Levy a Cover Charge for Store Entertainment

To achieve a competitive edge over the ecommerce competition, brick-and-mortar retailers can offer in-store live entertainment. And levy a cover charge. Nightclubs have done it for decades.
     A New York Times article reports the extension of that concept to independent book stores. The Boulder Book Store in Boulder, Colorado is charging $5 to attend book signings. Kepler’s Books in Menlo Park, California requires purchase of a $10 gift card for attendance by two. McNally Jackson Books in New York City is constructing space to be used for fee-based signings. At R. J. Julia in Madison, Connecticut, about 10% of the store revenue currently comes from charges for the approximately 200 annual events.
     Other types of retailers beyond bars and bookstores can do the same sort of thing. Clothiers could charge for fashion shows, grocery stores for cooking demonstrations, sporting goods stores for celebrity appearances. The name “cover charge” fits especially well when the income covers the out-of-pocket expenses the retailer incurs in setting up the event and perhaps paying for the guest to appear.
     From a shopper psychology perspective, there’s evidence that charging a fee in itself lends value to the entertainment. When the price is zero, the consumer lacks a comparison point.
     Here’s how researchers at Monash University in Australia explain: If you’ve been giving each customer one free candy with each purchase and you now up that to five, the customer says, “Wow! That’s five times as much!” But if you’ve not given out candies to customers in the past and you now give out ten, the customer has zero as a comparison point for the ten, and our human brains don’t do well with zero as a comparison point. The research says that the customer is quite likely to be less impressed than the recipient of the five candies.
     The researchers extend this to other situations. For example, consider a sales promotion in which the purchaser of a digital camera is offered photo paper sufficient to print out 200 pictures. The offer will be more attractive if marketed as “We’ve been giving you paper for 10 pictures, but now we’ve upped that to enough for 200!,” than if the offer is, “For the first time, free paper to print out your photos, and it’s enough for 200!”
     Applying this to your in-store events, charge for all entertainment, but more for entertainment which is in higher demand.

Click below for more:
Stage Special Events to Build Sales
Give Shoppers a Comparison Point