upon graduation. One was a small apartment attractively decorated, with pretty views out the windows. The other was a large apartment located close to activities the graduate enjoys. The college seniors were more likely to select the first alternative than were the college juniors, whose graduation was further in the future. In another set of studies, researchers at University of Mannheim saw how people were more willing to pay a premium price for a desired product if a purchase commitment was obtained well in advance of the product’s availability. 
For your profitability: Sell Well: What Really Moves Your Shoppers

Click below for more: 
Inject Distance for Price-Quality Link 
Accent the Emotions when Imminent Usage 
Commit Shoppers from a Distance for Expenses

Friday, December 6, 2013

Track the Trajectory of In-Store Impressions

Professional mystery shoppers make it a point to record separately their assessments of each encounter during each store visit. The greeting upon entering the shop might have been superb, but the wait to get help from a salesperson was excruciating, and the experience when paying for the merchandise was only acceptable.
     Typical shoppers don’t dissect their judgments in that way. Instead, they remember and talk about the visit as overall impressions. Researchers at University of Texas-San Antonio and University of Virginia find that those overall impressions are influenced by whether the shopper is accompanied by others.
  • Primacy. Shoppers in a group are greatly influenced by what happens early on. First impressions set the scene. The initial sights, sounds, and smells play an outsized role in the global opinions about shopping with you. 
  • Recency. Solo shoppers are greatly influenced by what happens to them in the store late in their visits. If customers are asked afterwards by their friends, family, or survey researchers to recall their experiences in your store, the memories most likely to bubble up to the top are about the interactions which occurred when they were paying for their purchases, exiting the store, or finding the car in the parking lot. 
     Primacy and recency effects occur for all visitors to your store. But whether the shopper was accompanied by others influences the shopper’s interpretation and memory of the trajectory.
     Researchers at University of Miami and University of Southern California explored two additional determinants of overall impressions:
  • Similarity. How do consumers infer the quality of service in settings like hotels. What’s the effect of flawed service at the front desk on the guest’s expectations when she considers using the hotel’s tour arrangements? The Miami/USC researchers found that if the guest sees the same manager talking to the front desk and the concierge, the guest becomes more likely to conclude that what holds true for one holds true for the other. The similarity principle also applies when it comes to employee dress. If your personnel dress in a distinctive store outfit, the impact of spreading impressions is greater. 
  • Contiguity. The Miami/USC researchers found that if two staff members work physically close to each other, the consumer generalizes impressions from one to the other more strongly. This also applies to contiguity in time, when the interactions with one staff member come soon after prior interactions with the other staff member. 
Click below for more: 
Stress the Impact of Spreading Impressions 
Pair Preferences with the Shopper’s Entourage

Thursday, December 5, 2013

Root Through the Trailer Trash

Many shoppers aspire to have possessions and use services associated with higher social classes than they themselves are in. At the same time, there is what consumer researchers call “parody display,” in which shoppers find fun in slumming, by incorporating into their lives merchandise and experiences associated with lower social classes than they themselves are in.
     Research findings from Virginia Tech and Ozyegin University remind us that selling opportunities can also be inspired from the relations among segments within a social class. The researchers identified five segments within what some might call trailer trash.
     That’s generally considered an insulting name for low-income trailer park residents. Yet, say the researchers, these consumers are by no means all alike. Here are the names used by the researchers along with my profile including suggestions for retailing to each segment:
  • Community Builders. These are the sociable, collaborative optimists. They enjoy having neighbors a literal stone’s throw away, although they’re unlikely to throw stones even at a disagreeable neighbor. The Community Builders are periodically in the market for party supplies. They also can be good resources for distributing to other trailer park residents news about good stores to shop at. 
  • Nesters. These residents admire hard work and discipline. They maintain their mobile homes well and take pride both in the appearance of the trailer and in their abilities to live economically. They’re good customers for items to dress up their homes in quality, but they want to be sure they’re getting full value for their money. 
  • Homesteaders. They accept the need to live in a trailer park, perhaps for economic reasons, perhaps because of limited mobility, perhaps for another reason. They are reluctant to leave the confines of the trailer park because it’s familiar to them. The do make use of opportunities, though. They’re receptive to sales by vendors who come to them. At retail stores, they’re bargain hunters. 
  • Reluctant Emigrants. They’re ashamed of living in a trailer park, seeing it as evidence that their lives are getting progressively worse. They’d hesitate giving their home address to a retailer, preferring to pick up large purchases rather than arrange for delivery. 
  • Outsiders. These are the rascals of the realm. They have limited interest in creating or maintaining a broad, inclusive community within the trailer park. Because they break the rules and seek thrills, they might not be around long enough to become good retailer customers. 
Click below for more: 
Plumb for Consumers’ Desire to Slum 
Ask “Whither Art Thou Helping?” 
Resolve Conflicts with Attention to Style 
Steal Attention with Rascal Appeal

Wednesday, December 4, 2013

Educate Consumers Prior to Mobile Ads

Why are mobile device banner ads directed to washing machine shoppers more effective than those directed to candy bar shoppers? Two reasons, say researchers at University of Pittsburgh, Columbia University, and INSEAD:
  • Mobile ads do better for functional items than for pleasure-oriented items. A washing machine is utilitarian. A candy bar’s hedonic. 
  • If the shopper cares a great deal about the purchase, a mobile ad will be more effective. Washing machine shoppers place greater importance on selecting the ideal item than do those about to select a confection. 
     When the item being advertised had both characteristics, the ad increased purchase intention by nearly 7% compared to when the item had neither characteristic. A gain of 7% from a single banner ad on a small screen is impressive. So is the database on which the researchers based their conclusions—the reactions of about 40,000 U.S. consumers to 54 mobile display ads for items from 13 different retail segments, ranging from consumer packaged goods to autos to financial services.
     The mobile device ad best serves as a memory prompt for information the consumer has already analyzed intellectually. This doesn’t mean the banner ad is stimulating intellectual processing. On the contrary, these ads are more effective because the rational analysis has already been completed in advance, allowing the ad to appeal to emotions. That’s the realm in which decisions are made when the shopper is coming close to selecting and purchasing.
     Personal relevance of the mobile device ad is important not only for making the sale, but also for not losing the shopper. As a rule, people hate banner ads. In a study last year, sponsored by Upstream and conducted by YouGov, about 70% of American consumers and 80% of UK consumers said they find banner advertisements on their mobile devices to be irritating. About two-thirds of the YouGov respondents said they’re getting too many ads and promotions on their mobile devices.
     At the same time, a slightly higher percentage said they wouldn’t mind getting more of the right kinds of ads. What’s “right”?
  • 26% want the mobile device ads tailored to their personal interests 
  • 21% want the ads to take account of what the user is doing at the time 
  • 19% want the ads to be specific to their geographical location 
     Consumers consider interactions with their mobile devices, especially mobile phones, to be more personal than interactions with other internet paraphernalia.

Click below for more: 
Talk to the Handheld with Restraint 
Accent the Emotions when Imminent Usage

Tuesday, December 3, 2013

Check for Unintended Consequences

To reduce paper towel waste, the retailer placed a recycling bin under the dispenser. The result: People did make use of the bin, but the average daily use of paper towels increased. Apparently, store shoppers figured it did no harm to use more.
     Researchers at Washington State University-Tri-Cities and China’s Tsinghua University saw the same phenomenon in their studies. In another example, the researchers asked participants to evaluate the quality of a pair of scissors. Some of the participants were told the paper they used in their scissor testing would be recycled. The other participants were not told this. Those given the recycling option used more paper.
     A method to reduce paper waste ended up increasing paper consumption.
     Researchers at University of Pennsylvania, University of Florida, and University of North Carolina-Chapel Hill saw other possibilities of unintended consequences in remedy marketing. The availability of smoking cessation programs can lead to people smoking more, since the people get the impression they can stop anytime they choose to. Once a consumer has gone through a debt consolidation program, that consumer may become more likely to spend irresponsibly, since the consumer figures he can go through a debt consolidation program again.
     The people most likely to be damaged by the ready availability of the remedies are those who are most strongly attracted to the risky behavior. The habitual smokers or those who fight temptations to spend money even when they’re having trouble paying bills.
     Psychologists at University of Minnesota and Texas A&M University point out your monitoring for unintended consequences may not be as straightforward as it seems. First is the matter of maintaining rapport with your past customers in ways which will allow you to check on them. Another difficulty is that monitoring requires focusing on the here-and-now, and the here-and-now includes all the incoming demands on the retailer’s resources. Getting the shelves stocked now, paying the pressing bills before the mail pickup, resolving the argument before things get really ugly. This pulls our thinking away from the longer-term perspective.
     And there’s even one more wrinkle: The psychological research says that when retailers carefully monitor results toward achieving long-term goals they’ve set, one consequence is that time seems to pass more slowly for the retailers. That, in turn, makes the goal seem more distant. Ironically, then, monitoring our achievements so far can actually interfere with what gets measured ending up getting done.

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Monitor Your Progress Toward Objectives

Monday, December 2, 2013

Put It to People to Put It in Writing

During the item selection process, there’s much to be said for allowing shoppers to say much. The oral expressions allow you to adjust your guidance to take account of the shopper’s characteristics, preferences, and any misunderstandings.
     However, once the shopper is ready to become a purchaser, there are advantages to getting it in writing. Research findings from University of Pennsylvania indicate that, compared to oral communication, consumers’ written expressions are usually richer in information valuable to a retailer. The researchers identified two interrelated reasons for this:
  • It takes longer to write than to speak so the person has more time to consider what’s being expressed 
  • People feel more responsible for what they write than for what they say, so they aim to give more interesting tidbits. 
     This argues for you encouraging customers to spread praise for your store in writing. It also argues for you exercising caution when surveying shoppers. The results you get in an interview will be of a different sort than the results you get on a written form. In this case, the oral won’t necessarily be better. Skilled interviewers can ask followup questions to probe and clarify. Moreover, studies at Duke University and London Business School indicate that speaking an attitude activates a different representation in the consumer’s mind than does writing an attitude.
     When you do ask people to put it in writing, you can up the sense of responsibility by asking for a signature. As University of Alberta researchers point out, the act of writing our signature has more than legal implications. The act is tied to our psychological identity.
     In one project, some of the participants were asked to print their name as part of a task, while the rest were asked to write their signature. Then each of the study participants was asked to shop for a pair of running shoes while the researchers watched.
     Among participants who considered running an important component of their self-identity, those who had written their signature ended up spending more time in the store and trying on more shoes than those who had been asked to print their name. People who spend more time in your store are likely to see more items to buy. Signing the name accomplishes this by strengthening an association between the customer’s self-identity and the personality of the store. As a result, we’d also expect to see more repeat business.

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

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Sign Up Customers for Store-Self Identity 
Accelerate Purchases with WOM