Monday, January 27, 2014

Shorten the Term of Retail Therapy

Why does retail therapy—the intentional use of shopping by people who are feeling sad in order to improve their mood—work?
     Researchers at University of Michigan say the mechanism of action is restoration of control. Sadness generally arises from perceptions that situations are controlling one’s life. Deciding to go shopping and then doing it verifies to the person that they can assert themselves in the face of difficult situations. Making choices during the trip is another signal of being in control.
     Other research suggests related explanations for the documented success of retail therapy. Rubbing elbows with other shoppers meets the need not be alone in the world. Solicitous store staff jack up our sense of importance. Spending money bestows mastery.
     The Michigan research findings sharpen the case by showing why retail therapy works to ease sadness, but not anger. Anger arises from perceptions that certain other people, not situational forces, are blocking our fulfillment.
     Older research from University of California-Riverside, Columbia University, and Harvard University had also found greater effectiveness with sadness than with anger or fear. That research also discovered how consumers engaging in retail therapy want quick payoffs, even if this means forgoing substantially larger payoffs later. The impatient preference for the quicker, less valuable isn’t nearly as strong with other negative emotions.
     Sad consumers created arguments to justify to themselves a choice which was, from the perspective of rational economics, inferior. For example, preferring $37 today to waiting three months for $85.
  • Present sad shoppers with alternatives. Then guide the shopper through the choice process so there’s prompt progress. Effective retail therapy includes both choices and quick payoffs. 
  • Guide sad shoppers toward items which are easy to start using and in which the benefits of use are easily recognized. These might be alternatives a regular shopper with you is unaccustomed to considering. Researchers at National Central University and Hungkuang University in Taiwan find that sadness tends to lead to variety seeking. 
  • With items you’re wanting to sell to sad shoppers, emphasize the feasibility of the purchase over the long-term advantages of the purchase. 
  • Follow up with sad shoppers, such as inviting them to return to your store to say how the purchase worked out. Then use the follow-ups to assess if the sadness has eased, and when it has, to consider upgrading the purchase to what might better serve the longer-term interests of the customer. 
Click below for more: 
Satisfy Sad Shoppers with Prompt Rewards 
Give Shoppers Variety for Control

Monday, January 20, 2014

Clean Up By Cleaning Up

After watching a film portraying incest, your shoppers will drink less chocolate milk than will your shoppers who watched a less morally offensive film. The choking off of chocolate milk consumption also happens if you ask shoppers to think about instances of fraud or cheating.
     The researchers at University of Pennsylvania, University of Colorado-Boulder, Duke University, and Fundação Getúlio Vargas looked at consumption of chocolate milk and water, but they say their conclusions apply to all sorts of eating and drinking. When people are morally disgusted, the disgust generalizes psychologically so that the people are less interested in buying foods and beverages.
     But since I don’t expect you’ll be showing flicks on incest, fraud, or cheating real often in your store, what does this mean for you?
     It means that it’s worthwhile to keep your store morally as well as physically clean.
     Other research finds that the principle holds even with less outrageous transgressions: Do it as gently as possible while still making your point, but whenever a shopper violates the norms of courteous store behavior in front of other shoppers, clearly call out the offense and offender. Researchers at University of British Columbia and University of Alberta find that unless you do the scolding yourself, the other shoppers may do it, leading to problems.
     Too often, people will cut in front of others who are waiting in a checkout line, ravage the tray of free samples so that none of the good ones are left for others, or unnecessarily create a huge mess at a merchandise display. The British Columbia/Alberta researchers saw that other shoppers who witness this happening are tempted to punish the offender. The observers do fear embarrassing themselves, but also have trouble looking the other way.
     This is to your disadvantage as a retailer because the mental turmoil inside the heads of these shoppers preoccupies their thinking, and preoccupied consumers generally buy less. Worse yet is if the miscreant bounces from one offensive behavior to another as shoppers watch.
     Also worse is if the store is physically disgusting. In a Morpace Omnibus consumer survey, over half the number of respondents said they’ve avoided a business because it looked dirty from the outside. Of customers who shopped at a store a single time and did not return, more than one-third said a reason was that when the customer entered, they found the premises to be dirty.

Click below for more: 
Scold Misbehaving Shoppers Publicly 
Keep It Clean 
Set the Moral Tone Which Fits

Monday, January 13, 2014

Encourage Responsible Debt at Life Changes

Taking on debt can enhance not only creditworthiness when requesting a loan, but also creditworthiness as a person, according to researchers at New Zealand’s University of Otago. During life changes—such as leaving home to go out on one’s own—consumers take on debt as a way to establish an identity. Part of this occurs because debt lets the consumer buy material possessions, and what we own becomes both a cause and an effect of how we view ourselves as well as how others view us. But it’s also true that just taking on the debt, regardless of what it’s for, bestows self-esteem.
     “Getting into debt is the American way” was the prevailing opinion among a group of white, middle-class Americans selected and interviewed in depth by consumer researchers from Oregon State University and France’s École des Hautes Études Commerciales du Nord. By “the American way,” the respondents initially explained that buying on credit was extremely common. The one white, middle-class American who said she avoided credit went on to add that her un-American habits resulted in her being unable to get a mobile phone and experiencing endless troubles while traveling without a credit card.
     Yet there was more to it: Taking on debt is patriotic, some said. It’s necessary for Americans to do it in order to keep the economy rolling.
     On the other hand, we’d like our target consumers to be in good financial health. Threats to that health are more common during periods of life changes, such as starting college, college graduation, getting married or divorced, having a first child, changing careers, and locating in a new country or culture.
     After the consumers’ changes, let them live long and prosper. And spend their years and money shopping with us. Let them go with the flow.
     Or more precisely, the flow state. Psychologists talk of a “flow state” in which a person who makes a consumer decision then becomes more likely to make another similar decision and then another.
     Researchers at Northwestern University analyzed flow states in people trying to erase debt. The researchers found that a good predictor of the consumer’s success was the number of credit accounts closed toward the start of the debt elimination program. The dollar balance of the credit accounts closed at the start was not a good predictor of success. It was the momentum of closing accounts which made a difference.

Click below for more: 
Lend a Friendly Ear to Loan Debtors 
Pledge Allegiance to Patriotic Consumers 
Educate During Life Changes 
Flow Consumers Into Good Financial Habits 
Check for Unintended Consequences

Monday, January 6, 2014

Size Up the Change from Wish to Worry

When a consumer is attracted to an item, this attraction distorts the consumer’s perception of the item’s size. A classic finding in psychology is that the person who wishes to have the item will perceive the item to be larger than does the person with neutral feelings toward the item. Researchers at University of Chicago and Chinese University of Hong Kong use the example of a cake: The consumer who wants to eat a piece of cake sees the piece as larger.
     That research team also augmented the classic research finding: After the person has the cake, they’ll see it as smaller, no longer as larger, than does the neutral observer. Wish turns to worry as the consumer wonders if the piece of cake really will be sufficiently satisfying.
     This progression is a signal to the smart retailer that the customer is open to buying more cake immediately following the purchase.
     There’s an interaction between desire and ownership. In one study, thirsty consumers estimated a given quantity of beverage to be greater than did those who were not thirsty if told the water was for another person. However, if told the water was for their own consumption, thirsty consumers estimated the quantity to be less than did those not thirsty.
     Also involved in the interaction is desirability. A larger piece of cake and a larger quantity of beverage are desirable to the hungry and thirsty. But sometimes, less is more desirable. In another study, estimates of a rope’s thickness were affected by whether it was identified as to be used for rock climbing—thick is better—or jump roping—thick is worse. As another example, if the customer will need to carry the merchandise, smaller rather than larger numbers are better. Before merchandise acquisition, the weight will be underestimated, and after acquisition, it will be overestimated.
     There are certainly other influences on estimates. Showing a product on the right-hand side increases average estimates of package size, warranty length, and other quantitative attributes. Why? Researchers at Chinese University of Hong Kong found two related explanations:
  • Consumers familiar with the labeling on tape measures and graphs assume that numbers appearing to the right are of a higher magnitude than those appearing to the left. 
  • Those in cultures which read from left to right mentally process items to the right later than the left, so will associate a higher number with it. 
Click below for more: 
Assume Higher Anchors for Right-Side Items 
Enlarge Influence with Contagion 
Placate Lighter Diners with Smaller Plates