Monday, June 29, 2015

Bulk Up on Chunky Outliers

Statistical outliers are data points that don’t fit in with the majority patterns. It might be the group of consumers in a National Retail Federation survey who say they purchase gifts well in advance of need. Or it could be the shoppers in a sporting goods trade publication report who say they’re having trouble finding lacrosse equipment. When that group is statistically chunky—the frequency is high enough, even if not large—it could be a niche market for the small to midsize business, and targeting to a niche is how many such businesses thrive when competing against larger ones.
     Be sure your niche is defined by what shoppers want. That sounds obvious, and it is. Still, I’ve seen retailers fail because they choose as their niche something they enjoy doing, failing to sufficiently attend to the preferences of their target populations.
     Update your niches whenever necessary. Consumers are drifting from the general to the specific, from the one-size-fits-all to the specialty and the customized. In introducing niches, reach out with a line extension and then pull in and eliminate your weaker lines. Avoid abrupt changes in your merchandise mix unless one of your niches is itself defined as always having something new for the customer to consider, as Grocery Outlet and Cost Plus World Market do.
     To bring what you love to offer your marketplace closer to what the marketplace wants, cultivate the desire for the niches. Show customers what you think they should be hungry for, then evaluate how thoroughly they buy your pitch and your products. As you do this well, you’ll be creating your own chunky outliers.
     If you’re looking for chunky outliers in data sets compiled by others, be sure to explore what’s behind the numbers. One of my favorite examples of the reason for this comes from a BloombergBusiness article that said Deutsche Lufthansa AG’s Frankfurt airline facility transported 110 million animals in one year. This was more than the 106 million people carried by all Lufthansa units together during the same period.
     Is the airline primarily an animal freight company? Not really. Of the 110 million, 80 million were tropical fish. That leaves dogs, cats, and race horses. Yet less than 2% of Lufthansa’s total cargo revenue comes from transporting the creatures, and cargo revenue is but a part of the airline’s total. 
     Lufthansa can accurately say they’re primarily a passenger carrier.

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

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Define Your Niches by Your Shoppers’ Desires
Reflect Carefully on Marketing to the Mirror
Explore What’s Behind the Numbers

Thursday, June 25, 2015

Sensitize to Waste for Abnormal Produce

Historically, stores selling fruits and vegetables would prune out or send to the bargain basement unusually shaped produce. In the 1930’s, California orange packinghouses created special designations for fruit that was small or off-color. The lower-grade items had labels with names like Mutt and Camouflage. Still, the growers wanted to help retailers sell the fruit rather than having it put to waste. So taglines were developed: “The Quality is Inside.” “Not much for looks, but ripe, sweet, & juicy.”
     Now California farmers, who are a major supplier of fruits and vegetables to retailers throughout America and beyond, are finding it more challenging to select out oddly shaped items. Because of the severe drought in the state, crop yields may drop. There’s absolutely no taste for waste. At the same time, having less water for irrigation can affect the appearance of the produce.
     Results from a research project at Denmark’s Aarhus University suggest a way to increase retail sales of abnormally shaped food items: Sensitize shoppers to the importance of fully using what’s available.
     In the project, a sample of 964 people were chosen to be representative of produce consumers. Each member of the sample was asked to state their purchase intentions for two fruits and two vegetables with varying levels of shape abnormality.
     No significant differences were found in purchase intention between familiarly shaped items and items with moderately abnormal shapes. However, produce with a markedly abnormal shape was less likely to be purchased, according to what the sample consumers said. This effect was much less, though, among the consumers who were concerned about food waste in modern society.
     Beyond produce itself, abnormally shaped packages can cut into buying intentions. Researchers at University of Georgia and University of Pennsylvania asked consumers to evaluate packages designed to look incomplete. The result of this was a belief among the consumers that the package held a lower quantity compared to packages of equivalent size and weight, but without blanks in the design. It’s as if the missing portion generated feelings in the consumer that part of the contents had leaked out, leaving less behind.
     Importantly, research at University of Southern California finds that an unusually shaped container attracts attention, which can increase sales. So, coming back to the veggies, you might be able to turn around turnip concerns. Just point out how that misshapen veggie looks exactly like the Virgin Mary praying.

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

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Punch Up Offerings with Distinctive Labeling
Blank Out to Increase Consumption

Monday, June 22, 2015

Encourage Category Consistency Time-to-Time

It can be handy for a retailer to have repeat customers with consistent purchase habits. When those sorts of customers come into your store, you earn good will by promptly pointing them toward the sorts of items they’ve bought in the past. You know what special offers will entice them. You could build your inventory around items your consistent purchasers like.
     Researchers at University of Pennsylvania, Duke University, National University of Singapore, Singapore Management University, and ESADE in Spain find that consistent purchase habits are a matter of time. That is, compared to shoppers who think about the money involved while making a purchase, those shoppers who think about the time involved are more likely to select the same sorts of items in the future. They’re also more likely to keep making purchase decisions in the same ways. This is useful to know when you’re introducing a new item to the shopper. You can predict how they’ll go about evaluating it.
     The implication of the research findings is that to build consistent purchase habits in your customers, talk with them about the time it will take to select what fits them best, the time you recommend they reserve to learn how to use the item, and for about how long they can expect the item to keep working for them.
     The researchers say that such talk of time causes the shopper to decide based on emotions, since time considerations are difficult to analyze objectively. Lots of other consumer behavior research has shown that decisions based on emotions are both more consistent and more satisfying. In contrast, thinking about the financial aspects, such as the price or the credit terms, leads to analytical reasoning, which causes more variance from one shopping trip to the next.
     Added by research findings from University of South Australia and Mondelez International is that consistency is more likely at the item category level than at the brand level. The study looked at the purchase habits for a selection of 139 brands from fifteen packaged goods categories by the same 15,000 United Kingdom households from one year to the next. About two-thirds of these households showed category consistency, while only about half of the households showed brand consistency.
     Aiming for category consistency rather than brand consistency is good for the retailer. Shoppers seek a certain amount of variety, and you’d prefer they change brands than change stores.

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

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Know How Much Emotion to Deliver
Monitor Variety Seeking
Increase Store Loyalty Using House Brands

Thursday, June 18, 2015

Are the Artifacts Selling the Mood?

Applebee’s restaurants hang all sorts of conversation starters on the walls. Cracker Barrel restaurants position board games around for customers to play. Central to the d├ęcor at Bass Pro Shop and Scheels stores are mounted wildlife heads. The memorable “Come to China” event at Bloomingdale’s included an entire Cantonese farmhouse at the flagship Manhattan store and rare Chinese decorative items at others.
     How might you best use artifacts placed throughout your store to reinforce your business image? Help in answering that question comes from, of all places, a museum exhibition in Thessaloniki, Greece. It was there that researchers from California State University-Stanislaus studied the effects on visitors of objects in an exhibition of Byzantine heritage.
     Those effects can be assigned to three categories:
  • Physically drawing the consumer in. Objects which are visually interesting or cry out to be touched guide the consumer’s path of inquiry. 
  • Conceptually drawing the consumer in. Entering the area, the visitor has preconceptions about what will be experienced. Then when the visitor encounters each of the objects, those preconceptions stimulate the visitor to create stories which add interest, making it more likely the visitor will stay for a while, tell others about the place, and choose to return in the future. 
  • Substantiating. The right artifacts give substance to the moods the visitor is experiencing, meaning that impressions of the site are trusted more. In this process, the consumer is likely to incorporate what they’re feeling and what they believe others around them at the time are experiencing. 
     With these three in mind, select and position artifacts in your store to facilitate sales. Choose items which are consistent with other impressions you want to give the shoppers. Place appealing objects in areas of the store you want shoppers to explore. At least occasionally feature pictures of the artifacts on store signage and in ads.
     Certainly, the ways in which artifacts influence consumers are different in a museum than in a retail store. In the museum, people have come specifically to interact with the objects, while in the store, the artifacts are incidental to the purpose of the shopping trip. The effects in the store are more nuanced.
     Then again, there are some similarities in the functioning. Most museums have gift shops where replicas and images of exhibited items are sold. Involving the consumers in processing their perceptions sells not only the mood, but also the merchandise.

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

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Excite Consumers with Nature
Theme Like You Care

Monday, June 15, 2015

Cement Satisfaction with Asymmetric Benefits

People who are skilled at selling are able to craft just the right blend of purchase benefits to wow the shopper. The trick is to know the merchandise and size up the shopper. Still, results from a multinational study indicate there’s more: For certain types of benefits, offering a greater degree doesn’t pay off much in increased satisfaction with the purchase afterwards.
     The researchers were from Virginia Tech, California State University-San Bernardino, Yonsei University and Duksung Women's University in South Korea, Aix-Marseille University in France, and Free University of Bozen-Bolzano in Italy. The retail categories explored were automobiles, banks, computers, housing, and leisure travel.
     With some types of benefits offered to customers, there was a negative asymmetry, in that the absence of the benefit led to dissatisfaction more than an abundance of the benefit led to higher satisfaction. This is true of functional benefits—“Will the product or service solve my problem or meet my needs effectively and efficiently?” Once the shopper believes there’s an adequate amount, the wise salesperson will move on to featuring other benefits.
     Benefits showing positive asymmetry could be characterized by a quote attributed to Mae West, preeminent American sex symbol of the 1930s: “Too much of a good thing can be wonderful.” Here, a shortage of the benefit carries less weight in the purchaser’s evaluation later than does an abundance of the benefit. In the multinational study, symbolism benefits showed positive asymmetry. The right kind of symbolism in a purchased item reduces the social risk expressed in the question, “If the people I admire know I’m using this product or service, am I in danger of falling out of favor with them?”
     What the researchers called the moral benefits also showed positive asymmetry. These benefits address the psychological risk expressed in the question, “Does using this product or service conflict with the image I want to maintain of myself?”
     Be sure your customers recognize the benefits that came from their purchases. With so much going on in their busy lives, the customers can too easily forget to give credit to a service or product for the benefits they obtained. And sales staff can too easily forget to hook the effect to the cause in the customer’s mind.
     As you and your sales staff avoid such oversights, cement satisfaction by correcting for how the consumer’s reasoning handles certain types of benefits statements in asymmetric ways.

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

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Reduce Unwanted Risks for Your Shoppers
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Look It Up: Abstract Benefits Above Shoppers

Thursday, June 11, 2015

Wait, Wait, Don’t Tell Me

Wait a bit before you ask purchasers’ opinions. For consumer researchers, the term “sleeper effect” refers to a phenomenon first noted in political campaigning: When the arguments for a candidate were convincing and the person selling the arguments was irritating, the consumer would at first not be at all convinced, but after a period of time would forgot about the source and be persuaded by the message.
     Subsequent studies found that the sleeper effect works in a range of selling situations. What a shopper thinks about your store or about their purchases depends in part on when you ask for their opinions.
     Researchers at Seattle University and University of San Diego explored the intersection of sleeper effects and another classic finding, called the “framing effect.” People rate the same merchandise more positively when a description is framed positively than when framed negatively. For example, consumers are more likely to say they’ll buy a cut of beef described as 75% lean rather than 25% fat, even though both descriptions are referring to the same slab.
     The Seattle/San Diego researchers used a piece of gum in place of a slab of beef. Some of their study participants were told the gum had “more than 95% natural flavors,” while the others were told it had “less than 5% artificial flavors.” Then some in each group were asked their opinion of the gum immediately after consumption, while the others were asked after a delay of 10 to 50 minutes.
     For those who were asked immediately, no evidence of a framing effect appeared. These consumers depended on their personal experiences rather than taking the description into account. But there was a “sleeper framing effect” with those asked even that brief time afterwards. Those told the gum had more than 95% natural flavors gave higher ratings than those told it had less than 5% artificial flavors.
     Yet there was an exception to this, too. In another part of their study, the researchers used telephone ring tones as the item to be judged. One of the ring tones consisted of bees buzzing, selected as something the consumers would find to be highly unpleasant. That experience was so negative that even those given a positively-framed description and asked about the ring tone a while afterwards showed no sleeper framing effect.
     If you’re offering extremely irritating ring tones, chewing gum, or salespeople, the shoppers won’t sleep that off.

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

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Sleep Away from Customer Irritation
Stress the Impact of Spreading Impressions
Frame with Phrasing

Monday, June 8, 2015

Slow Fashion Up

University of North Carolina-Greensboro researchers within the Department of Consumer, Apparel and Retail Studies noted growth in “slow fashion,” defined as consumers’ desire to purchase items they’ll want to use for a relatively long time. Slow fashion is part of the drive for environmental sustainability and as such, involves valuing items produced with minimum impact on the environment even when this means the production process is slower.
     If all this results in customers shopping at your store less often or you needing to backorder popular items, that’s bad news. But if it means your shoppers are willing to pay a premium for items which are designed by craftsmen, well-made, and bespoke, it’s good news.
     The North Carolina researchers’ analysis suggests you can maximize the good news from the slow fashion movement by emphasizing one or more of three points in your marketing:
  • Fair trade manufacturing practices so the welfare of workers is respected. 
  • Local origins for the raw materials, the production, and/or the supply so that a good portion of the item’s retail purchase price will sustain the quality of life near where the purchaser lives. 
  • Backstories for the items so that the lore surrounding the product or service is preserved. 
     Another angle toward slow fashion is to prolong the useful life of items you sell. Over past years, American consumers annually discarded almost seventy pounds of clothing per person. People throwing away clothes could have chosen to resell the items, donate them, or find a way to repurpose them. These consumers might have been convinced to use the clothes for “swishing,” that practice of swapping fashions with others for the joy of acquiring new items rather than seeking trades for equivalent monetary value. But instead of any of this, the clothes are trashed.
     With the intent of reducing environmental waste and building profits, ask shoppers about their disposal of products:
  • Are they taking the products to recycling collectors? Those of your customers motivated to go green would like to hear how what you sell includes previously recycled materials and how your products are biodegradable. 
  • Are they putting the products on a back shelf at home because they can’t figure out how to use them? If so, distinguish your store by coaching shoppers on proper use of items and, perhaps, make training a profit center. 
  • Are they trading in the products? Consider adding a resale business in your store. 
For your profitability: Sell Well: What Really Moves Your Shoppers

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Stay Ready to Sell Luxury
Notch a Niche for the Fair Trade Spirit
Choose an Item’s Country of Origin
Back the Appeal with a Backstory
Close In on How Shoppers Close Out Use

Thursday, June 4, 2015

License to Marry Naughty

After acting holy, shoppers tend to get naughty. For example, when people put a healthy food item into their grocery shopping cart, they become much more likely to select a fun food item next.
     Consumer psychologists call the phenomenon “licensing.” Being good gives us license to marry the bad. Researchers at Harvard University and Duke University saw another example of licensing as a byproduct of a study on the purchase of organic foods. The study data were collected with unusual detail by looking at a grocery store’s copies of purchase receipts from shoppers in the store’s loyalty program. This allowed the researchers to track each shopper’s buying patterns over time. It also allowed them to determine if and when a shopper brought to the store their own reusable bag. The store gave a cash credit for this environmentally responsible action, so a record of it was included on the receipt.
     The researchers were interested in whether shoppers who brought their own bags purchased a higher number of organic versions of items. The answer from the receipts was that yes, the shoppers were. More specifically, on those trips when the consumer brought their own bags, they were more likely to buy organic than on those trips when that same consumer did not bring bags. Green actions begot green actions.
     But there’s more to the story: When shoppers bought organic, they were more likely to add candy bars and cookies. Green actions also begot transgressions. The indulgences were mostly small purchases, not adding much to health threat for the shopper or to the transaction total for the retailer. Still, a whole bunch of small purchases over time can benefit your bottom line.
     A shopper who makes a good, sound purchase decision is ready to buy an item that's mostly for fun. And when your customer is looking around for fun items, you'll want to be sure you make those items easy to find.
     The best way to do that is to have fun items displayed throughout your store. More than this, when a customer completes the decision to buy a highly sensible item, offer them a follow-on sale of a fun item in the same or a related product category.
     Having it from a similar product category works best because you should be subtle. The licensing effect is strongest if stimulated subconsciously.

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

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Have Fun Items Throughout the Store
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Monday, June 1, 2015

Bare Asinine Oversights That Embarrass

A set of studies at Northern Kentucky University and University of Tennessee concludes that shoppers who fear embarrassment about the items they’re about to purchase will buy additional items to serve as masks. The researchers point out the profitability advantages in letting the embarrassment rein. I see it differently. The basket total may be higher with all those masking items, but a customer who is embarrassed in your store is less likely to come back again to fill another basket.
     Among the 33 product categories assembled for the studies, those evoking the most fear of embarrassment for prospective purchasers were incontinent pads, yeast infection treatment, and douche. Hardly surprising. But romance novels held rank 7, so it’s not just with personal care items. In an earlier study at Northwestern University, study participants were asked how embarrassed they’d feel buying just a book titled The Complete Idiot’s Guide to Improving Your IQ. A parallel group of participants were asked how embarrassed they’d feel buying the book along with a purchase of the scholarly Scientific American magazine and the mind-challenging Rubik’s Cube. The add-ons evaporated the embarrassment.
     As a kindness to your customers, have your store staff think through which items might set up purchase embarrassment and then:
  • When you can, stock those items on shelves which have limited exposure, such as in small alcoves, rather than on endcaps. This is particularly useful when purchase of an additional item makes things even more embarrassing. In the Kentucky/Tennessee studies, toilet paper wasn’t a sensitive item to buy unless the purchase also included anti-diarrhea meds. To promote the items in these less visible areas, you could include store locations or aisle numbers in ads or on store signage in other areas. 
  • Position adjacent to the potentially embarrassing items other items which give the opportunity for an opposite impression. Next to the anti-gas tablets, you could feature bottles of fine spices, and next to the foot deodorant, offer a pedometer which measures running distance. 
  • At the cash/wrap, don’t ring up sensitive items first or last, since that would give them prominence. The Kentucky/Tennessee research uncovered the habit of the embarrassed shoppers burying the critical item under other items. Keep it buried during checkout. And it would be an absolutely asinine oversight for the cashier to, let’s say, call out over the loudspeaker, “Price check now for Register 3 please on Preparation H Hemorrhoid Cream.” 
For your profitability: Sell Well: What Really Moves Your Shoppers

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Counterbalance Embarrassing Purchases
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