Prolong Your Reputation as Cutting Edge

“New and improved” has been a mainstay of retail marketing for forever. But a preference for the cutting edge has exploded in shopper psychology. An upside for the smaller retailer is that it gives an opening to get customers. “Want the latest technology/fashion statement/service delivery method? Come to us rather than to the stodgy retailer that’s been around too long.” At the same time, the challenge for retailers is that once you’ve made “new and improved” a major marketing message, you risk losing that reputation—and your customers—to upstarts.
     Here are some ways to prolong your reputation as cutting edge:

• Continually introduce some new and improved items. A common sense suggestion, I know, but one that is too often overlooked by busy retailers.
• Open pop-up stores. These are stores that remain in business for a very limited time. A Bloomberg Businessweek article from a few years ago describes how even retailing giants Target and Walmart have successfully used pop-up stores. In one case, the Target pop-up was open for only four days. Your objective is to generate excitement about your bricks-and-mortar store and/or ecommerce site. With this in mind, announce the pop-up widely to the media, realizing that even after the pop-up has closed, reporters will figure their audience is still asking, “What the devil happened?” When the Bloomberg Businessweek article was published in 2007, retail was thriving, so the article said, “Unoccupied stores in hot retail locations aren’t easy to come by.” The situation is different now.
• Repackage nostalgia. Australian entertainer Peter Allen thought enough of the saying “Everything old is new again” to coauthor a song by that title. Merchants are accommodating nostalgia fans who want the cutting edge by offering items like antique toasters sold as accent pieces, music tracks from old LP records reissued as MP3 downloads, and traditional house calls augmented with Internet ordering.
• Build customer loyalty. Another common sense suggestion? Maybe, but for a reason you might not have recognized: Loyal customers are sensitive to whether the cutting edge has become overly trendy. Researchers at Concordia University and University of Wisconsin-Madison explored what happened when loyal customers’ shopping selections threatened to be associated with terms like “yuppies,” “metrosexuals,” “urban gangstas,” and “hipsters.” The research findings indicate that loyal customers’ reactions in rejecting these labels strengthen their conviction that their existing store of choice is cutting edge.

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Meet Needs of Divorce Market
Welcome the Plus Sizes
Meet Customers’ Desires for Nostalgia

Turn Your Image on a Dime

Want to turn on a dime while navigating in traffic? That’s no great trick if you’re driving a Harley-Davidson motorcycle. But how about if you’re driving a Buick motorcar. As a recent Bloomberg Businessweek article says, Buicks are traditionally big and stodgy. Not the sort of vehicle to turn on a dime.
     Yet both Buick and Harley are doing a tight turn in another sense. They’re successfully moving to swiftly alter the brand image their respective dealerships portray. Buick sales are about 60% higher this year than last as a result of positioning themselves as a youthful, tech-savvy car.
     Harley is aiming to augment their male macho image with a bow to the softer feminine direction. Market share for on-road motorcycles is up one percentage point from last year, according to vehicle market analysts R.L. Polk & Co. One percentage point doesn’t seem like much, but when your market share for last year was already 46%, incremental gains are more challenging.
     The key to turning your store brand image on a dime is contrast. The shopper psychology underpinning is called Weber’s Law: In the 1830’s, Ernst Weber reported that weight lifters would notice an increase or decrease in the load only when the change was about 20% of the prior load. For 100 pounds, it took a 20 pound difference. But for 300 pounds, it took a 60 pound difference. Experimental psychologist Gustav Theodor Fechner extended Weber’s Law to cover all sorts of human perceptions.
     Now Buick and Harley applied Weber’s Law to change brand perception by implementing dramatic differences sure to exceed a 20% threshold in the product and the promotion:

• Last year, Buick introduced a midsize sedan with a sculpted body on the outside and iPod connectors on the inside. A few months ago, Harley began selling the SuperLow model, which features a much lower seat, significantly lighter weight, and more festive color options than past Harleys.
• Buick phased out sponsorship of a major golf tournament and used the funds to promote the Buick Regal at a series of rock concerts, each concert highlighting one or more local bands. Harley’s 650 U.S. dealers have been holding special events to which only women are invited. Bloomberg Businessweek reports that for one set of events, more than 40% of the women were in a Harley dealership for the first time.

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Project Your Brand Positively
Use Customer Life Changes to Switch Brands
Combine Flavors for Bonus Effectiveness

Impress with the Exotic

“And for the next item in our Mexican feast, may I offer you a smoked corn custard sprinkled with pale yellow, squirming wax moth larvae?”
     Not your cup of tea—or your cup of chapulines, those little fried grasshoppers described as tasting like the exoskeleton of a potato chip? Then how about visiting the latest exhibit at our local museum where we’ve graphic photographs of children from Mozambique snacking on live locusts?
     A New York Times article described the bug-filled Mexican feast at Brooklyn Kitchen restaurant. Exotic experiences like these will draw interest in, and therefore footsteps to, your retail business. Whether you run a restaurant, a museum, a travel agency, or some other type of business altogether, think of what unusual experiences you might offer to your target audiences.
     Then, as you plan the publicity for these events, consider what benefits the unusual experiences provide:

• Roller Coaster Effect. Consumers go on the most treacherous roller coasters not only for the stimulating physical sensations, but also for the sense of pride achieved in prevailing over fears. To draw shoppers, publicize the thrill of confronting the exotic. Tell people they’ll be able to take away a memento to verify their show of courage.
• Exotic Dancer Effect. Some people are more interested in breaking taboos than in breaking through fears. We don’t call those ladies “exotic dancers” simply because they hail from faraway places. As a general rule, consumers yearn to push the limits. Publicize the opportunities you’re giving people to do that.
• Educational Effect. The organizers of the Brooklyn Kitchen event touted the benefits from learning about cultures in which eating bugs is common. And notice how the Travel Channel introduced viewers to exotic places with presentations of Andrew Zimmern’s “Bizarre Foods” international ingestion interludes. Publicize the educational benefits of your unusual offerings.

     After reading the NYT article, I decided to add a fourth effect to those three. It was of particular relevance in New York City. It was also probably of particular interest to one diner at the Brooklyn Kitchen event. She works at Victoria’s Secret. Around the time of the exotic dinner, a NYC Victoria’s Secret store along with a Niketown store shut down for a while in order to eliminate infestations of bedbugs. Considering this, the pleasure from chomping down on bugs might be called the Revenge Effect.

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

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Reduce Unwanted Risks for Your Shoppers
Apply Systematic Desensitization to Fears
Consider Publicizing Your Rascal Image

Reduce Bias in Customer Reviews of Services

Why did Howard Johnson’s Restaurants take a spiraling dive into failure starting in the mid-1970’s. The oil embargo of 1974 curtailing the road travel that fueled their business? The loss of a quality image when, in response to the rise of McDonald’s, Howard Johnson’s Restaurants cut back on both staffing and food quality?
     At the time, some industry experts posited another reason: Howard Johnson’s Restaurants were placing too much importance on customer review cards filled out by people at the cashier station. As the restaurants suffered sales losses, they became increasingly insistent on asking customers for feedback and then repeatedly switching business strategy to take account of the comments.
     What the managers failed to acknowledge, said these industry experts, was that customer reviews have a negative bias. The anecdotal—perhaps overly cynical—rule of thumb is that a customer most likely to take the time to fill out a review card is somebody so upset that they’re one step short of suing the restaurant. The result is an unrepresentative sample of strong negative opinions.
     The anecdotal wisdom is that any glowing positive reviews are most likely to come from somebody who has a son or daughter working as a server or in the kitchen. Usually not enough to outweigh the negatives, although it sometimes does, which creates an unrealistic positive bias.
     In a three-nation study, researchers at Hebrew University of Jerusalem, Stanford University, and Korea University find that overall, there is indeed a negative bias in customer reviews of services. Based on those research findings and others, here are ways to reduce the bias:

• Wait until after the service is delivered before asking for an evaluation. Being told in advance that you’ll be asked to evaluate a service leads to more negative evaluations.
• Put the customer in a positive mood during the transaction. One of many ways to do this is to offer an unexpected discount.
• When you see a common theme in a set of negative evaluations, address any shortcomings in ways that are profitable for you. Then publicize the changes. Continue to ask customers to evaluate you after each service episode of that type.

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Ask The Customer for Their Opinions of Items
Ask for Specifics on Merchandise Returns
Profit from Shoppers’ Positive Moods
Have Unannounced Discounts on Common Purchases

Engage Future Customers

A Wall Street Journal article reports that cemeteries across America are holding band concerts, barbeques, and sky-diving exhibitions. The main objective, say the funeral directors interviewed for the article, is to position cemeteries and mortuaries as pleasant places that are able to be of service in the future. “Meet us before you need us.”
     Whether or not your line of retailing is in the funeral industry, here are some consumer psychology tips inspired by what these cemeteries are doing:

• Always be building interest in your business among future customers. The nature of a cemetery is to stay in business for a long time. The people attending the special events might choose to buy burial plots or make cremation arrangements for use years from now. And even the young people attending these special events have parents and grandparents, some of whom might need funeral arrangements in the nearer future. What is the length of time of your retail business’s planning horizon, and what steps will you take to cultivate prospects for all points out to that horizon?
• Hold a continuing series of special events for prospective customers. The cemeteries featured in the WSJ article don’t conduct just one event. For years, Hollywood Forever in Los Angeles has held movie nights in which the film is projected onto the mausoleum walls. Even a single special event gives you the opportunity to educate your target markets about the value you can offer them. But an ongoing series of events increases sales by maintaining in your current and potential customers the habit of regularly coming to your site. How will you allocate your special events budget so that you’ll produce a continuing series of events rather than spend it all on a few events?
• Leave prospects with the right impressions of your business. The challenge for the cemeteries in producing special events is balancing fun and respect, excitement and dignity. Management of Fairmount Cemetery in Denver applies that to acceptable movie titles: “Arsenic and Old Lace” would be okay, they’ve decided. “The Texas Chainsaw Massacre” would not. What criteria will you use in selecting the special events?

     A comment posted to the WSJ article does give some guidance for the cemeteries: “Anything but clowns. The cemetery doesn't need to be any creepier than it already is.”

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

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Stage Special Events to Build Sales
Hold Monthly Clinics
Cultivate Kids as Future Customers
Project Your Store’s Personality

Monitor Your Community Involvement Payoffs

I recommend that retailers do well by doing good: By contributing to your community, you fulfill your ethical obligations as a member of the community as well as earn the sort of gratitude from your target markets that can build lasting profitability.
     There are many ways to contribute to your community and many factors you’ll want to consider when deciding which of those ways to implement. University of South Florida research indicates that pairing charitable contributions with the sale of brands unfamiliar to the consumer will boost sales of those unfamiliar brands. It doesn’t seem to matter much whether there’s any logical connection between the product or service category of the unfamiliar brand and the cause supported by the contribution.
     On the other hand, the charity you select does seem to make a difference if your contribution is to head off any suspicions of price gouging. Suppose major flooding hits a store’s target market area, resulting in a demand spike for flashlight batteries. If the store increases the price of batteries, but announces how a portion of the profits will be contributed to the Red Cross, acceptance of the price increase could be a slam dunk.
     In addition, whenever you organize a charitable activity, offer a variety of ways for your older customers to pitch in to help. Researchers find that altruism is especially important to elderly consumers. Seniors like to give their business to retailers who are compassionate, and seniors like to view themselves as generous.
     In all these cases, what counts is that the cause is something important to the customers. And that’s where it’s valuable to monitor the payoffs from your community involvement. Regularly assess how to allocate your charitable donations and how to publicize those partnerships to attain the most profitable payoffs.

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

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Peddle Unfamiliar Brands Using Contributions
Show Fair Pricing By Contributing
Help Older Customers to Help Others

Attend to Face-to-Face Word-of-Mouth

Even in these days of raging social networking, word-of-mouth (WOM) about your store is most likely to be passed on via face-to-face conversations. That finding was described in an Online Media Daily article and comes from a study carried out by New Jersey-based WOM consultants Keller Fay in partnership with Yahoo.
     So here are two tactics for improving retailer profitability:

• Encourage customers to shop with you in groups so you can benefit from what you hear them talking about. Hold special events. Carry enough of a range of items to appeal to different family members. Then while they’re shopping, listen to the group members’ chatter. Have sales staff ask customers for specifics about what they like and areas for improvement. Listening in to group shopping can work for the ecommerce retailer by using tools like ShopTogether Crowd.
• Give shoppers materials they can take away with them as conversation starters to share with family and friends. This is especially useful for newly introduced products and items for which the purchaser incurs monetary and/or self-concept risk. With ecommerce customers, make it easy for the purchaser to send on a URL to others to show off what they’ve bought.

     The Keller Fay/Yahoo study concluded that about 76% of WOM conversations occur face-to-face. The Internet does play a role in these conversations, to be sure, and that role is expected to increase as more members of the millennial generation—the first cohort to have grown up with the Internet—become adult consumers. But for now, the role of the Internet is somewhat limited, with only 15% of the analyzed WOM conversations from 18,500 consumers including information the consumer got online.
     The study findings do reinforce the importance to you of cultivating the influence of market mavens. According to consumer researchers at University of Mannheim and University of Texas-Austin, market mavens are a special type of opinion leader. Rather than considering themselves expert advisors on only certain retail products and services, market mavens counsel others about the whole shopping experience and recommend specific stores. Because market mavens generally belong to many social groups, they could be called “Conversation Catalysts.” That’s the name the Keller Fay/Yahoo people coined.

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Encourage Group Shopping
Gather Comments from Your Customers
Encourage Specifics & Criticism in Word-of-Mouth
Satisfy Each Customer’s Self-Concept
Have Post-Sale Product Literature
Build Buzz with Market Mavens

Redirect Consumer Boycott Anger

Hoards of people are angry at BP PLC over the massive and continuing oil spill in the Gulf of Mexico. With that anger, consumers are boycotting BP. The ways in which the boycotts have taken shape, the reactions to the boycotts, and an understanding of the social psychology of consumer boycotts can all provide useful lessons for you, the retailer.

• Distinguish impromptu from organized boycotts. An article in Canada’s Financial Post about the various protests against BP includes a photo of two women standing at a BP service station. Based on the smiles and the shorts, I’d stay these supposed protestors are much more interested in having their picture taken repeatedly than in raging against the corporate machine. Impromptu boycotts draw attention to your business. The boycott can draw sympathy as well, especially if the protest is prolonged. Turn all this to your advantage. A number of newspaper articles are currently appearing that explain how boycotting a dealer-owned gas station that happens to carry the BP logo hurts the people who own the station, not BP Global at all. Your initial reaction to an impromptu boycott could profitably be, “Let’s use any media attention to show how good a retail business we run.”
• If it is a boycott initiated and maintained by a community action group, determine the group’s boycott objectives before deciding what actions to take. In my experience, community action groups organizing a boycott are usually less interested in doing economic damage to a business than in forcing changes to the behavior of all businesses engaging in the offensive action. If you find this is the objective of an organized boycott of your retail business, publicize any of the ways in which you share common ground with the group. For instance, a service station owner probably shares with Facebook’s Boycott BP group—what is currently the fastest-growing online boycott sponsor—a desire to keep beaches clean. That service station owner might even make common ground with Greenpeace. After all, according to an article in yesterday’s New York Times, Greenpeace is now against a boycott of BP. Greenpeace instead wants us to support what they call another BP—Beyond Petroleum. Well, okay, the retailer and Greenpeace might part company on that point.

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Resolve Customer Complaints Carefully

Overcome Weaknesses in Business Name

If you treasure alpine hiking, are you more likely to stay at the Grand Pines Lodge or at the Soft Soap Spa? Probably, you’d opt for the Grand Pines Lodge. It’s because a business is rated more highly when its name is descriptive of the characteristics sought by customers.
     That finding could be useful if you’re starting up your business or if you’re ready to go through a name change. But how do you overcome a weak association in a business name you want to keep? Here are some tactics based on what research finds to be helpful:

• Repeatedly advertise and publicize the characteristics you want people to associate with your operations.
• Point out the similarities of your business to a business that has the features shoppers are looking for.
• Use customer testimonials to document your benefits that match shopper preferences.

     If your business is a local institution, you might not realize there’s some misleading image being portrayed to out-of-towners. Here’s another hotel example: A number of years ago, I was invited to be a guest on Cleveland, Ohio’s WEWS, Channel 5. A producer there wanted me to talk about my work as a consulting psychologist. After I accepted the invitation, I was told reservations had been made for me to stay the night before at a hotel called Swingos. Having never heard of Swingos, my first reaction was negative. I wasn’t sure whether to pack the ear plugs so I’d get a good night’s sleep, practice my dance steps, or be sure to bring the wife along with me on the trip.
     As it turned out, there was no need for me to do any swinging at Swingos. I learned that Swingos Celebrity Inn was begun in the 1960s by Nick Swingos and his son Jim. After my stay, my mental associations with Swingos became positive ones.
     Actually, there was more about names during my visit: When I arrived at the studio the next day, the producer brought me to the set to meet my interviewers for the program segment. She introduced me to Fred Griffith. He introduced me to his co-host, Wilma Smith.
     “Fred and Wilma,” I rehearsed to myself. No negatives or weaknesses in those names. I’d always liked “The Flintstones.”

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

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Make Your Business Name Easy to Say
Project Your Brand Positively
Compare Unknown Brands to Best-Known Brands

Head Off Dangers to Your Image

How about closing down your business for a few hours so you and your staff can go spend their money with a direct competitor?
     That’s what the owner of a Durham, North Carolina BBQ restaurant, The Original Q Shack, decided to do last week. Staff from about a dozen other restaurants also came. Their destination was another Durham restaurant, Bullock’s BBQ. The announced reason was to help out a respected colleague who had suffered a business setback: After Bullock’s food came under suspicion of causing salmonella poisoning a few weeks ago, business dropped about 80%.
     Not far behind the announced reason was another motivation: Protect the image of Durham restaurants at a time when people are again getting financially comfortable with eating out. The Bullock’s event was organized by the marketing director of the Durham Convention and Visitors Bureau. He’s a former restaurant operator himself.
     I’ve seen reports of the event in three newspapers and on the websites of two TV stations. People learned that Bullock’s has been in business for well over half a century, is operated by the son of the founder, has never received a food sanitation grade lower than A, and has hosted celebrities like Dolly Parton, Garth Brooks, Kris Kristofferson, and quite recently, U.S. Vice President Joe Biden. The message was clear: Durham dining is good enough for all these people, so it’s good enough for you, your family, and your friends.
     If the misfortunes of a competitor are due to incompetence or evil, distance yourself and show you are a responsible, conscientious retailer. When those misfortunes are due to circumstances outside the control of your competitor, it’s ethically right to help them out. And when it’s a matter of heading off dangers to your retailing image, helping out the competition is also good business.

Encourage Balanced Customer Reviews

The 2010 Social Shopping Survey, to be released soon by the e-tailing group PowerReviews, describes the important influence of online reviews when shoppers select retailers. Encourage your customers to post reviews on internet sites which your target audience of prospective shoppers might use.
     And suggest to people that the reviews they post go beyond glowing praise to point out areas for improvement.
     Encouraging criticism may seem like a strange way to attract new customers. Here’s why it makes sense:

• You want site visitors to trust the positive information in the reviews. When respondents to the 2010 Social Shopping Survey were asked what would lessen trust in online reviews, almost 40% replied that when there was no mention in the reviews of areas for improvement, trust faded.
• Reviews that include both strong positives and a few negatives will develop curiosity in prospective shoppers. The curiosity can lead to the shoppers wanting to check things out for themselves at your store or website. When positives far outweigh negatives, you’ve won a customer. Research at Rutgers University concluded that direct experience with the retailer affects how the negative information is interpreted. Almost 60% of the 2010 Social Shopping Survey respondents said they use customer reviews to compare with other information, such as their own experiences. If after visiting your store, a customer concludes that the criticism was not justified or complaints were exaggerated, there’s a good chance the customer will become an advocate for your store—working to convince others to give you business.
• Retailing thrives on change, so you’ll always be interested in how to make an excellent shopping experience even better. When you ask your customers to post reviews that specify areas for improvement and you then consider the suggestions, you’re building the strength of your business.

Publicize Social Consciousness

What do the Catholic Church and Nike have in common? Both are pushing back against negative publicity for actions they’ve taken—or more accurately, actions they’ve not taken. With the Catholic Church, the issue is abuse of children. In a much less well-known matter, the issue with Nike is severance pay.
     Two Honduran subcontractors to Nike refused to pay a total of about $2.6 million to workers who lost their jobs when factories were suddenly closed. Protestors say the severance payments are required under Honduran law. Last week, University of Wisconsin-Madison announced that because of Nike’s failure to take action in the matter, the university is terminating its licensing agreement with Nike.
     The University of Wisconsin announcement read to me like the licensing termination was a negotiating tactic—not only with Nike, but also with the groups pressuring the university to take action. The chancellor praised Nike’s previous commitment to ethical working conditions worldwide and said she remains hopeful the severance pay matter can be resolved.
     If you find yourself subjected to negative publicity about your ethics, research suggests that one way to get out in front of the story is to demonstrate your social consciousness. Where to begin? Nike has said they’re paying for training and job placement for the displaced workers.
     But maybe you hesitate addressing employee rights because your business operates in societies which think government oversight is excessive. In this case, you might start with social responsibility issues designed to bring you largely supportive attention within the societies that matter to your business.
     For instance, almost everybody supports reducing the amount of trash we generate. Your first publicizing of social responsibility might involve ways you sell products which use refillable containers, favor vendors that minimize unnecessary packing, and accept old products for recycling. It's a start.

Respect the Internet’s Speedy Reach

We’ve another reminder about the potential dangers for retailers because of the very fast, very widespread reach of the Internet:
     Kmart recently offered selected customers a coupon for $10 off a $20 purchase. Each customer receiving the coupon offer had given their e-mail address to Kmart and shopped in a community in which Kmart had recently updated the store.
     Missing from the coupon, though, was a notice that it could be used only in certain locations. No surprise that the distribution quickly turned from a targeted e-mailing into a massive number of Internet hits. Also no surprise that when customers brought their coupon into the nonparticipating stores, store staff told them the coupon would not be honored. Actually, it appears that it got much worse than this. A bunch of people posted on Kmart’s Facebook page that they’d been accused by store staff of trying to defraud the store.
     Here are a few of the reminders inspired by this Kmart episode in the Internet age:

• Proofread, even when there is time pressure to start a promotional campaign. Make that especially when there is time pressure. Mistakes like the promise of a 50% discount will spread so rapidly you won’t be able to catch them.
• Coach staff to fix the problem, not fix the blame. My impression after reading and hearing reports of what happened is that many store staff sincerely believed the coupons were fraudulent. It looked like an Internet hoax. I believe store staff, including managers, said to customers, “This coupon is fraudulent,” and the customer heard, “You’re a dishonest cheat.”
• Acknowledge the seriousness of a problem. KOMO TV reported that in a telephone interview, the Kmart spokesperson said what happened was, “simply an error.” That quote got very fast, very widespread circulation on the Internet.

Introduce Unknown Products with Charity

Unknown brands can provide you higher profit margins. But the profit margins become profit dollars only if your customers turn those unknown brands into brands they get in the habit of buying. Among the more effective techniques for convincing customers to start using an unknown brand is to tie their trial to you contributing to a charity. Findings from University of South Florida indicate that pairing charitable contributions with the sale of brands unfamiliar to the customer will boost sales of those unfamiliar brands. The research finds that the boost is not nearly as great when it comes to brands already familiar to the shopper.
     When a vendor asks your business to purchase a selection of the unknown brand, negotiate with the vendor to share with you in sponsoring the charitable contributions. After all, building sales is in the interest of both the supplier and you. But you’ll get better results if you publicize the sponsor as being your store. Research at Michigan State University, Illinois Wesleyan University, and University of Texas-Austin suggests that when a store rather than a brand is publicized as the sponsor, consumers are more likely to see the sponsorship as a charitable act rather than only a selling technique.
     There’s nothing wrong with doing well by doing good, though. So also consider the charity sponsorship as an opportunity to prospect for new customers. Invite opinion leaders from the charity to visit your store to learn about all that you offer. Get senior citizens involved as volunteers. Researchers find that altruism is especially important to elderly consumers. Seniors like to give their business to retailers who are compassionate, and they like to view themselves as generous. Whenever you organize a charitable activity, offer a variety of ways for your older customers to pitch in to help.

Brag About Your Retailing Humility

Advertise and publicize how you consider your retail business to be excellent, but not perfect. Say you’re always looking for ways to get even better. If you fail to adequately demonstrate your humility like this, you risk schadenfreude disrupting store profits in the short term and the dreaded doppelganger store brand image doing damage in the longer term.

      Schadenfreude means delighting in the misery of others. That’s one thing happening now to Toyota Motors—and to Toyota dealers by association—in the face of the massive automobile recall. Ford and GM are offering $1,000 bonuses to customers who want to trade in their Toyotas. An MSNBC article about the offer is titled “As Toyota stumbles, schadenfreude lurks: U.S. automakers, long dogged by reliability issues, stand to gain from recall.”

      Psychologists at University of Kentucky say schadenfreude comes from envy. Psychologists at Flinders University in Adelaide, Australia say schadenfreude is rooted in resentment. The sort of resentment that can follow Toyota claiming to be the unsurpassable model of quality and then appearing to fail to walk the talk.

      Schadenfreude has even made it into a “The Simpsons” episode where Ned’s business is failing. Homer is overjoyed, and when Lisa defines schadenfreude, Homer replies, “Those Germans have a word for everything.”

      That brings us to doppelganger—from the German and defined as a ghostly counterpart of a living entity. Researchers at University of Wisconsin-Madison document how Starbucks is suffering from a “doppelganger brand image” in which the company’s branding of the shops as an authentic coffee experience has come around to haunt Starbucks. Many customers after being convinced of the importance of such an experience decided Starbucks was bragging too much about their ability to be authentic. Those customers gave up on Starbucks and aimed for other shops which showed more humility.

Aim to Donate, Not Destroy, Merchandise

H&M, the international fashion retailer, is enduring heavy criticism now. A graduate student at City University of New York found bags of unused H&M clothing on the streets of New York. It turns out that staff at the store on 34th Street had taken box cutters and razors to excess merchandise and then trashed the remains.
     Why weren’t these clothes donated to charity? How could the fingers be cut off gloves and insulation ripped from jackets at a time that NYC has been struggling to open up shelter space for the homeless in the face of freezing winter temperatures? Outrage exploded in the media and across the Internet. Considering that H&M has stores in about 35 countries, reaction was international.
     H&M replied that over the past year, they’ve donated about 500,000 clothing items to myriad charitable organizations. A spokeswoman said destroying unsold clothing was against company policy, she was unaware that it was being done, and the company would now check to be sure no other H&M stores were doing it.
     Perhaps left unsaid was that retailers need to take care when giving away merchandise: The unscrupulous could get hold of items and try to return them for store credit. If the donated merchandise works its way to potential customers, this would undercut sales.
     We’ll see how it plays out for H&M. Comments on the New York magazine site—posted by people who claim to have worked for the company—say that the spokeswoman lied and the policy was in fact to destroy clothing which could have been donated. Other postings claim that a great many other retailers do the same sort of thing.
     Whatever the outcome, this is a high-profile time for you to take care that whenever you dispose of merchandise, you aim to donate, not to destroy.

Skim the Data to Spot Leading Trends

There's already too much retailing data for you to comfortably analyze, and more keeps popping up. To make good decisions, know what's going on. But also avoid getting buried by the data. Here are data skimming tips:

• Respect the value of educated intuition. In his book Blink, author Malcolm Gladwell gives a series of examples of how quick decisions, made without much thinking, can lead to results superior to decisions made after great deliberation. Researchers at Radboud University in The Netherlands and at Northwestern University found that beyond an initial assessment period, the more time consumers spent evaluating alternatives, the less satisfying they found their eventual choices to be. This was true whether the products were paintings, apartments, or jellybeans.
• Look for the trends and select where to drill down for details. You want to decide what products to purchase for your store, what services to develop, how to advertise and publicize, what to prune out of your merchandising mix. All these require attention to where the marketplace is going, not only how things are now. Skim the data to spot the trends. Get an overview. At the same time, there will be areas where you need the details. What specific types of consumers are purchasing which products? Which suppliers are providing the best package for your situation—looking at point-of-purchase materials and staff training in addition to wholesale price? But be selective in drilling down.
• Follow up and check back. The examples given by Malcolm Gladwell are of people skilled in decision making in their respective fields. The findings from the Radboud University/Northwestern University research need to be interpreted with an awareness that the type of decision satisfying a customer isn't necessarily what would satisfy your criterion to make a profit. Keep refining your skimming skills.

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

Ask Customers Where They Get Pre-Purchase Info

Research at University of Alabama and Brigham Young University identified five major sources that shoppers use to gather information to help them make purchase decisions. The list is time-tested, but you'll want to update it and see what is true for your shoppers. By knowing where your shoppers are getting their information, you'll be better able to allocate advertising and publicity resources. Have your sales staff ask customers where they're getting their information. Also, if you conduct consumer attitude surveys, regularly include items asking about these five sources.
     Visiting stores and retailers' websites. The shoppers' trend here is to compare a small set of items and/or a small set of stores for possibly purchasing a certain item.
     Advertisements. Looking at and listening to advertising and manufacturers' websites. Although this has historically been the second most popular source, its use is decreasing.
     Sampling. Another popular source that has a decreasing frequency of use. One reason for the decline is that consumers want to take less time making decisions. Another reason is that retailers and suppliers have been ambivalent about how much sampling to allow.
     Friends. Advice from other consumers. Face-to-face word-of-mouth has historically been the single most influential source, even when not the most popular. The trend is toward exchanging information with social media friends.
     Independent reviews. Consumer Reports magazine. Review websites—such as Yelp.com—that claim objectivity and accuracy. The clear trend here is toward consumers substituting online resources in place of advertisements for advice.
     Researchers at San Francisco State University, University of California-Berkeley, and University of Alberta found that most shoppers use at least two sources of information. Therefore, in your data gathering, be looking for which of the two of the set of five your customers use most often. It might be different for different product categories.

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

Make Your Sales Staff Celebrity Endorsers

Are you thinking I'll talk about Tiger Woods? No, you've already had plenty of chances to consider how his bad behavior shows the risks in using celebrity endorsers. So I'll talk about Best Buy instead. That electronics retailing giant is rolling out a pilot test, first publicly discussed last June, for in-store kiosks that let customers trade in video games for store credit. Experts say Best Buy wants to grab entertainment software market share from GameStop, which with more than 6,000 stores located in more than 15 countries, calls itself the world's largest video game retailer.
     What's this have to do with making your sales staff celebrity endorsers? You see, one of the advantages enjoyed by GameStop is that their employees are gaming enthusiasts. Among other things, GameStop has rental programs to allow their staff to master the games. Serious gamers come to store employees to learn the tips, traps, and tricks. When a GameStop staff member praises a game, the endorsement is coming with expertise worthy of celebrity.

• What opportunities do you provide your sales staff to thoroughly learn about each of the products and services they're selling?
• To what degree do you take the recommendations of your staff—those who handle sales and those who handle returns—as to what products should be pruned out of your merchandise mix because the staff feel uncomfortable endorsing them?
• How do you make your expert staff members into celebrities, such as by featuring their photos in ads or even announcing their birthdays over the store speaker system?

     Kudos to Best Buy for courage in taking on GameStop. Researchers at University of Texas and University of Southern California say consumers are attracted to products whose celebrity endorsers have shown courage. Maybe that does bring us back to Tiger Woods.

Offer Frequent Shopper Benefits Beyond Discounts

According to retailing experts at Hofstra University, your customers' favorite frequent shopper reward has been a percentage discount on new purchases. But this is no longer a distinctive feature of the programs. Retailers are increasingly using discount coupons made available to all consumers, not only those with the loyalty club cards. Sites like coupons.com and coolsavings.com are reporting record traffic. More than just shoppers retrieving coupons via their computers before heading out to the store, people are using smart phones to scan a product's bar code while shopping to instantly retrieve instructions for getting a discount.
     Certainly consider participating in these discount coupon programs. But to best maintain your customer database that comes from frequent shopper programs, offer customer benefits beyond discounts. An example of this is a program recently introduced by grocery retailer Kroger Co. They are using their sales databases to notify each customer when an item the customer previously purchased is being recalled for safety reasons.
     Research suggests that many of your customers will consider a program like this to show a caring attitude and a social consciousness. Both of these can build business for you. But take steps to avoid possible problems:

• Publicize that you're doing this, but be clear that you expect to make these calls only rarely. You don't want to have a reputation for selling products that often end up being recalled!
• Allow loyalty club members to opt out of receiving the calls. Early experience with the Kroger program shows that some of their customers don't like to be reminded that every purchase is being tracked.
• When possible, have store staff make the telephone calls at times customers are likely to find convenient. The Kroger program is using automated robo-calling. In my opinion, this undercuts the demonstration of personal caring.