Thursday, March 30, 2017

Mess Around with Merchandise Arrangement

When your shelves, racks, and showcases contain inventory that’s been systematically arranged, shoppers can more quickly find what they’re looking for. This speeds up each sales transaction and allows for more shopper self-service. It also pleases those of your customers who are Mission Shoppers—people who enter your store wanting to go directly for a particular item and, if the value is right, buy the item as soon as possible.
     But there’s also an advantage to having those who enter your store browse for a while, treating them as Possibilities Shoppers, who even if they have a specific item in mind, enjoy considering the alternatives. This is more likely to occur when the items are not so strictly organized.
     Moreover, researchers at San Diego State University, Arizona State University, and Washington University advocate retailers moving further—toward quite disorganized merchandise arrangements—in certain circumstances. They found that disorganized shelves which are not fully stocked increase sales of nonfood items. The disorganization and lack of full facing imply that the items are in demand, drawing extra interest from shoppers. In addition, when the merchandise is not packed in closely, the spacing around each item makes it more readily noticed by prospective purchasers.
     This was not true, however, for foods and beverages, where a scarcity of packages can imply old stock and disorganization can imply spoilage or lack of sanitation. Still, lack of a strict organization here can increase browsing, which would elevate sales so long as it doesn’t irritate the shoppers. 
     Long ago, I’d hear grocery store operators claim that shoppers buy more varieties of soup when the varieties are shelved in random order rather than alphabetically. The explanation went like this: The shopper’s interested in finding a particular variety. They look for that particular variety, but because there’s no order, the shopper’s eyes run over many varieties. As they do so, they start thinking, “Gee, maybe I could use that variety, too.”
     Researchers at University of Pennsylvania and University of Illinois confirmed that random arrangement of a product set can lead to more buying, but with a different explanation. The reason the random arrangement works, they said, is it gives shoppers a feeling of there being more to choose from. It takes time for the shopper to run their eyes over what’s there, and the increased time translates in the shopper’s mind to the impression of a larger assortment.

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

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Charge for Entertaining Possibilities Shoppers
Randomly Arrange Limited Product Sets
Keep It Clean
Clear Up Clutter Ambiguities
Double Duty to Prevent Shoplifting
Scare Up Creativity with Scarcity

Monday, March 27, 2017

Shape Ads for Future Use Purchases

In your advertising, use relatively pale hues to depict what you’re selling for customers’ future or long-term use. The ultimate pale hues are black and white. Ohio State University researchers say that color scheme might be the best of all for the situation.
     The rationale actually has as much to do with shapes as with colors. People considering purchase of an item are influenced by the shape and the color of depictions of the item in ads. The shape and color of illustrations of the product or of the box containing the product, of before-and-after pictures showing the benefits of product use, of text boxes in which the benefits of the service are described. When the people are thinking about use of the item in the future, the influence of shape is greater than the influence of color. Here, vibrant colors can interfere with the brain’s processing of shape, so it’s best to keep down the vibrancy.
     Once you’ve muted the hues, recognize how different shapes deliver different messages. For example, researchers at University of Miami and University of St. Gallen report that bold, solid, angular, and sharp characteristics enhance brand masculinity while airy, delicate, round, and smooth characteristics enhance brand femininity.
     In the ad itself, shoppers like balance, with elements of matching size on the left and right. But there also should be a few contrasting asymmetries with ratios which intrigue the shopper. University of British Columbia studies found that consumers in a culture that reads from left to right evaluated an antique more favorably when pictured on the left side of an ad than on the right side. With a modern art item, placement on the right side of the ad garnered more favorable ratings.
     Top and bottom matter, too. Research at York University suggests that shoppers will prefer a brand or store they see as powerful in the marketplace when the logo is placed high rather than low in the ad, while a placement low in the ad is better received when the brand or store is seen as an underdog.
     The different shapes in the ad should be seen as fitting together to constitute a group. Shoppers find visual pleasure in the repetition of themes. And there’s bonus appeal when the group of shapes represent to the consumer a familiar story. The familiarity may come from a principle of design common in the consumers’ culture.

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

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Sketch Item Aesthetics If Appreciated
Smooth It with Females, Angle for Males
Overachieve as the Underdog

Thursday, March 23, 2017

Soften Customer Upset Using Friendship

An advantage available to smaller retail businesses is the enhanced opportunity to create perceptions of friendship with customers. Large retailers with headquarters at a geographical distance find it harder to maintain impressions of authentic closeness. Not all small retailers take advantage of this competitive advantage. Those who do can find that, when negatives occur, the customers are more likely to take responsibility themselves. The blame on the retailer is partially or wholly softened.
     This was seen in a University of Washington simulation of the reactions of a night club’s customers who had previously qualified for the premium level in the club’s loyalty rewards program. In the study scenario, participants were told that the required level of annual spending for premium benefits had been raised and that they were losing their premium benefits. In some cases, the customers would have fallen short even with the old limit. Their spending had gone down compared to the period in which they’d qualified. In the remainder of the cases, the expiration of benefits was because of the tighter standard. They would still have qualified under the old limit.
     Customers who felt no close relationship to the night club were more likely to blame the club than themselves for being dropped. It made no difference whether they would have qualified under the old standard. For the customers who felt a close relationship, it did make a difference. Yes, those who would have qualified under the old standard blamed the club. They felt that a friend had betrayed them. But those who would not have qualified blamed themselves.
     Still, being a friend isn’t enough. Clarify expectations. 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.
     Many of the consumers empathized with the owner. However, for others, the reaction was anger. What made the difference was whether the study participant, taking on the role of a customer, had clarified in advance their own expectations and obligations and those of the retailer. With this clarification for transactions based on close business attachments, there was more likely to be customer acceptance of the owner’s needs.

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

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Puff Down for Authenticity
Clarify Expectations with Friendship Customers

Monday, March 20, 2017

Smoke Out Which Models Motivate Teens

When people yearn for something they can’t yet have, they often fantasize about having it. Featuring those fantasies in your store advertising can facilitate favorable impressions. But it could be favorable impressions of an item other than the one in the ad.
     How this operates in adolescents was explored by researchers at University of California-Irvine. Teens are more responsive to clothing ads showing teen models than those showing young adult models. But it was different with age-restricted products. The researchers created mock magazines that included cigarette ads. For some study participants, the ads featured young adult models, for another group, teen models, and for a third group, middle-aged models. After perusing the magazine, each participant was asked a number of questions, including how likely they thought it was that they’d smoke in the future.
     The participants showing the highest intent to smoke were those viewing the young adult models. This differential effect was strongest for adolescents who also had expressed dissatisfaction with their current age.
     The researchers’ advice for marketers who want to protect adolescent health: In your ads for cigarettes, feature models who are 45 years old. Study participants seeing those models were the least likely of all to say they intended to smoke.
     Better yet, I propose, is not to advertise tobacco products at all. But the underlying point is that knowing an item is forbidden to them will result in an increase in attractiveness to teens, and this happens more strongly when the teens view use of the items by those they aspire to become.
     Once they get the items, however, the struggle might lead the teens to like the items less. In a Stanford University study, the average price people who failed to obtain an item they wanted said they’d pay was 43% higher than the average willingness to pay among those who got the item. But when the jilted group were given the item later as part of this perverse experiment, they were substantially less likely to want to keep the item than were those who had received the item at the start.
     Such ill feelings even generalize. Some people were told they might win Guess brand sunglasses, then later were told supplies had run out. These frustrated folks rated Guess watches lower and a competing watch brand higher than did an equivalent set of people never promised the possibility of getting Guess sunglasses.

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

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Convince Shoppers to Reach for the Stars
Notice How Teens Are Into Exclusive Resale
Accept the OOS Redirection Exception

Thursday, March 16, 2017

Experience How Experience Is Price-Quality

Many findings in shopper psychology are obtained by exposing consumers to novel situations. In applying those findings to making sales in your store, it’s important to recognize how consumers’ familiarity with the characteristics of the transaction changes the consumer’s response.
     The price-quality link is one example. Decades of research have clearly established that people purchasing a higher-priced alternative from a set with equivalent features generally expect to receive a more reliable embodiment of those features. When people buy at what they consider to be deeply discounted prices, they start out feeling the benefits are less than if they’d paid full price. They love having saved money, but as a rule, they are less in love with the item. And whenever they pay top dollar, they’re primed to believe what they’re acquiring is top quality.
     Studies at University of British Columbia and China’s Cheung Kong Graduate School of Business document that, if these anticipations are violated, the price-quality link is not so much dissolved as it is twisted. After having consumed the item, people evaluate a low-quality product with a high price more negatively than the identical low-quality product with a low price.
     Such violations are fairly common. Any consumer with a few years of purchases behind her can tell you about the high-priced national brand items she came across which were inferior to the discount-tagged house brands and the many episodes in which low-cost items included the reliability of basics not seen in the over-the-top-priced alternatives.
     When your customers come to you with the price-quality link intact, they are willing to pay you more for what they believe has higher quality. This occurs most easily with first-time purchases of the types of items behavioral economists call “experience goods” and “post-experience” goods.
     The values of experience goods are difficult for the shopper to assess until they’ve been purchased and used for a while. Unfamiliar foods, innovative tools, gym memberships, and insurance policies are experience goods. Nutritional supplements and investment portfolios are examples of what are generally considered to be post-experience goods. These are items for which it is difficult to evaluate the advantages of having made the purchase even after the use. Because of this, the influence of the price-quality link lingers long after the first-time purchase, and the effect of the link depends heavily on the consumer being convinced of the quality of the items through advertising and salesmanship.

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

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Depend on Interdependency for Price-Quality
Post Dramatic Tales for Post-Experience Goods

Monday, March 13, 2017

Sidle Eyeballs for Variety Purchasing

Shoppers are attracted to stores that offer a broad variety of choices within product categories. This provides a challenge for smaller retailers, whose display spaces and inventory budgets are more limited than those of large retailers. Researchers at Ohio State University, University of Pennsylvania, University of California-Davis, and San Jose State University suggest that, to up the impression of variety, arrange alternatives horizontally rather than vertically. This works because our eyes move more smoothly from side to side than from up to down.
     The researchers found that shoppers under time pressure will perceive there’s a broader range of alternatives in a horizontal than in a vertical display. The result is a greater interest in buying one or more of the items. When the shopper’s time is not tight, a horizontal display, compared to a vertical, elicits greater amounts of browsing. For those circumstances in which a shopper could use more than one alternative from the selection, the result of the extra browsing is purchase of a larger number of items.
     All this was verified in college students pretending to be shoppers by tracking their eye movements and in mall shoppers by tracking their purchase patterns. The researchers even saw the effect work with how candy selections were made by Halloween trick-or-treaters.
     For using these findings in a retail store setting, the researchers caution about choice overload. Some years ago, studies at University of Pennsylvania and Columbia University found that expectations of large product assortments do indeed attract shoppers to a store, but once there, many of the people avoid making a purchase because they’re not sure what’s best.
     If you encounter this problem, encourage the consumer to think in more abstract ways, such as about features the items have in common rather than considering each item in the choice as unique. Similarly, researchers at University of Delaware and University of Pennsylvania discovered that a way to keep shoppers engaged is to encourage them to focus on product features rather than item alternatives. With the features in mind, the person can start rating each alternative until coming to a decision.
     So in your marketing, point out how you offer a large number of choices. When a shopper starts the shopping with you, display categories within categories to highlight the abundance of alternatives. Arrange the choices within categories horizontally instead of vertically. Then recognize the potential for choice overload.

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

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Organize Shelves & Racks to Portray Variety
Abstract Shoppers to Avoid Choice Overload
Limit Variety as Shoppers Approach Goals
Adjust Assortment by Use Attractiveness
Orient Shoppers to Appreciate Discounts

Thursday, March 9, 2017

Brand Discounts Risky If Discouraging Purchase

How is it that a promotional discount on an item in your store would discourage people from buying the item again? Researchers at University of Iowa and Washington University found it happens when consumers think a special price on an item signals that another promotional discount will be coming soon. When shoppers see the regular price on the item after the promotion, they put off purchasing it, believing they’ll get more for their money by waiting until the next sale. In the meantime, you’re missing out on the sales revenue from the item.
     The discount has devalued the item in a way similar to the effects of a “Buy one, get one for free” promotion. When a product is seen by the shopper as being offered for free as part of the BOGO, the shopper resists paying full price for it afterwards. The remedy for the BOGO is to offer, along with the free sample, a coupon for a discount on the regular price, helping to develop a habit to purchase the item.
     In running promotions, your hope is probably most often for the other sort of interpretation studied by those researchers: A good sale on an item indicates it won’t be going on sale again in the near future. This interpretation can motivate quantity purchases. In fact, when it comes to products that are otherwise highly popular, you might decide to limit how many can be purchased at the discounted price. Otherwise, you could run out, irritating your other shoppers.
     With the commodity category the researchers studied—paper towels—this second interpretation occurred less often among shoppers than did the first one. Overall, the promotional discount was leading people to purchase the particular item less often, not more often, in subsequent weeks.
     This effect is risky for a retailer, but not always bad. It’s found to occur most strongly with brand loyal customers. Therefore, if you want to switch a customer to another brand—such as from a nationally advertised to your private label brand—a discount followed by a return to the regular price could facilitate that. Offer a discount on the private label brand at the same time that you restore the standard price on the nationally advertised brand.
     Analyze purchasing patterns to determine which of the two interpretations of your promotional discounts is happening more often. Then take the steps which best serve your store.

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

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Go for BOGO Free Over BOGO Discounted
Increase Purchase Quantities with Discounts
Decide Whether to Limit Purchase Quantities
Use Customer Life Changes to Switch Brands

Monday, March 6, 2017

Give the Dissatisfied an Apology & Remedy

When a customer comes to you highly upset about how they were dealt with in your store, which of these personalities would give the best results for your business?
  • The empathizer listens sympathetically and takes time to understand the whole situation. 
  • The hard worker finds out what store procedures fit the situation and then strictly adheres to those. 
  • The controller takes charge of the conversation, promptly and decisively proposing a solution. 
  • The accommodator eagerly offers discounts or refunds until the customer is satisfied. 
     Those personality names and admittedly very brief descriptions come from a multinational cross-industry study by consulting firm CEB of 1,440 frontline customer service workers. Of the four I listed from the typology, which type would you prefer to have dealing in your store with any of what the researchers called “unbelievably impatient” complainers? Please make your choice, and then read on.
     I listed the four in order of prevalence in the CEB sample. About 32% were empathizers, and about 11% were accommodators. The measures used by the researchers to determine what type did best included the time to resolve the issue and the customer’s reported satisfaction with the resolution.
     The researchers report that when managers were asked which type they thought would do best, the empathizer won the vote. That no doubt accounts for why this was the most frequent type in organizations. But according to the metrics, the type that did best was not the empathizer, but instead the controller. The researchers explain this by saying, “Customers don’t want an apology, they want a solution.”
     Based on my review of other research, I’d advise you, retailer, that disgruntled customers want both an apology and a solution from you, not only one or the other. For instance, researchers from Chinese University of Hong Kong and Fudan University in China found that empathy toward customers influenced satisfaction to a greater extent than did service outcome factors, such how well the clothes dryer works after being repaired or if the cruise ship vacation met expectations.
     The CEB study was of call center staff. Your in-store staff who handle complaints are usually conversing face-to-face, not over the phone, and should be aiming to develop and maintain a lasting sales relationship with the customer, not just a dialogue for the duration of the complaint resolution. Still, the CEB study reminds us of the value of decisive action with the disgruntled.

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

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Show Complainers Respect, Concern, & Empathy
Delegate, Empower & Collaborate
Sidestep Complaint Extortion

Thursday, March 2, 2017

Ease Irritation by Eliciting White Lies

The salesperson or cashier briefly looks away from the person they’re serving and says to the people waiting, “I apologize for the delay. I’ll be with you soon.” Based on your experience as a retailer, what do you think the most likely response will be from those in line? Probably an accepting nod or an “It’s okay.” The retailer’s acknowledgement that they’re waiting in itself eases the irritation.
     Researchers at University of Alberta and Stanford University say there’s another dynamic at work here, too: If someone who is inconvenienced nods or verbalizes acceptance, they are taking on some responsibility for enduring the bother, this gives them a feeling of control, and that feeling eases their irritation.
     In many cases, the expression of acceptance is a white lie, generated to be nice. When customers in a setting they find to be otherwise pleasant believe they’ve figured out what the retailer wants them to do, they typically mold their behavior to fit.
     This irritation amelioration also occurs in restaurants when the diner with the slightly overcooked steak tells the server that everything is perfect even though it’s not. And with the woman who leaves the hairdresser the usual tip, although she’s not at all comfortable with the unexpected new look. Actually, in the study of waiting lines, the shoppers who told the white lies ended up spending more money than did those who were not induced to lie by the retailer’s acknowledgement and reassurance. It was as if the irritated shoppers wanted to go overboard in convincing themselves they felt better.
     In areas where shoppers often need to wait, the placement of mirrors can ease the irritation. Because most people are entertained by looking at themselves, you’ll get from the shopper less than the average 36% overestimation of the service delay. But again, there’s also the shared responsibility perspective. When a consumer sees an image of herself, her self-awareness increases. This leads to the consumer subconsciously considering what part she played in the unsatisfactory experience.
     Researchers at Bayer Healthcare, Columbia University, and Maastricht University found that placing a mirror behind places where you accept complaints reduces the intensity of customers’ dissatisfaction. Mirrors cause us to pause and look at ourselves. Moreover, the reflection in the mirror helps people sense emotions they’re experiencing, again arousing self-awareness which can ease extreme irritation. Signage including words like I, my, and mine also works.

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

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Acknowledge People Waiting in Line
Demand to Know Characteristics of Bias
Screw the Torture of Customer Waits
Keep the Checkout Lines Flowing