Theme Like You Care

The recent death of Marvin S. Traub serves as a reminder of the importance of theming in retailing. Mr. Traub retired from Bloomingdale’s as chairman and chief executive officer. During his tenure at Bloomingdale’s, he mounted a series of themed promotional events which attracted both footsteps and publicity.
     Here are what, from a shopper psychology perspective, I see as key tactics:

• Care about the showmanship. Mr. Traub’s “Come to China” event included an entire Cantonese farmhouse at the flagship Manhattan store and rare Chinese decorative items at fourteen other Bloomingdale’s. Mr. Traub was indeed a retailing showman. His New York Times obituary says that when he began his career at Bloomindale’s in the 1950s, he’d pump up business by pretending to be a customer thrilled about the store merchandise. 
• Care about the people. Have your staff dress to fit. Invite appropriate guests. At an event commemorating America’s Bicentennial year, Mr. Traub escorted Queen Elizabeth II and Prince Phillip through a display of Wedgwood china and reproductions of English antique furniture. 
• Care about the selling. Bloomingdale’s has not been unceasingly profitable. At one point, the parent company filed for bankruptcy protection. Michael Gould, who succeeded Mr. Traub as chairman and CEO, re-conceptualized the themed promotions so that the pageantry didn’t get in the way of people wanting to spend their money. A Media Post article said Mr. Traub agreed with the change, given the state of retailing economics. Never let the crowds or the activities get in the way of your themed special event participants easily buying merchandise from you at any point. 
• Care about the carry-aways. Have themed items shoppers can take with them to serve as reminders of the event and of your store. Bloomingdale’s became known for designer shopping bags. One by artist Jonah Kinigstein was based on French tarot cards in red, black and white. 

     Mr. Traub was the impresario of themed special events. Others have found profitability in themed store atmospherics. The following four themes have been especially successful:

• Foreign country. Restaurants provide the most ready examples. Those featuring Mexican food look different from those serving Italian food, and when executed at the best, even different from restaurants serving Tex-Mex. 
• Nature. Scheels and Bass Pro Shops showcase animals and landscapes. 
• Cyberspace. The Apple Stores show off information and communications technologies. 
• Spirituality. Spas and alternative healing centers incorporate abstract themes. 

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Stage Special Events to Build Sales

Convert Averages to Trends for Analyses

Are the numbers you’re using to make your business decisions overall averages that mask trends which change over time? Do the averages represent a smoothing of extremes, none of which are typical situations?
     Many owner/operators fail to even measure their store conversion rates. You measure it by counting the number of people who come into your store during a specified period, counting the number of transactions during that same period, and dividing the number of transactions by the number of people. A conversion rate of 40% means that four out of ten people who came into your store did make a purchase.
     There are four refinements I’d add:

• Count potential buyers, not all the people who come into your store. The family of four shopping for a washing machine is highly unlikely to buy one for each family member. 
• The benchmarks for conversion rates depend on the type of merchandise or services you sell. An art gallery might be satisfied with a 1% conversion rate, while a pharmacy would expect almost a 100% conversion rate. 
• The size of the transaction in number of items and dollar amount of the purchase should be analyzed as well. 
• The most accurate conversion rates track shoppers over repeat visits. On the first visit, the shopper might ask about the items; on the second visit, consider the alternatives; and on the third visit, make the selection and purchase. 

     As traffic volume goes up, the conversion rate goes down. That is mainly a function of the availability of sales help and cash/wrap access. One significant reason people in a retail store don’t buy is that they can’t get somebody to help them and they anticipate a wait to pay. Small to midsize stores usually have the same number of staff working for a whole shift, but traffic patterns vary during that shift. Another possible reason for the inverse relationship between traffic volume and conversion rate is that during slower traffic times, those who do make it into the store might be those who are interested shoppers.
     Paying attention only to average conversion rates impedes your aligning your staffing to the traffic patterns. Take samples of conversion rates at different times of day and week. Then plot the patterns.

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

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Ease Customer Adjustment for Obeying Laws

At the start of this month, following a lead of many cities worldwide, Seattle initiated a ban on single-use polyethylene plastic bags. According to a Seattle Times article, some shoppers were caught by surprise and ended up cradling items in their arms while walking to the car.
     How would your shoppers react to such legislation? Research indicates that an irritated shopper is likely to buy less and might become spiteful. Responding to another part of the Seattle law, requiring retailers to charge 5¢ for a paper bag, a Seattle Times interviewee named Alex said he’ll be driving out of town to avoid the fee.
     Alex’s temper might cool when he figures the extra costs of travel. Or just with the passage of time. Researchers at University of South Australia tracked the responses of more than 1,200 consumers to a ban on plastic bags. They found that, regardless of whether people supported or were opposed to the ban, any resistances pretty much faded away over the four-month span of the tracking study. In Seattle, a major complaint has been no more serious than the interrupted supply of free small plastic bags for use in picking up dog droppings.
     A caution from the Australia study: People who were highly supportive of the ban before it began became more spirited in expecting others to conform. That could lead to some shoppers harassing those others who do complain.
     To head off problems, ease the adjustment.

• The Seattle law allows retailers to provide a heavy-weight plastic bag for a fee of 10¢ and small paper bags for free. Those small plastic bags used for meat, fruit, bulk items, and home-delivery newspapers are exempt, as are the large, thin plastic bags used for dry cleaning. 
• The first day of the ban, July 1, was a Sunday, which is a busy grocery shopping day. On that day, each Safeway store in Seattle offered a free tote bag to the first 2,000 customers who asked. 

     After consumers have adjusted, a plastic-bag ban might morph into more, as it did when Asda in the UK allowed customers in some stores to pay less if they brought in their own container to purchase fabric softener.
     Again, ease the adjustment.

• Decorate the container with the name of your store in large letters so that the container becomes a token testimonial to customer advocacy as others watch the container being filled. 

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Short & Wide for Reusable Containers

Keep Technology in Its Place

A few decades ago, Springer-Verlag and McGraw-Hill Japan published a book I wrote titled Computer Confidence: A Human Approach to Computers. The book found an audience among businesspeople—including retailers—who weren’t sure about the best ways to profitably employ the new digital technologies.
     Thankfully, the book is out-of-print. What I wrote there is now so antiquated. But my inspiration for writing it boils up in my brain every once in a while. What did it this time was a report in Bloomberg Businessweek that consumers are tiring of Quick Response codes.
     Only a year ago, the popularity was growing for those small, square, maze-like matrices designed for scanning by shoppers’ smartphones, tablet computers, and other portable electronic devices. The scan produces a link to an internet URL. The number of monthly scans recorded by the industry’s leading code maker had mushroomed from 80,000 in 2009 to about one million in 2010 to about two million by mid-2011. In December 2011, QRs appeared in more than 8% of all magazine ads, up from fewer than 4% at the start of that year.
     Loads of consumers were moving from “What the devil is this?” to “What fun this is!” Social psychology research findings indicated the consumer dynamic gave retailers a wonderful opportunity to build good will by coaching customers to teach friends and families how to use QRs.
     What’s turning interest around these days is that as the novelty wore off, the content frequently failed to stay engaging. Scan the QR and you ended up at the home page of the store or brand’s website, and there wasn’t much exciting there. The little maze was used as evidence that a store was technologically savvy rather than as a tool for showing an instructional video or doing something else valuable to the shopper. The BBW article tells of the boxes appearing, unscannable, on a highway billboard and inside a liquor bottle.
     On the other hand, some retailers are using the technology in ways that do add value. Quiring Monuments in Seattle can engrave a QR code into a tombstone so that a scan links to a website the departed family sets up.
     Retailers are being encouraged to embrace technology even further than now. My advice is, in doing it, be sure the technology is never just an answer in search of a meaningful question. Leave that to Alex Trebek on “Jeopardy.”

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Qualify Your Customers by Interacting

Want to swindle your shoppers? Then learn from the business model of the Nigerian 419 Scam. This is one of those where the target of the swindle gets an e-mail saying that if the target sends money or their bank account information, they’ll get an unbelievably large amount in return. It’s called the “Nigerian 419 Scam” because the e-mail solicitation comes from Nigeria and the section in the Nigerian criminal code forbidding the scam is numbered 419.
     But, of course, you don’t want to swindle shoppers. In this case, too, there’s something to be learned from a Microsoft Research paper titled “Why Do Nigerian Scammers Say They Are from Nigeria?”
     The answer to the question, according to the paper, is that the scammers want to qualify their prospects quickly. Because many people already know about the Nigerian Scam, an e-mail coming from Nigeria with improbable tales of West African riches and a request for the recipient to send their own riches will quickly eliminate all but the gullible.
     And it’s the gullible the perpetrators of the swindle are aiming to entice. As the Microsoft Research paper points out, a Nigerian Scam sufficiently profitable for the swindlers requires a substantial amount of back-and-forth coaxing. The maximum return comes from continuing to milk the cash cow. Only the highly gullible will stay with it long enough.
     It would seem that a lesson for retailers, whether or not they want to swindle consumers, is to have a question or two which enables retailers to discover if a shopper should be eliminated from consideration for making a profitable sale.
     Well, that might work when you’re screening thousands of prospects online. For the store-based retailer, the interaction should come from the start. It’s not one or two questions to the consumer you’ll use, but a series. Facilitate a dialogue. The question you’ll ask yourself is, “In what ways, if any, might this person be qualified to make a purchase here?,” rather than, “Is this person qualified to make a purchase here?”
     A related point: Keep your interactions sufficiently professional to protect against you unintentionally scamming shoppers: The scam e-mail generally includes poor grammar. Research at Carnegie Mellon University found that, for many consumers, poor grammar lowers the consumer’s guard, making them more susceptible to being cheated.
     A casual tone can open up shoppers to your positive influence. But a sloppy tone can be misused.

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Use Value Added by Third-Party Certifications

QSR reports that selected items sold by quick service restaurant chain Subway have been approved by the American Heart Association to display a mark which reads “American Heart Association Certified. Meets Criteria For Heart-Healthy Meal.”
     In addition to assisting Subway customers to avoid fatal heart attacks so they can patronize the shop in the future, displaying this sort of certificate adds comfort value to consumers for the items approved. When you have such a third-party certification, set higher profit margins on the items.
     The positive effect of a certification in the shopper’s mind spreads further than the items displaying the award. Your other items and your store itself gain prestige. People will be impressed even when selecting different products and services.
     It’s another example of the power of contagious magic in shopper psychology. Contagious magic refers to the belief—commonly encountered in consumers and usually subconscious—that two adjacent inanimate objects will exert an influence on each other. Being around the healthy items makes it seem like everything else in proximity is more healthy.
     Actually, in a reverse twist, this can increase the chances shoppers will select less healthy items.

• A research team from City University of New York, Loyola College, and Duke University found that when a healthy salad was added to a list of side dish choices, diners separately identified as high in self-control became more likely to order the French fries. 
• Children 8 to 12 years old who read on-package nutritional information which positioned the product as healthy demonstrated what Boston College researchers called a “backlash effect.” The kids went on to make unhealthier choices. This was especially true when the on-package nutritional claims were general instead of specific. The type of general claim you’d find on the American Heart Association’s Heart-Check Meal Certification! 

     In other circumstances, the third-party certification does distinguish the product from others, resulting in increased consumer interest. For a period of time, Ace Hardware dealers were being advised to set higher prices on spray paints carrying an Environmental Protection Agency certification on the label, even though the supplier cost for the product was the same as the cost for spray paint not carrying the certification.

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

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