Monday, December 31, 2012

Syncopate the Intrusiveness of Ad Music

Does music in your ads support the personality you want your retail business to project? Psychologists at University of Melbourne suggest you aim for a personality which fits how your target customers want to see themselves. A fundamental choice in store personality is between exciting and sincere. Different music styles project one over the other.
     Recently, a business professor from University of Virginia and the executive director of the Illinois Philharmonic Orchestra collaborated to further refine advice about harmonic, textural, and temporal characteristics of an ad’s background music. They noted how music draws the shopper’s attention. When the attention ends up with the message you’ve chosen to deliver, the music has fulfilled its marketing job.
     You might choose to fade out the music for the rest of the ad. If you’d like a shopper to carefully analyze a purchase decision, either don’t have music or use music which is barely noticeable. When customers listen to music, their attention is taken away from analyzing the purchase decision.
     In particular, if you’re wanting customers to try new brands or new products, eliminate intrusive music. Research finds that recall of messages from ads for unfamiliar brands is damaged more by intrusive music than is recall for messages from store or item branding with which the shopper is familiar.
     Frequent changes in the harmonies, texture, or tempo of the music aggravate the intrusiveness. As part of an ancient survival mechanism, our human brains are wired to put top importance on processing unanticipated background sound changes. Our prehistoric ancestors found this skill valuable for sensing danger and homing in on high-protein meals.
     That survival mechanism results in us turning our attention from an advertiser’s message when the music changes. Changes in tempo do it, and if the tempo was already fast, the effect is more extreme, say the Virginia/Illinois researchers.
     At first glance, this is disappointing news, since other research has found that fast tempo music motivates shoppers into action. The way to maintain the advantage is to keep the fast tempo steady, as long as the syncopation fits the personality of the retail business. The upbeat pace also facilitates the shopper’s processing of any changes in harmonies or texture of the music.
     Monitor the intrusiveness qualities so you can draw attention toward what you want the shopper to notice and away from what you prefer be hijacked before making it into longer-term memory.

Click below for more: 
Use Music to Motivate, Not Disrupt 
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Sunday, December 30, 2012

Let Go of Irritating Brand Extensions

Say you had fine success in your store selling classic LEGO building blocks. Now the LEGO Group has come out with brand extensions using the LEGO name, many of them kits instructing the child how to build specific items from “Star Wars,” “Lord of the Rings,” and “Marvel Super Heroes” movies. Should you stock these kits?
     If you’ve the shelf space, it seems like an easy decision. When The Clorox Company decided to extend the brand name from bleach to disinfectant wipes, stores were wise to stock the wipes. And combining the sales power of the LEGO name with that of a franchise like Marvel Super Heroes seems bound to be, well, super.
     However, according to an article in last weekend’s New York Times, people are irritated at the LEGO extensions. The accusation: LEGO earned loyalty by selling items which fully engage the child’s imagination. There were always a few different building ideas in the instructions, and the notion was they were there mainly to get you started. In the theme sets, the instructions are for a one right way to join the blocks.
     With plenty of other LEGO brand extensions, it would be harder to build a case for imagination being hobbled: LEGO children’s books, stickers for art projects, and a board game. But okay, there are the LEGO video games.
     The question, affecting all retailers with limited selling space, is what distinguishes brand extensions your shoppers will welcome from ones which will irritate your shoppers. As it happens, the issue was studied by University of Connecticut researchers, and they used LEGO as an example. Here’s my version of the research results, in the form of four related sets of questions you should ask:
  • How well does this extension maintain brand standards and style? Degree-of-agreement items on the Connecticut researchers inventory included, “The standards of LEGO are apparently contained in this extension.” 
  • To what degree does the extension honor the brand heritage? “LEGO seems to have abandoned its roots with this extension.”
  • How well does the extension preserve the brand essence? “This extension captures what makes LEGO unique to me.”
  • Does the extension avoid brand exploitation? “With this extension, it seems that LEGO was more concerned with preserving the brand than growing the market.”
     If the brand extension you’re considering adding to your inventory doesn’t come up high enough on the qualifying criteria, let go of those LEGOS.

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Compare Unknown Brand Extensions 
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Saturday, December 29, 2012

Slacken Consumers’ Undervaluing of Time

For busy merchants such as Benjamin Franklin and you, time is money. That’s why he composed the phrase for his Advice to a Young Tradesman, Written by an Old One.
     For your shoppers, time and money are psychologically different:
  • Consumers consider time more valuable than money when thinking how time is perishable. If you don’t use time now, it’s gone forever, but money not used now can be used later. In fact, if invested properly, the money gains in value. When you, as a retailer, establish this mindset in shoppers, they’re more impressed with appeals to saving time than saving money. 
  • This appeal also works well when consumers are thinking of time as more subject to having a fixed supply than does money. There’s only so much time available, but a person can use credit to expand the money available now. 
  • However, unless the consumer has either or both of those mindsets, the consumer will undervalue a savings of time. There’s a tendency to think indefinite amounts of slack time will become available in the future. If your appeal to the shopper is a savings of time, the research findings suggest you start by prompting the shopper to place a greater value on time. 
     Another example of the perceived perishability of time comes from research at University of South Carolina. One summer, theatre patrons were offered a movie pass. For about half of the patrons, getting the movie pass required completing a survey, which took about seven minutes. So that the researchers could compare time with money, a matching set of patrons were offered the movie pass for $3—no survey completion required.
     Another wrinkle in the experimental design: About half the tickets in each group were marked for use later that summer. The others were marked for use the following fall.
     What difference did this make? For those who spent the $3, the percentage of fall ticket usage was the same as that for the summer tickets. People put out the money, and they were going to get their money’s worth. But among the patrons who earned their ticket by spending seven minutes of time, the season of usage made a big difference. People were significantly more likely to end up using the ticket if marked for the summer than if marked for the fall.

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Friday, December 28, 2012

Foot the Bill for Stocking Shoes

A current U.S. News & World Report article says shoes are climbing toward being a top-selling item at retail. For instance, this last Black Friday, shoes were the fifth most popular item on gift shoppers’ lists. One year before, shoes weren’t even among the top ten. Fleet Feet Sports Chicago maintains a year-round gift registry for running and fitness shoes. JustFab and offer shoe-of-the-month subscription plans. The selection is determined by answers to questions the member gave upon enrollment, past purchases, and data about all members’ preferences.
     An appeal of footwear for the consumer is the combination of fashionable with practical. An appeal for the retailer is that the items carry relatively high profit margins, in some cases 50%.
     Keeping all available sizes in stock might mean carrying substantial inventory. The shoe department in the New York City Saks Fifth Avenue occupies the entire 8th floor. But because of the popularity of these items, it can be worthwhile for you to foot the bill for shoe stocking. And maybe also stockings. Or socks.
     There are few sure things in retailing. The ability of shoes to increase sales revenues might be one of them. In 1999, retailer Nick Swinmurn convinced venture capital investors to begin the firm now known as Zappos and owned by Mr. Swinmurn’s pitch was that footwear in the U.S. is a market worth $40 billion annually.
     Whatever line of merchandise you sell, consider if you can include shoes. Sporting goods? Shoes fit well. Toys? How about tiny shoes for the dolls? Home improvement products? Steel-tipped shoes could make the do-it-yourselfer feel like they’ve the heft of a professional carpenter.
     High heel shoes have a magical appeal for women consumers. Many claim the added height makes a woman feel more assertive. A few classic psychoanalysts said the high heels’ shape penetrates any penis envy. Hey, there are two of them rather than the man’s one. The psychoanalysts refer to this as overcompensation. Then, too, retailers skeptical of psychoanalytic interpretation can still observe how the elevation of a high heel sculpts the calf and thrusts the pelvis forward, stimulating sexual attractiveness all around.
     It’s not only the high heels which are accounting for high sales. For just the three months ending in November 2012, retail sales of cross training shoes rose 16% and basketball shoes 19%.
     Including footwear in your merchandise mix could be a shoe-in.

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Shoe Things for Higher Sales Revenues 
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Thursday, December 27, 2012

Satisfy Sad Shoppers with Prompt Rewards

In a consumer survey released earlier this year by financial services retailer BMO, about 60% of respondents said they engage in retail therapy— the intentional use of shopping by people who are feeling sad in order to improve their mood. Now research from Columbia University and Harvard University finds that 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, such as disgust, anger, or fear.
     The Riverside researchers also found that the 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.
     The implications for retailers are:
  • 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. 
     The impatience activated by sadness doesn’t set off a shopping frenzy. Research findings from Pennsylvania State University and HEC-Paris support the view that with the exception of the 5% of adults who suffer from Compulsive Buying Disorder, people seeking retail therapy are fully capable of exercising self-control. Their shopping is mindful, not mindless. They restrain themselves because the restraint itself helps lift their spirits.
     The Pennsylvania/HEC researchers also found that the restorative benefits of retail therapy last well beyond the duration of the shopping trips. These consumers associate relief with their trips, not regret or guilt for making unplanned purchases. Instead of avoiding the stores in the future, they become more likely to return whenever sadness reoccurs. Feeling down from time to time is a chronic condition. Show how you understand, and your store will become the quick payoff therapeutic couch.

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Couch Retail Therapy for Chronic Conditions 
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Wednesday, December 26, 2012

Bag Shoppers with Shopping Bags

A distinctive shopping bag your customers display to others can gain you customers. It’s like the effect of people seeing customers using what they purchased at your store.
     Researchers at Northwestern University and University of Pennsylvania applied that principle to the purchase of new cars because the consumer had seen others driving that make and model:
  • The effect was larger among commuters than non-commuters, probably because commuters have more opportunities to observe the relative frequency with which people have selected various automobiles. With shopping bags, the effect is likely to be larger if your store is in a mall rather than isolated. Still, if the shopping bag is sturdy enough for reuse, it should get more exposure and thus influence more prospects. 
  • The effect is stronger on people similar to the purchaser. In the car study, seeing vehicles associated with male traits of power and flash had greater influence on purchases by men than by women. Similarly, preferences were changed only among cars in a similar price tier. The Toyota Corolla prospect was not greatly influenced by seeing lots of people driving Lexus models. With shopping bags, a budget logo will influence budget shoppers more than luxury shoppers. Think what tag line you’d like to put on the bag along with your logo so it draws notice from your target psychographics. 
  • There’s saturation. After seeing whole bunches of the same car model or the same shopping bag design, more of the same has no additional effect. Additional shopping bags are not necessarily better, and can instead be worse when you factor in the cost of production. 
     Other research suggests the shopping bag’s effectiveness derives from the mindset of the customer carrying the bag and how that mindset is observed by passersby. University of Minnesota researchers had female participants carry a shopping bag for an hour as they walked around a mall. Some of the women carried a Victoria’s Secret shopping bag. The rest carried a pink shopping bag with no store or brand identification. At the end of the hour, each woman returned to the research site and was asked to rate herself on a list of personality traits.
     Compared to those who carried the plain bag, the women who carried the Victoria’s Secret bag were more likely to rate themselves as feminine, glamorous, and physically attractive. These are characteristics associated with the Victoria’s Secret store and merchandise brands.

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Tuesday, December 25, 2012

Genuflect to Counterfeit’s Accidental Appeal

According to brand protection firm MarkMonitor, most of your shoppers who look at counterfeit versions of what you sell don’t realize the items are fakes. Because counterfeit goods are usually of inferior quality, you’ll be doing a service by helping those shoppers question whether they’re being fooled. Acknowledge the compelling appeal of counterfeits which seem genuine, then present the advantages of buying the real deal.
     The MarkMonitor study analyzed almost five million online shopping inquiries from more than 300,000 consumers in France, Germany, Italy, Spain, Switzerland, the UK, and the U.S. The researchers found that shoppers are likely to end up on a site selling counterfeit goods if the shoppers include in their search query words such as fake, knockoff, or replica, but also if the search terms include words like cheap, clearance, discount, outlet, or wholesale. Of those guided to a site featuring fakes, roughly four times as many had been searching for a bargain than for knockoffs. That indicates that many people considering whether to purchase counterfeit goods don’t realize the goods aren’t legitimate.
     This is useful for you to know when the shopper comes into your store and presents the price of the item as a comparison point to what you are charging. Because it’s common for online prices to be lower than in-store prices, you might assume that the price you’re quoted is for an equivalent item. If it’s counterfeit, it isn’t equivalent.
     The MarkMonitor report of findings also says the prices for counterfeits might, in reality, not be dramatically better than what you can offer. The so-called discounts shown on the 8,000 rogue sites monitored were often in the range of 25% to 50%—like your special promotion sales.
     About 16% of the sessions ended in a purchase when on a site selling counterfeit items. This 16% conversion rate was the same whether the shopper had been searching for a bargain or a fake. You could warn these shoppers in your ads and social media channels, since they might not come into your store. However, purchasers of counterfeit goods do often end up disappointed and irritated, so they could come to talk with you post-purchase.
     Don’t shame your shopper who’s been suckered. Consumers who identify with individually oriented cultures, like the U.S., Australia, and Great Britain, are especially sensitive to that. Frame your questions and cautions as doing a service for a valued customer.

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Prefer Obligation to Shame

Monday, December 24, 2012

Set Customers to Collect Items

According to the New York Times, a number of retailers are profiting by offering collectible snow globes each holiday season. Neiman Marcus maintains a registry of standing orders. Henri Bendel has upped the snow globe design sophistication along with the prices over the years.
     During the Great Recession, sales of high quality collectibles held much better than with most other retail product classifications. When it comes to collectibles, the urge to possess the whole set means there is less consumer sensitivity to price and more drive in the shopper to buy now.
     You don’t need to appeal to a luxury market, limit your merchandising of collectibles to the Christmas season, or sell elaborate snow globes in order to benefit from the shopper psychology of the collector. For any merchandise lines aside from those consumers consider to be necessities, think about giving the items the appeal of collectibles:
  • Feature items in groups, each one a distinctive member of the family. If parallel products are available for different age groups, have those items in the same ad and on the same sign. Stock them on the same end cap. 
  • Introduce new items in the set regularly, at which point you rotate out older versions. This encourages shoppers to buy now. 
  • Take special orders and publicize resale markets. When your customers are having trouble getting that special item to fill in the missing spot in the collection, help them buy it from you or from a collectors' group. Keep your customers as dedicated collectors. 
     Then encourage all shoppers to become collectors. Here are three motivations:
  • Fantasy identification. Researchers at University of Minnesota, University of Arizona, and Notre Dame University found that collectors often view each item in their collection as a fantasy image of themselves. In selling collectibles, give each item a personality the customer wants. 
  • Reminders of experiences. University of Minnesota researchers pointed out how some items in a collection gain special importance because of the wealth of the owner’s personal experiences that have become associated with the items. 
  • Sense of completeness. University of Nebraska-Lincoln research found that as children approach age 11, their desire to have complete collections grows. In most adults up through middle age, the urge for completeness often comes to play less of a role in purchasing behavior. To sell to the adult collector, you might want to redefine what constitutes a complete collection. 
Click below for more: 
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Sunday, December 23, 2012

Perfect Your Salesmanship for Perfectionists

Perfectionist shoppers are a nuisance for retailers. They consume an abundance of your time to conclude a sale and then might return an item or resist paying for a service because their unrealistic expectations were not fulfilled.
     I’m hearing more tales from retailers about needing to deal with perfectionist shoppers. Why might there be an increase?
  • The growing abundance of choices in the marketplace tempts consumers to believe they can have it all. 
  • Perfectionism is a way to grasp for control when the economy around feels uncertain. 
     Research reported this year by Michigan State University psychologists finds a large genetic component in perfectionism. A person’s environment—the strictness of a parent’s standards, the reactions of bosses to errors on the job—shape the personality trait. But a larger determination comes from what you’re born with. This means perfectionism is challenging to change.
     It can be done, however, at least for the duration of the consumer’s time in your store. Let’s aim for what psychologist/economist Herbert Simon coined “satisficing” to refer to his finding that many successful people accept less-than-perfect alternatives so they can move on to the next choices they want to make.
      Swarthmore College researchers determined that satisficers have higher life satisfaction, happiness, optimism, and self-esteem than do people who hold out for perfection. Therefore, we’ll be aiding the mental health of true perfectionists if we can have them satisfice for their time with us.
  • Start by determining if this shopper is, in fact, a true perfectionist rather than somebody who wants to fulfill a fantasy of having you as a slave to their whims. Is the shopper spiraling in toward a defined goal, even though that purchase goal is unattainable? A yes answer indicates you’re dealing with a perfectionist. But if the demands change willy-nilly, and no matter what you do, you can’t move even a smidgen toward a sale, terminate the harassment. 
  • Identify areas important to the shopper for which you can satisfy their specifications completely or very close to completely. When other areas of concern keep coming up, evaluate how vital these would be for a non-perfectionist to receive full value from the transaction with you. It’s likely you’ll conclude it’s fine for the shopper to satisfice. Then say how close you can come to what the perfectionist is asking you and bring the discussion back to the areas where you can indeed give perfection. 
Click below for more: 
Plan for Customers to Satisfice

Saturday, December 22, 2012

Puff Up Your Bragging Judiciously

Jewelry retailer Zales says its Celebration Fire diamonds are the most brilliant in the world. The parent company of competitors Kay Jewelers and Jared the Galleria of Jewelry says Zale is lying. Next week, a federal judge in Ohio is scheduled to decide if the Zales claim is false advertising, which is illegal, or only puffery.
     Puffery consists of lavish, often exaggerated, claims about a store or about products carried by the store. The U.S. Federal Trade Commission doesn’t consider puffery to be illegal lying. That’s because the FTC defines puffery as too subjective for the truth or falsity to be determined.
     Sometimes what’s said is obvious puffery: “We give the best store service you’ll ever find anywhere.” The words are expressing nothing more malicious than exuberant enthusiasm.
     In other cases, the degree of puffery is harder for the consumer to spot because it consists of exaggerated importance placed on a trivial claim: “Our house brand ice cream uses only European flavors.”
     This second sort of puffery does influence shoppers in significant ways, according to University of Mannheim research:
  • Draws attention to the complete selling message 
  • Impresses the shopper that the alternative is highly distinctive 
  • Leaves the purchaser with the impression that the price paid is fair 
  • Builds positive attitudes toward the store and/or other items carrying the brand name 
     Should you engage in puffery? Research findings from University of Illinois-Urbana/Champaign, University of Michigan, and Northwestern University indicate that the effectiveness of the technique depends on the expertise of the shopper, the channel you use to deliver the message, and how you do the comparisons:
  • Puffery is more likely to influence consumers to buy a product when the consumers believe other people know more about the particular store or the particular product category than they themselves do. 
  • Puffery is more likely to positively influence consumers when delivered by a source the consumers consider to have expertise about shopping for products in the category they’re considering. 
  • If presenting the shopper a comparison of three—such as three products you carry—puffery about one of them will influence the shopper to favor that one, but the same puffery about a trivial attribute possessed by two of the three will drastically undercut the influence of the puffery. 
  • A risk in using puffery is that consumers who are not positively influenced will lose trust in the retailer’s other, validated, claims of purchase benefits. 
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Friday, December 21, 2012

Look Simple, But Offer Complexity

In general, we all want to simplify choices. Consumers like to take mental shortcuts. Retailers attract shoppers by advertising a good abundance of alternatives, then move the prospect toward purchase by offering tools the shopper can use to deftly filter the choices.
     Yet researchers at University of Pennsylvania and Columbia University found circumstances in which retailers do well to complicate choice. Among these circumstances are 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.
     These types of decisions have to do with people’s careers, homes, caretakers, and life partners. Because of the significance of such choices, the person believes they should devote time and mental effort even if the process seems at first to constitute a straightforward selection. In times of economic strain, there are more of these decisions.
     Here, rather than help the consumer find shortcuts, tolerate how the consumer adds complexity:
  • She focuses on the choice that does seem clearly best, but then exaggerates the importance of what are actually insignificant disadvantages of that choice. 
  • He changes the criteria for decision making he had previously decided to use so that the decision making has to start over. 
  • She keeps the same criteria, but agonizes over the relative weighting. 
     Resist pressuring the shopper or reassuring that the decision really is an easy one. A better alternative is to acknowledge to the shopper the significance of the decision and reflect, without criticism, on the convolution the shopper has introduced. You’ll be complicating, rather than simplifying, the lifestyle choice in order to help the consumer satisfy a decision making need.
     “Decisions like this are very important, so I fully understand your exploring all sides. You’re starting the decision making process again so you can look at each part in detail. That will take time and mental energy you want to put into this task.”

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

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Thursday, December 20, 2012

Scope New Horizons as Expanding Expertise

Consumers often aim for variety, but at times will mysteriously resist efforts to get them to try something new. Research at University of Cincinnati, University of Florida, and University of Mississippi suggests a way to sidestep the resistance: Present the novel alternative as an opportunity for the shopper to deepen their knowledge in a field in which they consider themselves to be somewhat of an expert.
     When the researchers offered choices of a variety of music samples to study participants, those who considered themselves novices when it came to music were willing to sample only a few new songs. Those who considered themselves experts were willing to sample a substantially larger number of songs.
     The rest of the story, though, is in the range of music genres sampled. The novices accepted the few new songs in a multitude of genres. The experts, on the other hand, accepted the greater number of songs solely from one or a limited number of genres in which they considered themselves to have some expertise.
     In those circumstances where the mysterious resistance to exploring new horizons has not arisen, both novices and experts are open to change, although with different mindsets. The novices are attracted to broadening their knowledge. Offer them a wallet, game, or salad dressing with the pitch that it’s dramatically different from anything they’re familiar with. With the experts, invite them to carefully examine the new offering as deepening, not broadening, their understanding.
     With both types of consumers, recognize how you can mobilize a fear of boredom to motivate trial.
     Carnegie Mellon students were told they could select snacks to eat at the end of three successive class sessions. Half the students were asked to choose one item each of the three weeks. At each session, they weren’t told if there would be additional opportunities to choose in future classes. The others were told that in the first class session they were to select the treat they wanted for each of three classes in advance.
     Among those who selected one item each week, 8% ended up selecting three different ones. Among those who were required to announce all three selections in advance, 45% chose three different items.
     People overestimate the extent to which they’ll get tired of eating or using the same item. They think they’ll want to make a change when, in fact, they’ll end up sticking with a favorite.

Click below for more: 
See Through Consumers’ Boredom Fears

Wednesday, December 19, 2012

Miniaturize Your Serving Size

Earlier this month, a Wall Street Journal article analyzed the trend to serve cocktails in mini versions. Advantages to the retailer include opportunities for higher profits. You won’t shrink the price as severely as you shrink the serving size. The trend parallels what a range of retail lines are doing, including restaurants offering smaller portion alternatives and health clubs selling ten-minute chair massages.
     But the customer must conclude they’re getting full value. Here are some research-based tips:
  • Point out the advantages of the miniaturization for the consumer. The WSJ piece says bartenders are reminding customers how the later sips of the martini are too warm when it’s been served in a container resembling, in size and contour, a goldfish bowl. With other products, an advantage can be a lower sale price than for the previously sized version. 
  • Change the look of the container. Research at University of Michigan finds that when customers hold a reusable container—as they will if refilling it at your store—they will perceive the container as having more when it is short and wide rather than tall and narrow. The WSJ Waterford Mixology barware line features 3½-ounce cut crystal stemware in bright colors. The difference is striking enough that the customer is less likely to fret about the reduced serving allocation. 
  • Change the contents. Bartenders are using the smaller cocktail size to introduce alcoholic potions which would be unpleasant in an eight-ounce dose. Massage therapists can alter the nature of the ten-minute massage to best fit the diminutive duration. 
  • Associate small size with prestige. Researchers at HEC-Paris and Northwestern University found that when the large size of a product or package implies power, consumers craving more power go for the large. However, when other consumers were offered four sizes of hor d’oeuvres, the smallest was favored. That’s because those consumers had been told the smallest hor d’oeuvres were the type recently served at a White House event. (The research article I cite here was subsequently retracted following the discovery of a set of statistical errors which cannot be explained, since the authors no longer have the data. I’m leaving my reference to this article in place with this notice so that my blog readers coming here via a hyperlink won’t get a search error message.)
  • Wean the customers over. When two bartenders profiled in the WSJ article got customer complaints about smaller sizes, they responded with the ice cream shop malted milk method. Your malt comes in a glass alongside a bonus amount in the silver mixing tin. The bartenders serve half of an ordered cocktail in a small glass alongside the other half on ice in a small carafe. After some months, the routine can be changed to omit the carafe. 
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Tuesday, December 18, 2012

Deemphasize the Unwanted Using Comparisons

Comparing product choices is easier for shoppers when they filter using the attributes—such as color, dimensions, or delivery delay—which fit their goals. Therefore, when you ask a shopper for her or his goal in making the purchase, use the answer to figure out which product attributes are of primary importance.
     In a study by researchers at University of Missouri, Mississippi State University, Emory University, and University of California-Irvine, most participants said that a granola bar was more like a candy bar than like a cup of fruit yogurt. But for the people who placed top priority on health goals, the granola bar was more like a cup of fruit yogurt. Those same health-oriented consumers said an apple was more like an orange than like a donut. But for the people who placed a higher priority on eating convenience than on eating healthy, the apple-donut similarity came up stronger.
      If you’re selling apples, donuts, and oranges, the health-oriented customers will be comparing the prices, the freshness, and other attributes of the apples with the oranges. The convenience-first customers will be doing an apple-donut comparison.
      If you’re selling flowerpots, statuary, and seed flats, the dedicated gardener looks for the flowerpots and seed flats to be in the same shopping area. The dedicated outdoor decorator wants to compare the aesthetic attributes of the flowerpots with the statuary.
      What if the products being considered have similar valued attributes? Researchers at University of Toronto find that when two options have some features in common, the shopper tends to ignore those features and place extra attention on valued attributes distinctive in each option. This selective attention carries over to additional choices shown afterwards to the shopper. Therefore, as a retailer, you can influence which valued attributes the shopper will emphasize in considerations: Start by showing two choice alternatives which share the valued attributes you prefer the shopper not emphasize.
      A shopper’s goals also determine attributes they dislike. Being produced by child labor, for instance. Research at University of Memphis and Indiana University assessed the situation where consumers are comparing two products which both have unwanted attributes, but each of the two has distinctive positive attributes. Again, the distinctive attributes get an emphasis. The consumer becomes less likely to consider the negative attributes in deciding among the alternatives. Here, also, this effect established with the comparison of two carries over to immediately subsequent comparisons.

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Monday, December 17, 2012

Add to Global Warming in Your Store

Whenever shoppers experience rejection or loneliness, they’re ready to buy physical warmth. They feel cooler than do people who aren’t lonely. Studies at Purdue University, Tilburg University, VU University, and University of Milano-Bicocca indicate this is because lonely people are, in fact, physically colder. Experimental subjects who were rejected as suitable partners in a game showed reduced body temperatures, and lonely people reported feeling more comfortable when asked to hold a cup of warm tea or coffee.
     Researchers at NUS Business School in Singapore and University of Florida-Gainesville postulate all this is due to lonely consumers being mammals. From when mammals are very young, any sign of negative emotions produces a desire to be held close to get warmed up.
     In our northern hemisphere, the “lonely customer” effect is greatest around the Christmas holidays, both because the weather is colder and because relations among family and friends gain prominence.
     What should you do? Bear hugs from staff probably won’t work with most shoppers entering your store. Cranking up the heater could burn through your profitability. There would be the fuel cost plus the risk of chasing off shoppers who aren’t feeling cold at all, yet prefer to keep their clothes on while browsing among your aisles, thank you.
     The way around this is to recognize that the research shows psychological warmth in a store also attracts lonely consumers. Romance them.
     Researchers at University of Colorado-Boulder and Hong Kong University of Science and Technology found that study participants who drank cold tea were more likely than those who drank warm tea to subsequently choose a romance movie over other sorts of movies. When another set of study participants were asked to sit in a room that was cold, this increased the tendency to select a romance movie.
     Next, the researchers matched dates of movie rental records with local temperature data. Sure enough, when it was cold, there was a shift from horror flicks toward romantic ones. The enhanced chances of getting a reassuring embrace when watching creature features wasn’t enough to compensate for the shivers up the spine.
     Does this mean you should flirt shamelessly or invite shoppers who look lonely to join you in a dance to your store’s background music? No, but it does mean you should romance the customer professionally. Psychological warmth in your store is a balminess few worrywarts would complain about if it spreads globally.

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

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Blanket the Cold with Romance 
Romance the Customer, But Professionally 
Get Customers In Touch with Each Other

Sunday, December 16, 2012

Warn Employees of Theft Audits

It’s bad when employees steal from you. How about when they steal from your customers?
     Researchers at Texas Christian University set up their experimental situation by leaving loose change inside a car brought to a full service car wash. In some of the cars, the researchers had also placed a copy of Maxim magazine with its photos of scantily dressed women, on the front seat and a crushed beer can on the floor. The research question was whether these cars had more money stolen than from debris-free cars.
     The findings: In the cleaner cars, cash was taken about a third of the time. In the cars with the magazine and crushed can, the thievery rate was about double.
     Why? The researchers’ answer is that employees at the car wash probably considered the drivers of cars with Maxim and beer as “deviant” and therefore more suitable to be victimized.
     One response I have to this is that all customers, even those who drink and gawk, deserve to be treated with integrity. Calling shoppers deviant becomes a license for prejudice.
     Another response I have to the findings is that those more likely to have money stolen may have been seen as messy, not morally deviant. Hey, you take your vehicle to the car wash for the full deal service and it looks like you didn’t even notice you left a beer can and magazine in the front seat. Odds are fair you won’t notice it if, while removing the can and closing the magazine, I also tidy up some of your loose change.
     “The money was asking to be taken,” some retail employees might say. After all, even in the non-Maxim, not-beer-can car, money was stolen a third of the time.
     Now let’s bring the discussion back to include the theft of merchandise or cash from you:
  • Keep the storage areas in your store unlocked only to the degree necessary. Require an employee who is thinking of stealing to acknowledge that the thievery will involve a series of dishonest steps. 
  • In training, periodically give evidence of how employee theft damages the organization. Do not discuss the topic at every training session, though. Research suggests the frequency makes thievery seem to your employees almost routinely expected. 
  • Inform employees you’ll be conducting surprise audits. At the car wash, employees could be told there will be “loose change temptation” checks from time to time. 
Click below for more: 
Psych Out Employee Theft 
Tally Tradeoffs in Paying for Honesty

Saturday, December 15, 2012

Get Them While They’re Hot!

Experienced outside salespeople know that contacting prospects promptly builds conversions to purchase. “The Ultimate Contact Strategy,” a report from lead management firm Leads360, dramatizes the power of this promptness. In their analysis of almost 3.5 million year 2012 leads from more than 400 companies, speed-to-initial-contact was the single largest determinant of prospect conversion. Telephoning an interested prospect within one hour of an inquiry improved lead conversion rates about 36%. Businesses making the initial telephone contact within one minute of an inquiry improved lead conversion rates almost 400%.
     It’s not that one phone call makes the sale. You might not even reach the prospect on the first attempt. Leads360 recommends telephoning up to six times. Half of all prospects that eventually convert are reached sometime after the first call attempt. Consistent with the other findings on promptness, the less the delay between a first and second call, the better the results.
     Adding an email to the mix also helps. The report recommends sending up to five emails during the first month after the prospect’s inquiry, when interleaved with telephone contacts.
     Researchers at lead management supplier, Harvard University, and Korea’s Sungkyunkwan University have also seen the significant advantages of responding quickly to consumer inquiries. They looked at internet contacts that could turn into leads for B2C (business-to-consumer) and B2B (business-to-business) sales.
     These researchers reported results from an audit of 2,241 U.S. companies. About 35% of the companies responded to consumer inquiries, on average, within one hour, but more than 45% took more than 24 hours to reply. The average response time to online inquiries was 42 hours. That’s understandable when you consider the likely reasons behind the finding:
  • Availability of internet inquiries at any time, but lack of knowledgeable staff around the clock and calendar 
  • The time consumed in referring the inquiry to the right person in the business to reply 
  • Allowance of time for the consumer to look over materials they’ve already received and for the retailer to prepare a knowledgeable reply 
     It’s understandable, but the effect is a striking loss of potential for profitability. U.S. firms that responded to inquiries within one hour were about sixty times as likely to move clearly toward a sale than those waiting 24 hours or longer.
     Respond to internet inquiries with immediate acknowledgements which include a commitment of when you will be back with a substantive answer. Then keep to the commitment.

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Tell Questioners Now When You’ll Answer

Friday, December 14, 2012

Fly Your Retailing to Stressful Settings

A recent New York Times piece discusses the successes retailers are having at airports. Anchor Brewing Company’s store at San Francisco International Airport, selling locally-branded beer glasses. Earth Spirit featuring handmade items at Denver International Airport.
     Consumers are attracted to these stores for their distinctive merchandise. But these and other airport shops also offer opportunities to relieve the stresses associated with air travel. Retail stores in hospitals serve a similar function.
     Researchers from London’s Imperial College Business School and Toronto’s Sunnybrook Health Sciences Centre surveyed more than 3,000 visitors and outpatients at a total of seven hospitals. About 70% of their respondents said that retail businesses in a hospital added great value to the consumers’ experiences under difficult circumstances. Around the same percentage said that a retailer’s presence at a hospital would make it more likely they’d purchase from that business at another location and speak positively to others about the retailer.
     What types of stores did the visitors and patients want? The types of places you could browse in: Clothing, electronics, bookstores. Hairdressers, where you can let yourself go and primp yourself up. Banks and grocery stores, where you can pass the time without feeling you’re wasting time.
     Here are a few tips for retailing in stressful settings:
  • Offer the consumer options for when to complete the purchase. This gives a sense of control that can in itself ease stress. If the customer who is told, “I can check out your purchases over here,” responds with, “I can wait,” the store staff response should be an understanding nod rather than a puzzled or irritated look. 
  • Graciously answer the same questions more than once. Some people deal with their anxiety by seeking more information or developing a plan for making a purchase. However, if the questioning seems to become a never-ending waste of your time, say, “You might want to think about it some more on your own and then get back to me.” 
  • Be ready for delay to become sudden action. Some people shiver at the side of the pool and then suddenly grit their teeth, think a happy thought, and jump into the freezing water. When that happens, let your customer quickly get into the swim and get it over with. At the Orlando International Airport Build-A-Bear store, limited edition souvenir items can be purchased by the shopper who runs out of time to construct a toy. 
Click below for more: 
Help People Pass the Time 
Learn from Setbacks by Using Educated Trials

Thursday, December 13, 2012

Position the Logo Like a Handshake

Merchandise in your store which carries a logo or label associated with prestige—such as Lacoste—can command premium prices because shoppers assume they’ll receive greater respect when others observe the logo. However, you might decide to stock items where the logo is not obviously displayed.
     The shoppers who assume they’ll get more respect are correct, to a point. Researchers at Tilburg University found that a man shown wearing a Lacoste or Tommy Hilfiger polo shirt was judged by study participants to be of higher status and wealthier than the same man wearing a no-label shirt, although the label didn’t make a difference on ratings for kindness, trustworthiness, or attractiveness.
     In another study by the same researchers, people were more willing to comply with someone wearing a prestige logo. Mall shoppers walking alone were approached by a woman asking for survey participation. In some cases, the woman wore a green sweater with a Tommy Hilfiger logo, while in the rest of the cases, the woman wore the identical green sweater devoid of logo. Did it make a difference? Well, about 52% of the people in the logo condition agreed to participate. Sans logo, the woman was able to convince only about 14%.
     The luxury logo served like a hearty handshake.
     Yet there are consumers who prefer a secret handshake. Researchers at University of Pennsylvania and Southern Methodist University note how consumers of very high-end products often prefer subtle, not obvious, signals in their purchases. Consider sunglasses. The researcher’s tally found that about 20% of sunglasses selling for under $50 included a brand name or logo easily visible to others. That increased to about 85% when the retail price was between $100 and $300, but for sunglasses selling above the $500 mark, the percentage dropped dramatically. It was only about 30%.
     Consumers who sense themselves coming closer to desired membership in a group, but who are insecure about their membership, tend to purchase products that loudly project the signals of membership. But when the consumer already belongs to an exclusive group or is confidently aspiring to belong, they’ll be looking for more subtle cues—what corresponds to the secret handshake which allows members to recognize each other while not tipping off the outsiders. This was a lesson learned some years back by Lacoste, which discovered that their crocodile logo stopped portraying as much status if it was displayed too prominently.

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

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Satisfy Desires for Luxury 
Make Your Shoppers Feel Special 
Offer Aspirational Shoppers Subtle Signals

Wednesday, December 12, 2012

Reach Out to Credit Fraudulent Charges

Optimism is a valuable personality trait in retailers. But regarding fraudulent credit card charges to your customers, the National Retail Federation recommends you have the attitude, “It’s even worse than I thought.”
     According to a comprehensive analysis by LexisNexis Risk Solutions and Javelin Strategy & Research, for every $100 of actual fraud of all types, there is $270 of total fraud loss to the retailer. Understandably, among the items accounting for this exploded expense are ruptured customer relationships following phony credit card charges.
     About 33% of customers who have had to remedy a fraudulent charge on their account will completely stop shopping with the merchant, even though the debit will be readily cancelled by the merchant’s or cardholder’s bank. Missing from that $270-for-every-$100 figure is the cost in time and worry for the consumer in taking care it. Oh my, it’s even worse than you thought, retailer!
     To diminish the outlay, reach out to consumers who have been defrauded. Apologize for the bother, explain why the fraud is unlikely to happen again, and offer an incentive for continuing to shop with you.
     Even if not abandoning you, defrauded consumers often take actions which impede a smooth business relationship. Specifically, 37% avoid online registrations requiring personal information and 20% spend less money.
     The chief culprit in credit card fraud is CNP—Card Not Present. These are the transactions the customer makes without the merchant swiping the physical card. Decades ago, CNP consisted of telephone transactions. Then internet transactions from home were added, and now there’s growth in payments made in-store using mobile devices.
     When the consumer discovers a fraudulent charge, they feel that their safety has been violated. This psychological state is worse if the consumer discovers a fraudulent charge from the past. In the Regus scam which operated from 2006 to 2010, only one-tenth of the fraudulent charges were reported by the card owner before the Federal Trade Commission uncovered the fraud.
     The NRF recommendation to you, derived from the LexisNexis/Javelin conclusions, is to be a “fraud fatalist.” Assume you’ll be cheated. However, I prefer to word the recommendation as being a “fraud realist.” Assume, as part of doing business, you must implement increasingly sophisticated methods to curb fraud of all kinds and that you must account for the costs of fraud in your profitability projections. Some of those costs could include reaching out assertively to your defrauded customers.

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Trick Me Once, I’m Outta Here 
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Tuesday, December 11, 2012

Craft the Investment Appeal of Art Items

Who is the richest artist in the world?
     Bloomberg Businessweek says it’s Damien Hirst, and that the skilled retailing of Mr. Hirst’s artwork by dealers and then unskilled retailing by Mr. Hirst himself have greatly influenced the extent and limitations of his wealth.
     This BBW analysis of the fine art market yields tips for a range of retailers.
     Consumer researchers distinguish between arts and crafts. We value a craft product because of the beauty with which it performs some function, such as protecting the tabletop or holding the toilet paper. The value to the shopper of an art object arises solely from the emotional reaction generated by experiencing the object itself. The emotion might be joy or grief, but to meet the consumer researcher’s strict definition, the joy or grief would need to arise from more than thinking about how the art object will appreciate in value over the next five years or how little it’s worth now that it was damaged by last night’s house fire.
     In the real world, however, many consumers buy fine art as a financial investment. The BBW article reports that during the decade of the 2000s, the annual rate of return for contemporary art was about 13%. For the same period, the Standard and Poor’s 500-stock index dropped about 6% per year, on average.
     Here are seemingly opposite ways fine art can improve your profitability:
  • Buy and sell scarce art objects, gaining a commission on each sale. It’s not unusual for a dealer to keep half the proceeds of a sale of fine art, although Mr. Hirst’s popularity in top demand years allowed his agent to negotiate the dealer’s cut down to as little as 10%. Tips for dealers include carefully tracking trends, learning to identify quality in each product category you carry, and negotiating sharply with suppliers. Those tips apply to retailing items well beyond fine art, don’t they? 
  • Sell quantities of abundant fine art. Mr. Hirst maintains a factory to produce versions of his fine art works. This served him well in 2008 when at a Sotheby’s auction, he had 223 lots on the block. But in more recent years, there’s been a dramatic drop in the resale prices of Mr. Hirst’s work. BBW attributes it to flooding the market. As in other retailing endeavors, the key skill is maintaining the right level of abundance, which is a matter of timing. 
For your profitability: Sell Well: What Really Moves Your Shoppers

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Hook Experts on Scarcity 
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Monday, December 10, 2012

Impact Shoppers with Creative Repetition

Hard to believe that it’s been almost eight years since Robert Kearns passed away. He’s the guy who invented the intermittent windshield wiper system. I’m told that at the funeral there wasn’t a dry eye in the place. Then there was. Then there wasn’t. Then there was.
     As with intermittent windshield wiper systems, repetition by a retailer is valuable. Repeat the benefits of a product to a shopper often enough and the shopper becomes convinced what you are saying is true. The effect is so well-established by decades of research that consumer psychologists use the term “truth effect” to refer to it.
     But unlike with the identical repetition of Mr. Kearn’s invention, the retailer’s repetition works best if the product benefits, selling points, or usage instructions are presented in different ways.
     If you deliver an identical message again and again and again, the shopper might come to believe it, but at some point, they also start disliking you and the product. Consumer psychologists have a name for this one, too: Wear out. Wear out is more likely when the shopper is carefully evaluating what you’re saying. That’s why many TV ads can get away with rote repetition: Nobody’s listening very carefully.
     When people shop together, their memories for what a salesperson tells them tends to be inferior to what they remember when they’re shopping as individuals. So repeat the information more often when selling to a group. Organizational researchers at Northwestern University found supervisors of employees over whom they lack formal power do best when keeping the message consistent and varying the modality of delivery—a conversation followed by an email.
     Research at Baruch College has refined some assumptions about what gives the best payback for a retailer’s advertising dollars when running a series of text ads: Each ad should show movement forward from the prior ad. This is more effective than a campaign that repeats all the same content in each ad. However, in each ad, use some of the same elements that relate to the theme of the campaign.
     Even lessons from foolish jokes are remembered better when variations on a theme. Want an example? Okay:
     When Larry LaPrise, who wrote the children’s dance classic “The Hokey Pokey,” died, things were more complicated than with Mr. Kearn’s passing. While transferring Mr. LaPrise to his coffin, they put his right foot in, and that’s about when trouble started.

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Repeat the Truth in Different Ways

Sunday, December 9, 2012

Elucidate with Close Business Friends

It pays for your customers to consider you to have what University of Geneva researchers call a “close business attachment.” These customers develop personal bonds with the retailer and are comfortable exchanging information about family and friends. This goes beyond “secure business attachment,” in which the relationship is limited to depending on the retailer for quick answers to questions about purchases.
     Researchers at Nanyang Technological University in Singapore found that, in their studies, consumers who considered themselves to be 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 others, the reaction was anger at being betrayed by a friend.
     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 a close business attachment, there was more likely to be customer empathy for the owner’s needs.
     Does it matter that all these studies were done with consumers in Asian cultures? Asians place higher significance on personal relationships with a merchant than do North American consumers. Still, researchers at University of Toronto obtained compatible findings. Respondents in their study who had a friend-of-the-family type relationship and donated one hour were more comfortable getting a $15 discount at a health club than an hour class. They thought that friends deserve to make choices. Those considering themselves to be no more than acquaintances were more comfortable getting the free class.

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Clarify Expectations with Friendship Customers

Saturday, December 8, 2012

Look at Sex to Curb Showrooming

Results from the “2012 Kellogg Shopper Index,” based at Northwestern University, indicate that your attention to consumer gender can help curb showrooming.
     Men who have achieved advanced education levels and earn higher incomes like the money saved by showrooming. They’ll come into your bricks-and-mortar (B&M) store, drain the brains of you and your staff for advice and training, and then leave your store to make the purchase online. Or maybe not even leave your store, but rather use a mobile phone to scan the UPC code from a package on your store’s shelves and place the online order while standing right there.
     The men’s preferences are not as sensitive to the quality of B&M customer service as are the preferences of women shoppers. The Kellogg finding is that, although female shoppers are also attracted by the price advantages of showrooming, they prefer the high touch atmosphere of B&M. It’s when they receive poor customer service that they abandon loyalty to B&M.
     Of the survey panel participants who reported having engaged in showrooming, 40% said they didn’t intend to do so when entering the store, but decided to do it after experiencing inadequate customer service and support. About 59% of all 1,900 survey panel participants said they’d received poor or average service.
     The implication for retailers is that you can achieve notable leverage in decreasing showrooming by determining how your female shoppers define customer service and support, and then delivering in full measure.
     How those women define customer service might differ from how you or your staff define it. Research at University of New South Wales indicates that retail staff have one or more of three sorts of definitions:
  • Giving customers what they ask for in a minimum of time and with a maximum of courtesy. 
  • Solving a problem with or for the customer so that a bond between the customer and the store is formed or strengthened, making it more likely the customer will want to return soon and often to the store. 
  • Selling products and services. 
     The first two definitions sound fine, although the means to accomplish each could vary between the two. The third confuses ends with means. Employees who define customer service as meeting sales quotas might have low trust in store management. Or it could be that store management gives no more than lip service to delivering what shoppers consider to be good customer service.

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Showboat a Bit with Showrooming Shoppers 
Define Customer Service for Your People

Friday, December 7, 2012

Wish Lists Build Sales

Make a wish for the holidays that your sales will increase as children include on their gift lists items your store carries. Then go beyond wishing to have it happen.
     By at least one measure, parents are more optimistic than their children about loot on the lists making it into holiday closet hiding: About 62% of kids ages 3 to 11 think they’ll get more toys if they’re well-behaved throughout the year. However, 78% of their parents say they’ll buy the same number of toys regardless of the child’s behavior. That’s according to the “Talking Holiday Toys Survey” sponsored by Walmart Stores and using the GfK Public Affairs & Corporate Communications KnowledgePanel.
     As for the holiday closet, it’s the most popular single hiding place, although with this one, the kids do outfox the parents: About 14% of the moms and dads say the kids found their gifts in advance, while 23% of the kids report having made early discoveries.
     What do the kids think maximize the odds of getting items from the list? Nagging. And the parents agree, calling the technique, “kids asking repeatedly.” So when kids and parents are in your store, provide places and opportunities for the children to emphasize their wishes.
     Your odds of building wish list sales are greater when you’re tracking trends in toys and games. Probably, the die has already been cast for you stocking on shelves the hot toy stocking stuffers. But whatever merchandise you have, you can aim to frame it to fit the themes of these trends, which kicked off last year at the Toy Industry Association trade show:
  • Nonstop activity. Kids now like engaging in simultaneous independent play. It’s the difference between Scrabble and Bananagrams. Similar trends include multitasking instead of waiting your turn, cooperative play rather than independent play, and game rules which emphasize speed. 
  • Internet influence. The tangible integrates with the virtual. More toys work with apps, and virtual world games allow for online links. Another strand is the increase in the number and variety of miniature versions, reflecting the consumer’s attraction to the portability associated with mobile electronics devices. 
  • Exercise. Adults are listening to the warnings about childhood obesity and so want items which encourage physical activity. There are more sports, dance, and active role-play offerings. Still, brain exercise is all the rage, as well. Tell how your merchandise and services foster logic and strategic thinking. 
Click below for more: 
Look to Toys & Games for Retailing Trends 
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Convince Kids that Healthy Has Authority

Thursday, December 6, 2012

Interpret Flawed Price Memory as Satisfaction

When your customers are highly satisfied, they’re more likely to say the price they paid was fair. It turns out that one reason for this could be that highly satisfied customers don’t remember well what they paid. Researchers at University of Mannheim, University of Nuremberg-Erlangen, and RWE Consulting GmbH say it’s a function of time since the purchase.
  • Shortly after making the purchase, the consumer who experiences high satisfaction with the product and the retail experience might recall the price quite accurately. Then the memory of the precise price fades. 
  • It’s the memory for the actual price which fades. The sense of whether the price was high, medium, or low, fair or unfair, stays much the same as the time between purchase and recollection increases. 
  • With lower levels of satisfaction, any memory for the actual price doesn’t fade as much with the passage of time. 
     Putting this together, it appears that one indication customers are highly satisfied is that, when they return to your store, their memories for the precise prices previously paid for items is somewhat fuzzy. Customer satisfaction is, in turn, an opening for you to offer the returning shoppers upgraded opportunities to buy what will fit their needs. The fuzzy memory facilitates acceptance of increased price points and shopping basket totals.
     Satisfaction also increases the chances your customer will tell friends and family they should purchase the items for themselves at your store. In response, a question from these others could easily be, “How much did you pay for it?”
     Researchers at University of Alberta, University of Calgary, and University of British Columbia found that when people believe they might have been able to wrangle a better deal on a product or service, this conclusion leads to them feeling a threat to their self-esteem and their self-image. They fear not only that others will see them as being suckers, but also that they’ll see themselves that way. So they lie, intentionally or unintentionally.
     Since a natural follow-up question is, “Where did you get such a good price?,” you—the retailer—should expect people to come into your store expecting deals you’re not offering.
     How nice to have them come to your store! Be ready to turn the new shopper’s confusion about pricing into conviction to make a purchase from you. Show what you do have to offer, renewing the cycle of high satisfaction and fuzzy memories.

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

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Expect Shoppers to Expect Nonexistent Discounts