Adjust Assortment by Use Attractiveness

When should you offer shoppers a great many choices, and when should you narrow down the choices?
     For decades, consumer behavior researchers have advised that a large variety of offerings attracts shoppers, but as shoppers get closer to wanting to make a purchase, they welcome a pruning down of variety. They prefer a smaller assortment to assess.
     Researchers at University of Maryland found this advice worked well with consumers who were toiling toward a goal over time, such as in a fitness program.
     Some study participants were given evidence they were close to reaching their individual fitness goal, while others were led to believe they were far from the goal. All the participants were then shown a set of six protein items. In some cases, the items were all protein bars differing only in flavor. This was a low-variety set. The other participants—some who felt close to their goal and some who felt far from it—were presented a high-variety set that included a protein bar, a protein shake, and four other forms of protein supplement.
     Among consumers who felt far from the goal, motivation was higher when the consumer was asked to choose among the high-variety set. On the other hand, among consumers who felt close to the goal, motivation to achieve the goal was higher when the consumer was asked to choose among the low-variety set. Similar results were found with items to be used in a diabetes maintenance program and a physical rehabilitation program.
     Based on findings like these, the researchers suggested you offer a goal-seeker a broad variety of assistance items at the start and then, as the customer feels closer to achieving the goal, offer a more limited selection.
     Now research findings from Washington University in St. Louis indicate that there’s an important exception to this advice: When a purchased item will be highly attractive to use, give a limited number of choices for decisions to be made in the future and a broader variety for choices to be made soon.
     Here, the researchers considered choices among items like chocolates to eat, ice cream assortments, vacation destination packages, and labor-saving home appliances.
     Take into account the attractiveness the consumer will find when using a purchased item and the psychological distance from the selection process. This affects whether you move from presenting a larger to presenting a smaller assortment, or the other way around.

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Limit Variety as Shoppers Approach Goals

Prepare for Natural Disasters

Not that long ago, millions of homes in America were without electrical power because of a severe heat wave. This followed a series of thunderstorms and hurricane-force winds which downed power lines across a broad swath of the U.S.
     Whatever the season and the location, disasters can cut communities down. That includes the retailing communities in the area. It was not only homes which were without power, but also the shops. Yet, talking about a prior tornado which significantly damaged almost every small to midsize retail business in Joplin, Missouri, Lori Rivera, Senior Outreach Manager for the U.S. Federal Emergency Management Agency (FEMA), told a National Retail Federation conference, “Without retail, there was going to be no recovery.”
     Prepare for natural disasters:

• Rehearse your store’s crisis management program. Recognize that consumers whose homes are destroyed or family members injured can suffer grief which leads to desperate actions. Along with gearing up to sell to your community members as much of what they desire with as few restrictions as possible, you’ll be needing to protect against hoarding and looting. 
• While it’s fair weather times, develop good working relationships with the people you’ll depend on for information, supplies, and enforcement during a disaster. Recognize that the information will flow both ways. During 2011 North Carolina hurricanes, FEMA used what they called a “Waffle House Index” to judge the damage from the storm and the progress of recovery. The WHI measured whether the restaurant in the area was open and, if open, whether a partial or full menu was being served. Waffle House restaurants planned the limited menus in advance and set rounded prices to include tax so that change for cash purchases could be made more easily. 
• Know in advance what shoppers will want during and just after a natural disaster, and then be ready to put it front and center. It should be easy to predict most of the list of products and services. But there can be some surprises. Some years back, Wal-Mart found that in anticipation of violent weather, sales of Strawberry Pop-Tarts grew more than did sales of batteries, and the best-selling product of all was beer. Researchers at University of Pennsylvania found that the anxiety accompanying natural disasters leads consumers to prefer postcards with thick borders around the edges to similar postcards without a thick border. They also preferred orderly shelves, uncluttered aisles, and unambiguous instructions. 

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

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Describe Distinctive Attributes to Experts

Guide the choices your shoppers make by discussing product attributes important to them. The number and the nature of attributes can make a difference.
     Researchers at Carnegie Mellon University and University of Southern California found that with packaged food items with which the shopper is familiar, shoppers pay the most attention to the attributes of taste and brand name, more than they do the size of the package. Researchers at University of Pennsylvania and University of Illinois-Urbana/Champaign found that across all product categories and levels of shopper familiarity with products, the attributes of color and shape have special importance.
     Researchers at University of Iowa, Northwestern University, and INSEAD-Singapore recommend describing fewer attributes to experts than to novices and emphasizing the uniqueness of attributes. In their studies with electronic products, the researchers found that consumers with limited knowledge of a product category would make choices in a store using fairly standard, easy-to-comprehend characteristics on which the various alternatives could be readily compared.
     In contrast, the expert consumers were more interested in whether any of the alternatives had fairly sophisticated features which distinguished that alternative from the other choices. They’re less likely than the novices to count up the number of features. Other research finds that if a number of alternatives receive a high quality rating on a certain attribute, the experts don’t pay as much attention to that attribute in winnowing down the choices.
     Discussion of attributes also plays a role in the categories a shopper uses, and the category in which a shopper places a product determines the comparisons they’ll make in deciding what to buy from you. If you’re selling apples, donuts, and oranges, health-oriented customers will be comparing the prices, the freshness, and other attributes of the apples with the oranges. But the convenience-first customers will be doing an apple-donut comparison.
     If you’re selling flowerpots, statuary, and seed flats, a dedicated gardener looks for the flowerpots and seed flats to be in the same shopping area. The dedicated outdoor decorator wants to compare the aesthetic attributes of the flowerpots with the statuary.
     We can guide the choices of our shoppers by the ways in which we arrange the merchandise and describe the alternatives we give the shoppers for spending their money. But it can work even better to present the alternatives in terms of the number and nature of the attributes we discover our shoppers using already.

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Discuss Attributes to Guide Choices 
Be Aware How Shoppers Compare Products

Beware Open Sell

As the shopper enters your store, she’s invited to don a colored bracelet. She can change bracelets during her visit, if she likes, knowing the color sends a message to your sales staff:

• Green means, “I have time. Please talk with me about my possible purchases.” 
• Pink means, “I’m browsing by myself. I welcome you keeping an eye on me, but I’m perfectly happy not to be asked if you can help me. I’ll come to one of you to ask for help if I want it.” 
• White means, “Please leave me alone. Without you watching my every move, I want to play around with the merchandise while I think about buying and using it. Just give me a little nook I can tuck myself into.” 

     That is actually the setup at a Clinique counter in New York City. Along with this, all the cosmetics packages are out for the shopper to touch. A few retailing consultants have referred to the arrangement as a “petting zoo sales floor.” It’s a dramatic difference from having a Clinique salesperson cajole the approaching shopper into sitting in a chair for a makeup diagnosis.
     This variation of the open sell environment tactic, pioneered by Sephora stores, also is not a dramatic innovation. For a long time now, we in retailing have been calling it “self-service.” We’re there for the shopper, but we let them pick up the products from the shelves or racks by themselves if they wish.
     Well, okay, there are some theatrical differences in the case of the Clinique counter. Beyond the bracelet gimmick, there are iPads shoppers can use to get product information and even a gadget which spritzes a bit of the cosmetic when the shopper signals which one.
     According to a Wall Street Journal video, the change to open sell has led to a double-digit growth in sales.
     Still, beware open sell. In offering to consumers products requiring a personal touch, such as cosmetics, we won’t want to miss opportunities. For instance, researchers at Washington State University and University of Texas-Austin noticed how consumers who intended to buy animal friendly cosmetics, sustainable wood furniture, and fair trade clothing very often failed to ask about those issues at the point of purchase. The consumers would use the information to make their selections if the salesperson told it to them, but otherwise seemed to prefer to stay unaware of it.

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

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Appeal to Asian-Americans’ Achievement Ethic

Improve the marketability of your items to Asian-American consumers by appealing to their achievement ethic. A report recently published by the Pew Research Center calls it a “work ethic.” However, other research suggests there’s more to it: An ethic of working hard to achieve substantial results.
     As with any statements about an entire demographic group, we’ll want to avoid stereotyping. The variations in beliefs, feelings, and intentions within a group can be greater than the differences from other groups.
     This could be especially true regarding consumers called Asian-Americans. The term is applied to those with racial roots in any of dozens of countries in the Far East, Southeast Asia, and the Indian subcontinent. In addition, today’s Asian-American consumers, unlike those from past generations, are most likely of all major racial groups to live in neighborhoods with those of other races and to marry across racial lines.
     Yet, even with all the individual differences in history, culture, language, and religious beliefs, the Pew Research Center finds a compelling commonality: They admire working hard to achieve substantial results.
     In my opinion, one reason for this commonality is that 74% of Asian-American adults were born abroad. So for one thing, these consumers retain ties to their Asian culture. In fact, half say they don’t speak English well. For another thing, these Asian-American consumers have prevailed in emigrating to America, a prime example of working hard to achieve a significant outcome.
     Here are tips for putting the Pew Research Center discoveries to work in your retailing:

• Asian-Americans tend to be more attracted to technology in products than are other groups. In selling technology, discuss benefits for accomplishing more. Also, don’t shy away from describing the work it will take to master the technology. This challenge increases, rather than discourages, interest. 
• These consumers are more comfortable when they believe they’ve earned a promotional reward. Researchers from Baruch College, University of California-Berkeley, and San Francisco State University surprised people with completely unexpected promotional gifts of appreciation. Those from the United States enjoyed their surprise gifts more than did those from Hong Kong, Singapore, Taiwan, or Vietnam. Because the reward appeared to be unearned, the East Asian recipients seemed to feel it produced a menacing imbalance. 
• Allow them to work to buy the best. For example, Asian-Americans expect much more information about product features and consumer ratings when considering house brands than when considering national brands. 

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Add Shopper Fun with Fungibility

Your shopper who feels her dollars are fungible believes that the more money she spends on clothes, the less she’ll have available to spend on entertainment, for instance. “Fungibility” means substitutability. A dollar spent on one item could have brought equal pleasure being spent on another item. At the extreme, this means the person maintains one overall budget for expenditures.
     It would seem that shoppers fully feeling fungibility would buy less than shoppers who have different categories of expenditures. When there are different categories, a shopper can dip into each one without it interfering with the others, you might think. But research at University of Chicago finds that when shoppers compartmentalize their expenditures, they become more like tightwads. They end up consuming less than they wish they had. This is especially true if an expenditure is unexpected and large.
     When you survey tightwads, they admit to making smaller purchases than they think they should. They generally believe they should be willing to spend more money. And tightwads have the money to spend. Annual income is similar for tightwads compared to spendthrifts, who believe they should be spending less. Tightwads don’t feel poor, and this is not the same motivation as with those who fret about the future.
     Tightwads aren’t the same as frugal shoppers. Frugality is driven by a pleasure in saving. Tightwads are driven by a pain of paying.
     So add fun for shoppers who compartmentalize expenditures excessively. Do it by stimulating fungibility. Here, too, there’s a bit of a surprise. Researchers at Yale University, Arizona State University, and Singapore Management University saw little use in saying to tightwads, “By getting a good deal on this item, you’ll have more money available to buy other items.” It’s not that the tightwads aren’t influenced by this reasoning. Rather, it’s that they’ve almost surely thought of it, so they’d consider a retailer telling them it to be a waste of their time.
     Instead, research suggests, catch things at the point where the customer is deciding into what category to place a large, unexpected expenditure. Specifically, findings from Princeton University and New York University indicate, encourage the customer to assign the expenditure to a category called “exceptional purchases.” The meaning of “exceptional” here is “unusual,” but the word works better because it also implies “superiority.”
     In switching the booking of the expense, you’re moving the shopper’s reasoning toward fungibility of money.

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