Stop the Nagging Among Shoppers

Shoppers don’t like being nagged. By you or by each other. Especially by their own kids. Too much of it, say psychologists at Duke University, and the shoppers get anxious to bolt out the door. And you lose the sale.
     This could be a particular problem at the cash/wrap. So how about the decision by Hy-Vee supermarkets to remove candy bars, gum, and other sweet treats from checkout counters throughout the chain?
     It’s not a brand new idea for Hy-Vee. In January 2011, some Hy-Vee stores introduced the change. It’s also not a brand new idea in the industry. Back in 2007, Loblaw Companies Limited, as Canada's largest grocery retailer, began gradually rolling out what they called “Clutter-Free Check Out Lanes.” If you wanted your candy, you bought it in the larger package in the candy section of the main store.
     Hy-Vee publicized the checkout lane system as a healthy living initiative. Hy-Vee also hires dieticians to be on store staffs. Loblaw said the change was to make the checkout process quicker. They also removed magazines and batteries from the cash/wrap area.
     But there’s also the nag factor. Loblaw got congratulations not only for cleaning up the overstuffed cash/wrap area, but also for enabling parents to guide their children and themselves through candy-free alleys, making it less likely the whole family would end up overstuffed. Superquinn, one of Ireland’s most respected supermarket chains, removed the candy from the checkout counters because, company founder Feargal Quinn was quoted as saying about the kids, “They kick up blue murder until the mother buys them something from the display of goodies.”
     It’s true that Mr. Quinn anticipated losing considerable revenue by preventing sales of the nag-buy items. And Loblaw may have been cheating company stockholders out of dividends by forgoing the chance to make all those small last-minute sales when a shopper is waiting in line.
     Hy-Vee did not transform all the checkout areas in a store to the healthy food format. We wouldn’t want to nag shoppers into giving up candy if they choose to indulge or if they actually welcome the kids kicking up blue murder so that the adult has an excuse for stuffing the stuff in.
     In your retailing, give the consumers choices. Also stay aware of ways you can head off the types of nagging among shoppers which irritate some of those shoppers.

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

Click below for more:
Prime Your Shoppers Below Awareness
React When Faced with Reactance
Make Waiting in Line Interesting

Treat Shopper Psychology as a Science

“Science will unquestionably play a larger role in determining pricing strategies in the future. In the interim, a certain amount of art and psychology remain in play.”
     Such is the conclusion of an article in the current NRF Stores magazine. A retail pricing specialist is quoted as saying “Part of pricing is psychological — it’s an art form.” The implication: What’s psychological is not scientific, but rather highly subjective.
     With this view, retailers miss profitability opportunities. For one thing, there is a never-ending stream of high-quality shopper psychology research findings to inspire specific, verified tactics. Another problem with the “psychology as fuzzy art” approach is that it too often generates a view of the shopper as addled and the goal of the retailer as exploitation. Also attributed to the retail pricing specialist is a quip that the hallmark of any good pricing strategy is the ability to confuse shoppers such that they’re not sure what the price should be.
     Sure, some of what masquerades as shopper psychology advice to retailers is junk. In giving suggestions, people with years of experience in retailing may fail to check what high-quality research finds. Our human brains are quite biased when perceiving, interpreting, and remembering experiences. The best shopper psychology advice derives from both research findings and in-store experiences.
     Treat shopper psychology as a science, and in your daily decision making, take a scientific approach:

• To what degree are you basing the decision on the outcome of a similar decision you’ve made yourself or which was made by others whose judgment you trust? Check that the degree to which you’re doing this is not more than the degree of similarity of the current situation facing you to the situation occurring with the basis decision.
• Are there more reasons to take the action or more reasons not to take it? Put somewhat more time into evaluating the side with the smaller count of reasons than the side with the larger count.
• What is the evidence that the numbers and stories you’re using to make your decision are overall averages that mask a wide range or are extremes that mask typical situations?
• Always know that “information” is not the same as raw data. Information has implications for action. It directs you toward what to do or not do. Be careful that you don’t take false comfort by bathing in lots of warm data that aren’t information.

Click below for more:
Slip in Superfluous Choices
Stamp Out Bias in Your Decision Making

Hide the Cake After Delegating Decisions

Delegate decision making to employees, advisors, and vendors so you can spend time working on your business, not just in your business.
     But in a set of four experiments, researchers at University of Alberta identified a threat to profitability for the retailer who delegates highly important decisions: After granting the authority, responsibility, and accountability, you become more likely for a while to make your own other decisions in less healthy ways.
     In one experiment, consumers were asked to assume they’d suffered a wrist injury. Some of the consumers were asked to go on to assume they delegated all the treatment decisions to a physician. The others were asked to make the treatment decisions themselves individually. Assignment to one or the other of the two groups was done randomly.
     Next, each consumer was offered the choice between two rewards for participation in the study—either a fruit salad or a piece of chocolate cake.
     Lots of previous research had shown that when a consumer is called on to exercise a great deal of mental effort, the consumer becomes more likely to select a tasty, less healthy treat over a healthy, less tasty treat. In the Alberta study, the question is who was exerting more mental effort—those who delegated the treatment decision to the physician or those who made the treatment decisions themselves. Which group was more likely to pick the chocolate cake?
     What’s your guess?
     You might think it would be the consumers who kept the responsibility. That seems harder than giving it up to somebody else. However, it was actually the delegators who chose the chocolate cake more often.
     Wrist injuries are not the same as retail business decisions, and choosing chocolate cake is not identical to a retailer making a choice unhealthy for the business. Still, the Alberta researchers’ analyses indicate the underlying psychological dynamics are the same. Delegating important decisions causes managers to question their competency—even if briefly—and struggling against this self-doubt consumes substantial mental energy. In another experiment, delegating important decision making resulted in an increased tendency to purchase merchandise without adequately analyzing the consequences.
     The solution, the research suggests, is for the retailers to remind themselves of important decisions they made well in the past and to maintain authority, responsibility, and accountability for the consequences of delegated and non-delegated decisions.
     It also wouldn’t hurt to hide the chocolate cake for a while.

Click below for more:
Delegate, Empower & Collaborate
Check Your Optimism When Dealing with Vendors

Criticize Employees with Care

Researchers at business consultants Ferrazzi Greenlight assessed the level of organizational candor at each of six banks by interviewing the executives. The researchers then related the level of candor within the organization to the financial performance of the bank. Sure enough, those banks where the executives were willing to criticize each other showed the best financial returns, including during our latest global economic crisis.
     A willingness to criticize. However, the criticism wasn’t targeted toward personal characteristics. It was targeted toward the job of the bank as a retailer. Other Ferrazzi Greenlight studies at fifty businesses over a three-year period supported the value of criticism with care. Based on these findings and those from other researchers, here are a few techniques to improve the financial performance of your retail business:

• Coach employees to give caring criticism. “I might suggest,” and “Please think about this,” proved to be nice ways to introduce the criticism. “Thank you for the suggestion,” and “I assure you I will carefully consider what you’ve said,” are good ways to receive the criticism. Coaching is a process, not an event. Creating and maintaining an arena for caring criticism requires continuing diligence. Talk about personal responsibility rather than personal blame.
• Hold team meetings with three people. Not all the team meetings, mind you. You’ll also want huddles and special events in which every salesperson, or sometimes absolutely every employee, is included. But the evidence is that caring criticism is better given and received in small groups. The limited size avoids a sense of people ganging up on an employee. Three people is a good size. The person receiving the criticism can receive two perspectives from the others. This is enough to bestow credibility on justified suggestions, but not so many that the target feels overwhelmed.
• In larger meetings, assign one employee to facilitate caring criticism. This person should not be the leader of the meetings, whose attention is taken with the meeting agenda. But the leader does have a necessary role in the process working. Often, decisions must be made in a meeting and teamwork developed. Therefore, if the criticism is taking too much time or is taking an overly personal tone, the leader should ask the criticism coordinator to hold off. At other times, the leader will stop the meeting flowing forward in order to ask the criticism coordinator to ensure there is an openness to candor.

Click below for more:
Take Employee Suggestions Seriously
Fix the Problem, Not the Blame

Compromise Effects with Shopper Segments

Anticipating trends is a valuable skill for retailers. Also valuable is an awareness that a trend can wiggle around, level out, and move into reverse. Moreover, a trend that holds true for one consumer segment might not hold at all for other consumer segments.
     An exemplar of all this is the changing strength of what consumer psychologists call the compromise effect: When a shopper is faced with a good-better-best choice, the typical shopper tends toward the middle alternative.
     Traditional research found the compromise effect to be robust, allowing retailers to shape shopper behavior by the choices presented to the consumer. You’d put in the middle the choice you thought would be best for satisfying the shopper’s needs and your profitability objectives.
     Then began a trend toward what I’ve called barbell retailing: Consumer choices moved away from middle markets. Movement to the extremes becomes more likely at times of uncertainty, and consumers worldwide were experiencing economic uncertainty.
     The implications for you, the retailer:

• In your merchandising, feature both premium and bargain choices for product lines. If you need to save on inventory expenses, deemphasize the midrange choices.
• For any midrange lines you do carry, project a strong lifestyle personality of staying the course and showing perseverance in the face of uncertainty.
• Avoid the extreme extremes. When the weightlifter loads up the barbell for a total 130 lb lift, they’ll put the 50 lb weights on first, then the 10 lb weights outside the 50 lb ones, and then the 5 lb weights outside the 10 lb ones. Keep the shape of that barbell in mind. Your shoppers are moving out from the center, but only a minority are moving all the way out to the highest luxury or the deepest discount preferences.

     But, wait. The compromise effect trend wiggled with mood: When shoppers are worried, but determined to make the purchase rather than defer the decision, they seek the compromise alternative and will look for it as the middle alternative. Not the highest-priced or lowest priced, but the middle-priced. Not the highest quality or lowest quality, but the medium quality.
     Now, a more recent study at Otto-von-Guericke-University and Karlsruhe Institute of Technology in Germany indicates that it makes a difference whether your shopper is more interested in quality or price. The compromise effect is currently strong among the segment of quality-seeking consumers, but weak and insignificant among the price-conscious segment.

Click below for more:
Strengthen Your Barbell Retailing
Rearrange When the Chips Are Down

Color In the Black Beauty Lines

Want to stay in the black—call that “black beauty”—and out of the red—okay, “massacre red”—when graphing your financial status? Then remember how color names you use for retailing make a difference.
     Are you 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 customers to see for themselves?
     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 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.”
     So don’t get too precious about creating names for colors. Comic Mike Dobbins claims a guy where Mike was employed kept arguing with everybody in the office that his pink oxford shirt was actually salmon. When the whole thing became too much of a distraction, Human Resources brought in an expert to settle the dispute. The expert—a grizzly bear—made fast work of it.

Click below for more:
Juice Up Sales with Flavorful Names