Thursday, December 31, 2015

Use Premium House Brands to Brag Green

Many retailers adopt environmentally-friendly practices in hopes of achieving business advantages. But going green will lead to misunderstandings with your customers if you expect too much from them. Your shoppers want to look and feel environmentally conscientious. Still, when it comes down to it, they prefer the appearance over the sacrifice necessary to truly do the deeds.
     So give them the store appearance. Researchers at Catholic University of Pusan and Pusan National University found that in-store visual merchandising themed around eco-friendliness increases positive attitudes toward the retailer. The mechanism behind the effect is shoppers’ better feelings about themselves and more confidence in how people around them in the store will judge them.
     A particularly influential channel for accomplishing this is the private label, house brand items you carry. More specifically, the premium versions of those house brands. Researchers at Concordia University evaluated the effects of the retailer’s attention to social and environmental issues on attitudes toward a range of products on store shelves. The outcome was that the attention was most helpful with private label brands which shoppers considered as being of high quality. The cue for high quality was most often a relatively high price.
     Consumers think differently about private label, house brands than national label brands. Researchers at Monash University explored the situation in which a retailer introduces a value version of a house brand to add to a premium version on the shelves. Here’s what happens:
  • Prior to introduction of the value version, the premium version is likely to be considered by consumers to be of standard, not premium, quality. 
  • After introduction of the value version, consumers’ quality assessments of the premium version increase. 
  • If a premium version is introduced to an existing value version, the assessment of the value version doesn’t change noticeably. 
  • Consumers’ perceptions of product quality vary directly with the price they expect to pay for the house branded item. 
     On the other hand, researchers at Miami University and France’s ESSEC Business School found that addition on store shelves of a value version to a premium version of a national label product leads to lower quality ratings of the premium version. Examples included the introduction by Charmin of a lower-quality Charmin Basic product and Foster’s Beer producing a lower-quality Foster’s Grog.
     Why the difference between house brands and national label brands? Much of it is due to heavy manufacturer advertising for the nationals.

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

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Monday, December 28, 2015

Return to Reconsider Your Return Policy

Retailers offering and publicizing lenient return policies tend to profit. The gains from additional purchases outweigh the losses from additional merchandise returns.
     That’s been verified by many consumer behavior studies. But researchers at University of Texas-Arlington and University of Texas-Dallas wondered which characteristics of the return policies made the most difference. They reviewed twenty-one prior papers on the topic. Here’s my version of what they found:
  • Policies that appear simple to the shopper and offer money or monetary credit for the return have the greatest effect on increasing subsequent purchases. 
  • Policies that are offer exchanges rather than money or monetary credit reduce the rates of return. 
  • Return rates are greater for retailers who are lenient about the time by which a return must be made or about allowable reasons for the return. 
     The chief takeaway is to keep it simple.
  • Yes, you're posting the return policy. But if customers are in line at a returns desk, can they easily see the policy while waiting? A printed notice isn't as good as a wall posting. Consumers often don't pay attention to what return policies are until they bring in an item. If they're returning a gift, they might not be familiar with your store at all. Can't fit the returns policy onto a posting on the wall? Make a note to simplify the policy soon. How frustrating to a customer to wait in line to make a return only to be surprised to learn the return won't be accepted! 
  • Yes, you've trained staff on all the terms of the return policy. But can staff members keep their explanations to irritated customers brief? Staff members who are flustered often resort to reciting too much of the policy instead of explaining in plain language only the specific part of the policy that applies. 
  • Yes, you know that asking each customer the reason for the return is a good way both to improve your inventory and to curb fraud. But are you training and coaching your staff to make this a service-oriented inquiry, not an inquisition? Keep questions brief. If a customer asks, "Why do you need to know this?," reply, “I realize it’s a bother to you to have to return merchandise you’ve bought from us. I want to be sure we deal with suppliers who will provide you, your family, and your friends with reliable products the first time, every time.” 
For your profitability: Sell Well: What Really Moves Your Shoppers

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Thursday, December 24, 2015

Rough Up Customers a Bit

A few rough spots in an otherwise smooth shopping experience increase customer tolerance for the inevitable shortfalls. Rough spots, I mean, for the haptic sense—the sense of touch, according to researchers at Drexel University, University of British Columbia, and Cheung Kong Graduate School of Business. They found that consumers feeling rough surfaces became more empathic toward others than did an equivalent set of consumers feeling smooth surfaces.
     Empathy in the direction of retailer to shopper is important. It, along with the related traits of attentiveness and friendliness, influenced customer satisfaction to a greater extent than did service outcome factors in studies from Chinese University of Hong Kong and Fudan University in China. Those outcome factors included how well a clothes dryer worked after being repaired, if the cruise ship vacation met expectations, and even the extent of financial returns on investments.
     Empathy by shoppers toward the retailer is also useful. Consider the finding by Bayer Healthcare, Columbia University, and Maastricht University researchers that placing a mirror behind the places where a retailer accepts complaints reduces the intensity of customers’ dissatisfaction. When a consumer sees an image of herself, her self-awareness increases. She, consciously or unconsciously, considers what part she may have played in the unsatisfactory experience. She realizes she and the retailer are in this together. Empathy.
     Installing mirrors in your store would seem easier than ensuring each customer runs their hands over sandpaper, let’s say. In addition, people differ in their receptiveness to haptic cues, and some shoppers would be repelled by physically abrasive surfaces. So it might be best to interpret the “rough surface” findings metaphorically: Shoppers who encounter a little difficulty in an otherwise smooth shopping experience often develop increased commitment to the retailer.
     Researchers at University of Chicago found that shoppers who characterized themselves as “smart” rather than “not smart” expressed a higher preference for products they’d have to travel across town to get over equivalent products they could purchase nearby. These shoppers also evaluated products more positively when the products had been pushed back on the shelves rather than being in easy reach.
     A parallel effect occurs in collecting donations. People who described themselves as “pioneers” dropped higher amounts of money into a charity box when they had to stretch four feet to make the contribution rather than just drop it in without stretching. This difference did not appear among people describing themselves as “followers.”

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

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Monday, December 21, 2015

Ally with Alliteration

Which of these fetches the most favor from folks seeking a flapjack flavor?
  • 4 Pancakes: $3.87 
  • 4 Pancakes: $4.13 
  • 4 Flapjacks: $3.87 
  • 4 Flapjacks: $4.13 
     Hints to the correct answer are in the title and first sentence of this post.
     That correct answer is the last of the alternatives. I’ve listed the four alternatives in order from least to most compelling to consumers.
     Researchers at University of Miami, Virginia Tech, and Baruch College say the explanation lies in alliteration—the use of the same initial sound in words within the same group. The three “f” sounds in that fourth choice lead to positive evaluations because the similarity of the sounds makes the phrasing seem more familiar; what is familiar is easier for the brain to process; and what’s easier for the brain to process is liked more, everything else being equal.
     Among the most familiar words to our brain are those in our name. A set of studies at Clark University and Babson College found that when an item’s price resembles the sound of the shopper’s name or birthdate, the shopper will like the price better. A price of fifty-five dollars has extra appeal for consumers named Fred or Ms. Fine. A price of $49.15 has extra appeal for a consumer born on 9/15 or even 4/15.
     In some circumstances, this means the shopper will prefer that price to a lower price which sounds nothing like the shopper’s identifying information. Similarly, the Miami/Virginia/Baruch researchers discovered that “Two T-shirts $21” received more positive evaluations from consumers than did the better bargain “Two T-shirts $19.” This finding was especially impressive because prices ending in 9 usually carry an extra oomph for shoppers.
     Alliteration creates a rhythm that can drum the sales message into the prospect’s head. In fact, advertising professionals call the tactics “drumbeats.” Notice how the first sentence in this post uses not just alliteration, but also the drumbeat rhythm of rhyme.
     Rhythmic elements build credibility. Psychologists at Lafayette College found that rhythmically rhyming claims are more likely to be perceived as true than those which do not have this attribute. Any Southern Baptist minister and most campaigning politicians could have told the scientists the value of rhyming jingles. The rhythm soothes our defenses, and the repetition of sounds lends the sort of familiarity we associate with truth.
     Also, drumbeats energize us, and energy gives us the perception of success.

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

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Thursday, December 17, 2015

Reap Loads from Solo

Shoppers are going solo. Households are getting smaller as more people choose to remain single or are living alone in their senior citizen years. Sociological studies document drops in people’s reports of having truly close friends and of active membership in organizations not related to work. Anecdotal reports suggest that, because of dual careers, couples are making more purchase decisions on their own.
     Or maybe shoppers are not ending up going solo. Going to concerts, bowling alleys, museums, restaurants, and movies, that is. Researchers at University of Maryland and Georgetown University say there are two reasons:
  • People think the activity wouldn’t be as much fun if done alone than if done with a companion. Conversations during a visit to an art gallery enrich the experience. A little competition on the miniature golf course is energizing. 
  • People are concerned that others at the activity would judge them negatively if they come alone. There’s evidence that the larger the expected number of others in attendance, the greater the solo’s inhibition about participating. 
     Both these reasons operate more strongly with hedonic—pleasure-oriented—activities like going to the movies—than with utilitarian activities like grocery shopping. The research findings also indicate consumers worry excessively that coming to an activity solo will severely impact enjoyment. Therefore, if retailers can convince these consumers to give it a try, there’s the clear potential for high customer satisfaction:
  • Develop utilitarian—task-oriented—angles on hedonic activities. For instance, give an incentive to the solo for attending each concert during a season or having ordered each appetizer on the restaurant menu. 
  • Openly welcome individual attendees, such as reserving seating for people arriving alone and areas in stores for conversation about the merchandise. 
     The second of these could encourage matchmaking for subsequent visits. That’s good. When people shop with a companion, each person’s cart tends to ring up a higher total than if those same people had shopped alone. They are more likely to make what we think of as impulse purchases. Consumers in groups become more willing to take on risks, and it is the fear of risks behind much of resistances to buying.
     Matchmaking also potentiates repeat business. Researchers at American University, University of Arizona, and Northwestern University find that one major reason consumers will revisit the already done is that they enjoy being there while a new friend encounters a movie or destination for the first time.

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

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Monday, December 14, 2015

Look Lively!

Shoppers like stimulation. We know this. So what's the added value from the research finding that video portrayals of items in retail ads sell better than still photos? Well, the Babson College and University of Miami study increased the usefulness by saying the dynamic portrayal advantage works most strongly with hedonic—pleasure-oriented—products and services. Product preferences and willingness to pay a higher price both go up.
     The research also found how the increment has a shelf life. That is, if the consumer sees a video presentation for one item, the bigger interest level carries over to the next item advertised, whether or not it’s presented with a video or a still picture. Therefore, you don’t need to spring for videos throughout. A combination of video and still can work fine.
     In fact, it probably works better. Overstimulation distracts people from making purchases. Loud sounds, such as might be found in video ads, cause us to tighten our muscles, and as research from National University of Singapore and University of Chicago confirms, tense muscles keep people from being sold what they’re not fully convinced they want.
     Findings from State University of New York-Buffalo indicate that as a video ad progresses, you can safely introduce greater levels of movement. Viewers adapt to the energy. This set of studies also adds to the advice about the ads: The benefits of liveliness are greatest for items that are extensions of what’s already familiar to the viewer. If the stretch is too great, such as introducing a radically innovative product, there’s the risk of the kinetic energy in the ad distracting from what’s needed to understand the novel item.
     For face-to-face selling, dynamism helps, too. After making the same sales presentation hundreds of times, you and your staff may start sounding as if you’re delivering a news report devoid of passion. Remember to keep it exciting.
     You also can improve sales by having the shopper move. In a University of Amsterdam study, consumers who were induced to nod their head up and down then afterwards thought more positively about purchase alternatives than those who hadn’t nodded.
     Stanford University researchers point out successes in getting customers to make purchases by having text—such as on signage and packaging—set in narrow adjacent columns. The reason this works: In order to read the text, a shopper needs to slowly nod their head up and down.

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

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Thursday, December 10, 2015

Accept the OOS Redirection Exception

A number of consumer behavior researchers would recommend that if your shopper learns you’re out-of-stock (OOS) on a specific item the shopper has an emotional investment in purchasing, you should prepare to steer the shopper toward a wholly different product category than the one they came in for. The objective is to avoid a customer feeling they’re settling for second best.
     But studies at University of California-Riverside and Nanjing University find an exception to this general rule for shoppers who have a certain sequence of attitudes during the transaction:
  • They learn the desired item is OOS principally because of high demand for the item
  • They come to believe others have more expertise than they do about important item features in that category
  • They come to believe that the item is in high demand because of those features
     In these circumstances, the shopper will be pleased with an in-stock item which has those features, whether or not the item is in the same product category as the OOS item. The shopper is less likely to feel they’ve settled for an inferior choice and more likely to conclude they’ve made a useful discovery.
     Because these attitudes arise during the transaction, you might be able to influence them:
  • If the item is OOS because you didn’t place a timely order, the supplier had production problems, or there were shipping delays, you could explain this as a failure to anticipate the high demand rather than as a logistical problem.
  • By demonstrating your own expertise about your store’s products, you build the shopper’s trust that you know what the important features in the particular item category are.
     You’ll be keeping the OOS from turning to your disadvantage. Research findings from Indiana University-Bloomington, University of British Columbia, and Northwestern University provide other tips:
  • Loyal customers who encounter an OOS become more likely to come to your store promptly when sales on other high-demand items are announced. Coach your store staff to sincerely empathize with the shopper and tell the shopper when the next shipments are due.
  • For consumers who purchase a particular item at regular intervals, encountering an OOS repeatedly will lead the consumer to reconsider item preferences. When an item is OOS in your store, use signage to suggest an alternative which you do currently have in stock.
  • To lessen negative feelings, offer alternatives to an OOS item at a range of price points.
For your profitability: Sell Well: What Really Moves Your Shoppers

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Monday, December 7, 2015

Toss Positive with Heavy Abusers

If your target audience consists of consumers engaging in bad behaviors, the messages which best build interest in behavior change are different for heavy than for light abusers. Researchers at High Point University and Bradley University give us the specifics after having worked with a group of people who texted while driving and with another group who gambled excessively.
     Those who lightly engage in the problem behavior respond best to sales presentations that, without apparent exaggeration, portray the negative consequences of continuing. For heavy abusers—those who might be considered texting or gambling addicts—go positive instead, pointing out the benefits of cessation for people like them.
     The underlying consumer psychology principle is that if a person’s fear about continuing to engage in a problem behavior is too intense or if the person doesn’t see a way out, they become defensive and wave off the course of action you’re wanting to sell them.
     Tulane University research results indicate that you can adjust the degree of negative and positive by the way you talk about regret, guilt, or challenge. The studies here were of consumers who failed to use sunscreen sufficiently or should include more fiber in their diet. Statements successfully arousing regret included, “I can understand why you’re sorry you haven’t done the healthy thing so far.” Guilt was stimulated with, “I’m sure you want to do all you can to protect your family.” For challenge, a prompt was, “I realize making such changes is hard for most people.”
     Empowering the consumer helps keep it positive. Researchers at University of Houston and Boston College assigned study participants to one of three groups based on what they were instructed to say to companions and to themselves to resist temptations:
  • “No, I won’t”
  • “No, I can’t”
  • “No, I don’t”
     The “No, I don’t” group reported the best success.
     If in doubt about the degree of engagement of the consumer in the problem behavior, slant toward positives. Researchers at Victoria University of Wellington, University of Western England, and American University of Sharjah in the United Arab Emirates identified a group of students showing evidence of high anxiety. The researchers sent these students messages pointing out the possibly dire consequences of failing to seek help at the university counseling center.
     The threats didn’t convince the students to seek counseling nearly as well as emphasizing positive consequences in messages to the students.

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

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Thursday, December 3, 2015

Generate Empathy for Running Retail

Consumers don’t think much about the personalities of the store owners when shopping at a Big Box. On the other hand, the brand image of a small, locally-based retailer is tightly tied to perceptions of the owner and store operator.
     Research at Drexel University, Lehigh University, and Monmouth University indicates that this humanization of the store increases sensitivity to price changes. For any product and service brands in your store with a human or quasi-human association—items like Michelin tires with the Michelin Man logo and Mrs. Paul’s fish sticks—the sensitivity to price changes is especially keen. Shoppers are more likely to see price increases as efforts by the store owner and the item supplier to profiteer. Across product categories including frozen pizza, butter, paper towels, potato chips, toilet tissue, and yogurt, the researchers saw price increases stifling demand and price decreases enhancing demand more markedly with humanized than with non-humanized brands.
     In studies at Nanyang Technological University in Singapore, consumers who considered themselves close friends of a retailer were more forgiving of the retailer when the outcome of a transaction was unfavorable. The consumers gave higher ratings on fairness and satisfaction than when the retailer was considered only an acquaintance.
     But when serving customers who consider themselves to have a personal relationship with you, clarify expectations and obligations.
     Researchers at Lingnan University in Hong Kong and Chinese University of Hong Kong presented study participants with a scenario: You’ve asked the owner of a restaurant with whom you have a close business attachment to hold an ocean-view table for your birthday bash. When you arrive, the owner explains, with a tone of regret, that all the ocean-view tables are taken.
     Each study participant was asked what their reaction would be. Past research had indicated the restaurant customer would be empathic, since the owner was, after all, like a friend. And indeed, for many of the study participants, this was the reaction. They demonstrated understanding toward the owner. However, for other participants, the reaction was anger at being betrayed by a friend.
     In the Drexel/Lehigh/Monmouth studies, empathy also made the difference. Shoppers sensitive to the needs of others responded less strongly to price changes than did shoppers focused on their own needs.
     Generate empathy in your shoppers for the challenges of running a retail business. One research-based technique for doing this is to ask your regular customers for advice.

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

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