Manage Store Clutter Strategically

Is store clutter bad? A Practical eCommerce article this week recommends that online retailers cut down the clutter. Keep the site neat and simple, so goes the advice. Supporting this idea, researchers at Nielsen Norman Group in Northern California found in their eye-tracking studies that people look at about 50% of online ads that contain just text, but only about 35% when text is superimposed on an image. If there’s animation to muddle up the ad further, the figure drops to 30%.
     I agree that sales can be lost because of excess messiness—not only on ecommerce pages, but also with in-store sales. Still, on the other hand, we do need sufficient complexity—what some retailing consultants might call clutter—to engage the shopper. A classic and repeated finding in consumer psychology is that we want to introduce enough incongruity, enough surprise, so that the shopper slows down for a moment to appreciate the sales message. If the layout is overly sterile, the viewer processes it all immediately and then moves on—beyond the range of a possible add-on or upgrade that would benefit both the shopper and the retailer.
     Interpreted simplistically, the Nielsen Norman Group findings mean we should have advertising and sales messages composed solely of text. No graphics. No animation. My guess is such advice doesn’t ring true for professional retailers, and when advice from a retailing consultant to a retailer doesn’t ring true, it’s a signal to consider the advice with suspicion.
     A broader scope of research indicates the suspiciousness is justified. Researchers at University of Florida-Gainesville find that messages we see out of the corner of our eyes still influence us. For instance, when a customer walks briskly into your store, eyes straight ahead, any displays of featured product packages off to the left and, off to the right, brief statements of the featured products’ benefits increase the motivation to buy. In this case, the clutter helps keep the shopper’s mind from devising reasons not to buy.
     And too little mess restrains purchases in another way as well: Retailing consultant Paco Underhill tells a story about an Einstein Bros. Bagels prototype store in Utah. The problem was the bags of bagel chips were being shelved with such precision that customers hesitated touching the bags, let alone buying one. The solution? Regularly checking that the shelves were sufficiently cluttered.

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Introduce Featured Products as Customers Enter
Interpret Brain Science Advice Cautiously

Reassess Your Pricing Assumptions

Here are some updates to the research-based tactics in Retailer’s Edge about pricing. (I described most of the tactics in chapter four, “The Price is Right.”)

• Reassess the sensitivity of your target audiences to price discounts now. Consumers in countries such as Japan that in the past generally considered discounting to indicate inferior merchandise have become much more likely to use coupons and be attracted by promotional pricing. You might do a formal study of the pricing assumptions for your major product categories by employing tools like the Van Westendorp questions. A less formal look would come from tallying and analyzing the results of different price discount systems you’ve tried out.
• Analyze the reasons for changes in reactions to markdowns and then use this information to adjust your pricing strategies. For example, with consumers in Japan, the changes in attitudes seem to be due to the prolonged economic downturn and the burgeoning availability of price comparison technologies.
• In Retailer’s Edge, I described the research that said consumers pay more attention to percentage discounts than to the dollar-or-cents (or other currency) amount of the discount. There’s evidence this is changing so that dollar-or-cents-off is increasingly attractive.
• In Retailer’s Edge, I presented the compelling evidence for using just-below pricing, such as prices that end in $.99 rather than $.95. A chief exception to the rule, I said, was when your major selling point is low prices. In this case, the odd endings, such as $.43 and $.87 project the message, “We’ve trimmed every last penny off the price.” Now because consumers have become much more price sensitive, consider modifying the just-below rule. Those who are discount shoppers are reacting to $.99 prices by saying, “Are you trying to fool me into thinking I’m spending a dollar less?,” and status-seeking shoppers might consider a price ending in $.99 cents to be low-class. And most consumer mindsets are vacillating between discount and status, with the middle continuing to shrink.

     The consumer behavior findings which lead to what I'm recommending here are not as time-tested as those backing up what’s in Retailer’s Edge. I present the updates to you as cautions. That’s why I say in the title of this post you should reassess, rather than say you should necessarily revise, your pricing assumptions.

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Answer Van Westendorp Pricing Questions
Analyze the Details About Your Markdowns
Round Prices to Whole Dollars for Better-Best

Identify Influencers in Family Decision Making

When a group shops together, the total of the purchases is more than would be the total if each of those people were shopping on their own. The energy of the group and the opportunity to exchange reactions stimulate buying. Special events encourage people to shop in groups with this sort of excitement.
     When that group is a family rather than a set of friends, though, it gets more complicated. For one thing, if young children are along, the store should be set up to allow the adults to access and try out merchandise while keeping an eye on the little ones. Beyond this, selling to a family involves keeping aware of the different roles played by the family members.

• Just as with purchasing by businesses, the person doing the buying may not be the one intended as the user of the product or service. Present the appropriate benefits to each participant in the decision. For the prospective purchaser, the benefit might be cost, while for the prospective user, it might be novelty. With adults, focus on each participant as you present the benefits that will be of interest to that person. With children, be sure to look at the child when discussing benefits of interest to them, but also spend time looking at the responsible adult so it’s clear you’re not aiming to undercut the adult’s authority.
• Attend to attitudes toward spending. Researchers at University of Michigan, University of Pennsylvania and Northwestern University provide some intriguing evidence that tightwads—who recognize they should be more willing to spend money—tend to marry spendthrifts—who recognize they should be more cautious in spending money. Rather than viewing such couples as having opposite attitudes, view them as having complementary approaches. They married each other to help moderate the extremes. When making a sale, give them sufficient time to work their magic with each other.
• Attend to attitudes toward innovation. When asking a family group to try a new product category or an unfamiliar brand, you’re appealing to their attraction to novelty and innovation. Researchers at University of Western Ontario and University of South Carolina find that when the family group includes young adults and their parents, the parents’ attitude toward innovation carries more weight than the siblings’ views. The researchers advise that if you want to get the next generation to try new products, target their parents.

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

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Encourage Group Shopping
Stage Special Events to Build Sales
Offer Family-Oriented Experiences
Stay in Touch for B2B Sales
Sell Spendthrifts with Opportunity Costs

Boast About Underdog Determination

Decades ago, Avis Rent A Car System unveiled a series of ads that the trade journal Advertising Age later called one of the top ten campaigns of the 20th century. The theme of the ads: “We’re number 2 in rent a cars behind Hertz, so we try harder.”
     More recently, researchers at Harvard University, Simmons College, and Boston College found that the underdog’s appeal to consumers endures. Among other things, when a choice of chocolate bar brands was offered to the study participants, the brand positioned as the underdog was selected about 70% of the time.
     The researchers say the power of the come-from-behind fits well with the distinctively American stories of successful immigrants and of second chances met with passionate determination. Supporting this argument, it’s true that the study participants in the U.S. were more influenced than were those in Singapore by the underdog positioning. But even those in Singapore were affected. After all, every consumer in the world has felt they’re behind the leader in something at one time or another, so every consumer cheers for others in that position.
     Your retail store portrays a brand image that is as important to your success as the candy bar brand image is to the candy bar manufacturer. In your advertising, your coaching of employees, and your staff’s personal selling with customers, boast about having the determination of an underdog who is intent on being the best. For instance, share with employees and customers any stories of humble beginnings of your retail business and demonstrate the respect for customers and fellow employees that is associated with humility.
     However, do all this with care. At the same time that people root for the underdog, employees and consumers also like to associate with winners. The Avis campaign was profitable because the fundamental message was, “We’re not settling for being number 2. We’re striving to be number 1, and if we are number 1, we’ll be so accustomed to striving that we won’t be pulling back at all on our passionate determination to serving you.”

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

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Brag About Your Retailing Humility
Show Respect in Front of Customers

Juice Up Sales with Flavorful Names

The color of a product strongly influences its attractiveness to consumers. Researchers at University of British Columbia and University of Florida found that the color of orange juice was more of an influence on how taste was perceived than was information about the price of the juice or claims about its quality. And shoppers searching for the right shirt, interior paint, or nail polish pay lots of attention to hue.
     But what about the names given to colors? Is a retailer better off carrying products labeled “cherry red” rather than just “red” on the package? Is a car salesman or interior designer likely to make better sales saying “passion blue” instead of “medium blue,” even though the automobile or the carpet swatch is right there for the customer to see for themselves?
     Well, research at Boston College and University of Pennsylvania implies that Shakespeare’s Juliet may have had her accuracy clouded by love when she uttered “What's in a name? that which we call a rose By any other name would smell as sweet.”
     Unexpected color names—like “Florida orange” and “freckle brown”—build interest. Color names which venture beyond surprise to blatant ambiguity—names like “antique red” and “millennium orange”—might be better still. Ambiguous names work best when the shopper doesn’t see the actual product color first, while unexpected descriptive names work best when the product color is seen. The reason for all this is that the shopper spends mental energy trying to figure out why the particular color name was used, and consumer psychology studies find that mental involvement increases purchase likelihood.
     Are there circumstances in which it’s best not to use color names oozing with personality or ambiguity? In Art and Copy, a 2009 documentary about creative geniuses in the U.S. advertising trade, Hal Riney (who died before release of the film) described his recommendations to General Motors about introducing the Saturn automobile line. Aiming for a down-home, go-for-basics appeal, Mr. Riney advised that if the car is red, call it “red.”
     One might claim that the Saturn is no longer being manufactured because the color names didn’t have enough personality. But that would be twisting the evidence a whole bunch. GM didn’t stay with Mr. Riney’s advice. Color names for the Saturn included “chili pepper red,” “evening blue,” and “forest green.”

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

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Spring Your Colors
Lift the Spirits of Your Customers

Give Change in Varied Denominations

Let’s say you’ve held a raffle in which two customers each won $100 cash. To make things a little interesting, you give one winner the prize as five $20 bills and the other winner the prize as one $50 bill, two $20’s, and two $5’s. Each got five bills, but in a different combination of denominations.
     And now to make things even more interesting, you invite each winner to spend some of their cash with you right then on a $40 watch. The person can buy it or not using this found money.
     One of the two winners is noticeably more likely to purchase the merchandise than is the other. Which one spends more? The person with the five $20 bills or the person with the five bills of varied denominations?
     A study using parameters similar to what I’ve described was conducted by researchers at University of Iowa. Their prior study had shown that when one person has a single $100 bill and another person has five $20 bills, the person with the five bills is more likely to make a purchase.
     The person with the $100 bill had what the researchers called a “bias for the whole.” It looked like they hesitated breaking the $100 bill. Why was this? Did it have to do with a desire to avoid carrying a clutter of change? Was it because one person had one bill and the other had five bills? Those questions led to the study design in which each person had five bills to start with.
     The bias for the whole still came through. The shoppers who had the bills of varying denominations were more willing to spend their money on the watch, and this was also true when a T-shirt at $20 or a flash drive at $86 were offered. Having smaller denomination bills eased the bias to keep the whole amount.
     Lots goes into a consumer deciding whether to spend cash. Maybe it’s a match between the price of the item and the denominations of the currency the shopper has. Certainly, it’s how attractive the items are to the shopper. But the researchers’ careful four-experiment design showed how a bias for the whole has a surprisingly large influence.
     The hint for shopkeepers and reminder for restaurant servers: When giving change, deliver it in a mix of denominations to motivate further spending.

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Sell More by Adding Variety
Give Shopper Variety for Control
Randomly Arrange Limited Product Sets