Shelve Self-Control with Risk Mates

Texas A&M University and Vanderbilt University researchers randomly paired study participants, asked each pair to review a short film, and put a bowl of jelly beans on a table between the two reviewers.
     How did the degree of candy gobbling affect the relationship between the study participants?
     It turned out that when each of the pair perceived that the two of them had eaten more jelly beans than was prudent, the two felt closer to each other than for those pairs in which the transgression hadn’t been shared.
     People who feel close influence each other’s consumer decisions. That’s true with minor vices such as eating jelly beans in casual relationships such as random assignment. It’s also true with serious risk-taking and serious relationships.
      When both members of a married couple exhibit high self-control in other realms, they show caution in their purchases. However, when one member shows high self-control and the other member, low self-control, the low self-control prevail. The pair made riskier financial decisions.
     In deciding whether to make a purchase, each shopper consciously or subconsciously weighs the risks. Of the various types of risk, two are called “social” and “psychological” by consumer psychologists.

• Social risk: “If the people I admire know I’m using this product or service, am I in danger of falling out of favor with them?”
• Psychological risk: “Does using this product or service conflict with the image I want to maintain of myself?”

     A retailer can address the social risk by encouraging shoppers to bring along their friends. As to psychological risk, research indicates that having shoppers bring along the household is a help.
     The friends or family don’t even need to be there with the shopper in order to exert an effect. A marketing researcher and a psychologist at Umeå University in Sweden explored what influences a value-laden innovative purchase decision—buying a vehicle that uses electricity and biofuels instead of fossil fuel gasoline.
     Not surprisingly, the study found that one major determinant was the nature of the consumer’s values regarding protection of the environment. Those wanting to maintain an image of themselves as guardians of the environment were more likely to buy.
     Still, another determinant was the size of the consumer’s household. Those living in multi-person households were more likely to take the risk of buying the innovative vehicle.

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Expand Via Related Links

Why did Friendster fail?
     Business researchers at Harvard University and Bank of Canada claim it was because of poor expansion. Friendster, a predecessor of Facebook and begun on a similar business model, opened up recruitment to anybody who was interested. The result was participation by consumers who often found too little in common with each other. The social networking magic floundered, and so did Friendster.
     Facebook, by contrast, started out by targeting college students and, only when there were enough of those on board, expanding to people who were like college students, and then progressively expanding further to target markets with characteristics similar to those of Facebook’s current consumer base.
     In your retail operations, expand this way. Certainly, do pursue weak links. Say to your satisfied customers, “Recommend us to your friends,” and also, “Recommend those friends talk about us to their friends.” But do it in this way because friends of friends are likely to be similar to the recommender in some ways. They are what the business researchers call “adjacent markets.”
     “Friendship is born at that moment when one person says to another: ‘What! You too? I thought I was the only one.’” So wrote C. S. Lewis, well-known to many as the author of The Lion, the Witch and the Wardrobe.
     To better fit the realm of retailing, I’ll tweak the C. S. Lewis quote to read, “A customer referral relationship is born at that moment when the consumer says about the retailer: ‘What! I’m thinking there are many others who, like me, could benefit from all you offer. I’m far from being the only one.’”
     You might even want to take the initiative in discouraging customers who don’t belong. Some years ago, Kelvin MacKenzie, then editor of The Sun, Britain’s best-selling tabloid, received news that a reader had become so outraged with the paper he was thinking of cancelling his subscription.
     Mr. MacKenzie took no chances. He notified the subscriber that the man was now banned from not only subscribing to, but also reading from,The Sun ever again.
     This story brought to my mind another anecdote, told by comedian Groucho Marx about a possible cancellation of his club membership. As Groucho relates that tale in Groucho and Me, “I sent the club a wire stating, ‘Please accept my resignation. I don't want to belong to any club that will accept me as a member.’”

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

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Read Kit Yarrow’s New Book

Had consumer psychologist Kit Yarrow not quoted me in her latest book, Decoding the New Consumer Mind, I’d still recommend retailers get the book and carefully consider her analyses. Kit nicely identifies what’s trending in consumers’ psyches. (She says “trending” does a better job than “trend” for portraying the rapidity of changes in those psyches.)
      In her text, Kit does seem to have a special fascination with C: “...(F)our major opportunities to involve your customer…. Handily, each begins with the letter C. They are Champions, Customization, Crowdsourcing, Contests.” And in introducing examples earlier, Kit writes: “(W)hat do Cowgirl Creamery, Coors, and Campbell’s have in common besides the letter C?”
      Never mind the bias as long as Kit attends to the really Big C—the Consumer. She pulls together a range of research conclusions and brief case studies which will stimulate retailers’ thinking about how to improve profitability.
      The pages she spends discussing the effects of technology on the consumer introduce little that informed retailers don’t know already in abundance. But of great value is her discerning and documenting the emergence in today’s consumer of rampant narcissism. “Narcissism” doesn’t begin with that special letter, so perhaps, for consistency, it should be “C for Centered on Self.” Your shoppers are more self-centered than in the past and walk into your store accompanied by a compelling sense of entitlement.
      I do find an unevenness in the credibility of Kit’s sources. She takes findings from carefully done peer-reviewed experimental research, then mixes in stories of her own qualitative inquiries and what seem to be rough, anecdotal estimates from others, those estimates claiming credibility principally on having been repeated often enough. The result is the occasional silly statistic showing no visible means of support: “Today more than 80 percent of online content is user generated.”
      Also, the text veers too close to a position that none of the old rules apply anymore. This might have been helpful in justifying the “New” in the book’s title. However, it’s a view which lacks adequate credibility for experienced, perspicacious business people.
      It’s easy to put aside my nitpicking, though, when Kit’s analyzing why ready-to-eat popcorn sales are growing faster than microwave popcorn sales, and the implications for shopper wait times. Or how a Facebook “Like” given for the most shallow of reasons becomes more genuine just because of having been given.
      Read the book. C for yourself.

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

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Cue Indulgence with Cute

Products, product containers, signage, and store décor that portray playful cuteness increase shoppers’ urges to indulge themselves and others.
     Researchers at Boston College and Florida State University found that consumers given a cute-looking ice cream scoop served themselves bigger helpings than did consumers given a plain scoop. Study subjects who were provided a cute-looking stapler were more likely to say they’d use the stapler for arts and crafts projects than did those subjects given a plain-looking stapler. Those with the plain stapler talked more about work-related projects.
     Experiments at Claremont Graduate University found that seeing something cute sets off the release into our brain of a substance called oxytocin, which has been called “the love hormone.” That hormone increases our willingness to spend money if we believe it will be helpful to others—such as helpful to people for whom we’ll buy a gift or the salespeople from whom we’ll buy it.
     Moreover, with the tendency toward consumer self-gifting, oxytocin also frees up the urges to indulge ourselves. A marketing line used by Macy’s late last year was, “This holiday season, get an unforgettable gift for a loved one (or yourself).”
     The Boston/Florida researchers considered chubby cheeks and large eyes as qualifying features for cuteness. Other consumer studies find that hints of children, such as toys or even pictures of toys, are interpreted as cuteness, with the indulgence-activating benefits which follow.
     The Boston/Florida researchers also pointed out that their results seem to contradict a set of earlier studies which concluded that cuteness cues led to shoppers becoming more restrained in their behavior, exhibiting the opposite of the effusiveness we associate with indulgence.
     I think the puzzle’s solution is that the caution stimulated by cuteness takes the form of caring about the effects of our behavior. Researchers at Harvard University and University of North Carolina found that adults behaved themselves better when in environments where childhood playthings—such as teddy bears and crayons—were around. In the study, participants doing their tasks around the playthings lied less and were nicer to each other than were those in surroundings lacking items associated with childhood. For instance, the frequency of cheating dropped almost 20%.
     The implications for retailing? If you’ve childhood cues in your store, then shoppers are at least slightly less likely to yell at each other or steal the merchandise. They’re also likely to put more indulgences into their baskets.

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Funnel Purchase Alternatives Maturely

Categorize products for shoppers. Researchers at Stanford University and Columbia University say that categories enhance an empowering sense of control by allowing the consumers to give reasons to themselves for the choices they’re making.
     For foods and beverages, the categories might be by taste (coffees are mild, dark roast, or nutty). For clothing the categories might be by usage occasion (leisure, office, party). For items such as power tools and sports equipment, the categories might be by level of expertise recommended.
     Realize that labeling items by category can have different results than physically positioning items by category: Researchers at Georgia State University and Columbia University asked study participants to select food items from menus resembling those seen at chain restaurants. For some of the participants, calorie information was included for each item and all of the low-calorie items were listed together on the menu. For a second group of participants, the calorie information was included, but the low-calorie items were interspersed among the other alternatives rather than appearing in a separate section. For the third set of participants, too, there was no separate grouping of the low-calorie items. In fact, for this third set, no information about calories was included on the menu.
     The group given calorie information, but with the low-calorie items interspersed, ordered meals with lower calories overall than did the those with no calorie information on the menu. However, this was not true for diners in the group who had all the low-calorie items placed together on the menu. They were as likely as those in the no-calorie-information group to order the higher-calorie items.
     Why was this, and what does it mean for the categorization method in your store?
     Shoppers are attracted to retail establishments which provide many alternatives, but those shoppers want to be able to easily narrow down the choices. Diners looking at menus with a low-calorie section often start out by dismissing all the low-calorie items first. The reputation of low-calorie is that of being lacking in taste and leaving one feeling hungry. So it’s easy to initially jettison this entire category.
     But when the choices were categorized without separation, the initial filter was more likely to be, “What do I feel like eating?” Low-calorie items stayed in the consideration set longer and were therefore more likely to be ultimately ordered.
     Don’t move too far ahead of your shopper. Funnel down purchase alternatives maturely, never prematurely.

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

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