Book Tours of Your Esteemed Merchandise

When offering high-end merchandise at healthy margins, you’d like to broaden your market, but not jeopardize the merchandise’s prestige image. A demonstration of the risk and a way to avoid it are offered by a Harvard University experiment.
     The researchers used as their study sample owners of Prada handbags. All the participants were asked to consider a situation where every visitor to a boutique shop was offered, at no charge, a luxury-quality shopping bag graced with the Prada logo. Then one group of the study participants were also told that accepting the shopping bag led to the consumer admiring the Prada brand. The other group of study participants were told, instead, that accepting the shopping bag led to the consumer feeling like a part of the Prada community.
     Next, the study participants were asked what effect they thought the distribution of the shopping bags had on the Prada brand image. The group who’d been told the recipients admired the brand said the gifting had raised the image. These Prada handbag owners said they now had even more pride in their ownership.
     This finding would be expected. However, the other group said they thought the gifting cheapened the image of the brand. Having people consider themselves part of the luxury community without making a luxury purchase had that effect.
     The researchers called the first group “brand tourists” and the second group “brand immigrants.” Other studies found similar results. When potential purchasers of an esteemed item are invited to accept what is clearly understood by all to be a sample given to an outsider who’s just looking, the esteem of the item remains undisturbed and might be enhanced. But if you drop the border restrictions on immigrants, there’s a danger.
     Another study, this one at University of London and Harvard University, analyzed the effects of opening the gates to Ironman. The Ironman events are esteemed for their rigorous physical challenges. When a private equity firm purchased the rights to the Ironman name, they decided that registrants who completed a half-Ironman race also could claim the designation “Ironman.” In addition, permission to use the Ironman branding was awarded to providers of a jogging stroller, a mattress, and a cologne.
     Warning of a dire decay in the brand image, a coalition of Ironmen quickly and successfully pressured for a reversal. A parallel sequence occurred when luxury fashion house Burberry started carrying dog leashes.

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Stay Ready to Sell Luxury 
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Label Freebies as Samples

Intercept Shoppers Fruitfully

Business researchers define the “interception rate” as the percentage of consumers entering a shop who are spoken to by a salesperson working for that shop. “Interception” makes it sound like the salesperson is blocking the shopper’s path, which is a pretty bad way to earn good will. However, the idea of attending to fruitful contact with each shopper is an important one. Such contact enhances the probability of closing a sale and convincing the customer to return to the store.
     Researchers at Justus Liebig University and Zeppelin University, in Germany, set out to find what leads shoppers to initiate consultation with a salesperson. They began by verifying that, in fact, salesperson contact is positively related to the amount of money the shopper ends up spending on that store visit.
     The researchers then identified major motivators for consultation:

• Some of the motivators are just what you’d expect. For instance, the shopper knows what they want, but isn’t sure which of the available alternatives to select. Check that you and your staff are easily available on the sales floor and that the available staff either have the knowledge to answer shopper questions or know where to fetch the answers. But even here, the research findings provide a twist: To raise the interception rate, be able to sense how much time and mental energy the shopper wants to spend considering the shopping decision. If a shopper fears that you’ll be giving too much information, they’ll avoid asking you. 
• Other of the motivators make sense when you think about them, but you might not have been thinking about them. For instance, the shopper is finding the store visit enjoyable, and so is open to visiting with the store staff. Create within the minds of your shoppers an image of what consumer researchers call “a third place.” This is an environment in addition to home and work which is appealing because it feels comfortable. Give an authentic sense of family to your customers. Some retail consultants say, “Make our customers feel like family.” I prefer, “Give a sense of family,” because research findings seem clear that for maximum profitability, you want to be sure to keep the interactions as a business relationship. Don’t promise more than you’ll deliver. That wouldn’t be authentic. Related to this, the store doesn’t need to be fancy. Actually, a fancy ambiance can cause the whole experience to seem inauthentic. 

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Number the Attractions for Attraction Effects

To unfreeze a shopper’s indecisiveness when choosing between two alternatives, you can introduce a third alternative which is clearly similar to one of the others on an attribute important to the shopper and also clearly inferior on another attribute important to the shopper.
     For example, suppose a customer wanting to purchase an electric lawn mower tells you she can’t decide between the one that’s more powerful on hills and the one that’s cordless. You now know two attributes important to this shopper. You’ve also noticed she says she doesn’t have lots of space in which to store a mower. So to unfreeze her decision making, you show her a corded mower which is powerful on hills, but is wider than either of the other two. As a result, she selects the one that’s powerful on hills, but is more narrow.
     Consumer psychologists call this phenomenon the “decoy effect” or “attraction effect.” Studies have verified that the attraction effect operates with consumers choosing among microwave ovens, television sets, cars, apartments, beers, airline tickets, and even political candidates.
     According to Yale University and National University of Singapore researchers, the power of the attraction effect depends on how attributes are presented to the consumer. It works best when the salesperson describes the attributes using numbers, such as a toaster oven with a durability rating of 7 and ease-of-cleaning rating of 5, both on a 10-point scale. It works least well when the consumer actually tries out using the alternatives.
     With the toaster oven, the shopper for whom ease of cleaning is important probably won’t have a chance to actually experience this at the store, so the attraction effect should be at its best. But for that lawn mower shopper for whom ease of storage is important, she can experience the width right there in the store, so the attraction effect would be weaker.
     The attraction effect is likely to be strongest with experience and post-experience goods and weakest with search goods.
     Search goods have features, the value of which can be relatively easily assessed before purchase. A refrigerator and a car are search goods.
     The values of experience goods are more difficult for the shopper to assess until they’ve been used. An insurance policy or unfamiliar food is an experience good.
     Vitamin pills and investment portfolios are examples of post-experience goods, where it’s hard to accurately evaluate the advantages even after use.

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Impress from the First

Shoppers are greatly influenced by what happens early on. First impressions set the scene. This is true to some extent for all consumers and, for people shopping in a group, the initial sights, sounds, and smells have a greater effect on the probability of return visits than do the experiences when paying for their purchases, exiting the store, or finding the car in the parking lot.
     First impressions have such a lasting impact that even if your store is remodeled, greater sales increases occur for new customers’ initial visits than for those customers who were accustomed to shopping with you before the remodeling. Researchers at Monash University assessed the trends in store visit frequency and spend-per-visit in a set of stores that had undergone major remodeling and a set of similar stores that had not. They found that for both new and existing customers, the remodeling increased sales revenues. Yes, renewed first impressions did stimulate the old customers. However, over the subsequent year, the returns were greater for the new than for the existing customers in the remodeled stores.
     In one of these stores, the researchers measured the customers’ psychological responses to the remodeling. New customers had a greater draw to the store than did existing customers because the visit was for the new customers, more of an opportunity to develop first impressions.
     Retail staff may fail to recognize that how each of them interacts with the shopper influences how the shopper interprets the interactions with staff they encounter next. Let’s say a sales clerk looks up at the approaching shopper and smiles gently. If that event had been preceded by a sincere greeting from the cashier as the shopper entered the store, the shopper is likely to consider the salesperson’s smile to be sincere and welcoming. This is less likely if the shopper had received no more than a cold stare from the cashier when entering the store.
     But if the first impressions are not as positive as you’d like, you could be able to rescue the situation, according to research findings at Washington University in St. Louis, University of California-San Diego, and University of Florida. They found that later experiences can be made to seem like firsts for a consumer. In one of their studies, an online review which came late in the sequence gained greater impact when presented as “the first review of the new year.”

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Track the Trajectory of In-Store Impressions
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Appeal to Nostalgia

Nostalgia appeals loosen the consumer’s purse strings.
     Researchers at University of Minnesota, University of Southampton, and Grenoble École de Management asked each study participant in one group, selected at random, to think about their past. The remaining study participants were asked to think about recent or future events. Then each study participant was asked how much they’d pay for a set of items which were described by the researchers. The group who’d been asked to think about their personal past came in with higher bids overall.
     In additional studies by the researchers, activating nostalgic thoughts resulted in a higher willingness to spend money to stop an annoying noise and to share rewards with others.
     Consumer behavior experts from Arizona State University and Erasmus University in the Netherlands conclude that when adults are feeling lonely, they become more interested in nostalgia.
      Study participants played a ball-tossing game on a computer. The game was rigged so that some participants were told they’d been eliminated. Dropped participants were more likely to say that belonging is important to them. And they also made more consumer choices which reminded them of their personal history. This included preferences in cars, food brands, TV shows, movies, and shower soap.
     “New and improved” has been a mainstay of retail marketing for forever. And “Been there, done that” easily makes top ten lists of trite phrases. Still, researchers at American University, University of Arizona, and Northwestern University mused on why people will sometimes read the same book a number of times, watch the same movie repeatedly, or go back to the same place and do the same things again.
     Analyzing in-depth interviews with consumers in the U.S. and in New Zealand, the researchers identified a set of explanations:

• People refresh their memories for favorite experiences 
• They seek out details they missed before due to the limitations of human attention 
• They want to give the item another chance for a positive impression because of others being surprised at their report of a prior negative experience 
• They’ll enjoy being there while friends encounter the movie or destination for the first time 

     Novelty has a major appeal for shoppers, and so does nostalgia. The nostalgia appeal in recent shopping seasons may be due to feelings of social uncertainty from the economic downturn. The appeal of nostalgia may wax and wane, but it’s always in vogue as at least a niche market.

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

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Prolong Your Reputation as Cutting Edge 
Enable Shoppers to Revisit the Already Done 
Isolate Loneliness & Materialism 
Record Pleasures of Limited-Supply Nostalgia 
Keep Up-to-Date with Nostalgia Appeals