Utilize Multichannel with Hedonic Selling

Retailers have been led to believe it’s wise to encourage consumers to shop offerings via multiple channels. Face-to-face in-store. Online via mobile devices. Telephone orders. A booth at community events. And more.
     Early in the drive toward multichannel retailing, Saks Fifth Avenue customers who shopped at both Saks.com and at a Saks store were spending five times as much as customers who used just one or the other.
     Now findings from studies at University of North Carolina-Chapel Hill and Texas A&M University have refined the advice: Multichannel retailing appears to be most profitable when people are seeking pleasure-oriented products and services. Perhaps the reason is that these shoppers find enjoyment in a variety of shopping experiences. One way they obtain this is to shop at different stores. Researchers at University of Pennsylvania and Columbia University speculated that the novelty increases the amount the consumer is willing to pay. Your customers might be shopping around even for products they could purchase from your store because they seek the stimulation.
     Rather than let go of these hedonic customers, explore ways to make their shopping experience more varied. That’s what multichannel retailing does.
     The North Carolina/Texas researchers found that for utilitarian items, purchased more for function than for sensual pleasure, multichannel appeals aren’t best. Among consumers who consider the utilitarian purchase to be high risk, the most valuable segment consists of those who buy online rather than in-store. Online shopping offers the opportunity to corral abundant opinions from an array of sources.
     Still, you’d be wise to encourage in-store visits from these customers. Talk and write about the talents of your staff in providing guidance to reduce uncertainties in buying items. And even if the purchase is made from your online channel, offer incentives for the customer to pick up the item from your store. Consultants to retailer REI have reported that when REI.com customers come into the REI store to pick up items they ordered online, as more than one-third of them choose to do, those customers buy an additional $75 in merchandise, on average.
     Another way to expand your multichannel retailing thinking is to remember paper catalogs. Along with in-store, catalogs were the channel most profitable for retailers among consumers considering their utilitarian purchases to be low-risk. Research indicates that catalogs are at their best with items where sales benefit from large picture spreads and an abundance of textual description.

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Mash Up Store & Online for Gamification

Incorporate casual games into your product lines. Casual games are distinguished by the shallow learning curve—you can start playing at a primer level right away—and by how players commonly intersperse brief play sessions into other activities.
     An argument for you selling casual games is the popularity. Last October, Roland Berger Strategy Consultants estimated that 25% of the world’s population and 50% of Americans were casual gamers. The distribution is skewed toward women and teens, both of whom are the kinds of people who buy all sorts of items.
     A prime argument against you including casual games in your product line is that about 90% of people will download a game without paying for it or expecting to pay. If you’re charging for Angry Birds, which has been downloaded more than one billion times, a 10% conversion rate does fine in paying the bills. But most games are not that popular on their own.
     In addition, store-based retailers wouldn’t want to depend on an online sales channel.
     Still, you can combine the store-based with the online. For instance, how about sending your target audience members out on a scavenger hunt? That’s the game where you give participants a list of items to find and maybe clues to finding the items. The first player or team to fulfill the list wins.
     It’s said that renowned party hostess Elsa Maxwell coined the name in the 1930s. Since then, store/online scavenger hunt blends have been used by retailers to build excitement and knowledge about offerings. Here are two examples:

• A promotion for Dodge dealers attracted more than one million YouTube hits. The viewers were watching people finding one of the three Dodge Journey cars hidden in a scenic U.S. location. Each clue included information about the Journey’s features. 
• Cathay Pacific introduced its non-stop Chicago-Hong Kong route with a challenge to collect experiences. Post a photo of yourself at the entrance to Chicago’s Chinatown and then a photo of yourself reclining in the Cathay Pacific business class “Comfy Seat” sample at O’Hare Airport. 

     Shoppers have always loved playing games. Scratch-off discounts. Sweepstakes. “Design our new logo” or “Name our new service” or, decades ago, “Tell us in 25 words or less why you shop at our store.” Tap into that spirit, with a blend of the virtual and real worlds.

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Invert First Impressions Via Reverse Psychology

Asking consumers to do one thing can result in them doing the opposite:

• Researchers at University of Miami, University of California-Berkeley, and Hong Kong University of Science and Technology found that study participants assigned to remember “savings brands” slogans like Walmart’s “Save money. Live better” were willing to spend twice as much as those exposed just to the Walmart name. 
• Chrysler Group—the company selling the Ram truck—paid for a marketing campaign which included hate mail about Ram truck drivers. The objective was to stimulate protestations of love for the truck. 
• On a Cyber Monday, outdoor gear retailer Patagonia ran an ad headlined “DON’T BUY THIS JACKET.” Sales of the jacket warmed up notably, and Patagonia’s “buy less” campaign ended up contributing to revenue increases of over 30% in 2012, according to Bloomberg Businessweek. 

     Reverse psychology’s a delicate strategy. Still, there are circumstances and ways in which you can mobilize it to boost profits.
     The Patagonia ad was tongue-in-cheek. Nobody thinks a store would urge you not to buy their offerings. Even when you truly are. Following Hurricane Sandy hitting America’s Eastern Seaboard, a New Jersey supermarket broadcast in-store appeals for people to buy no more than what they’d need for a couple of days. Shoppers paid little attention to the appeals. A retailer telling shoppers not to buy is unusual enough to lead to a pushback. “It’s still a free country! Nobody’s telling me I can’t buy as much as I want!”
     With this New Jersey supermarket’s appeal, I also imagine the customers thinking, “The best way to make sense of this strange request is to assume the stores around here will be completely running out of supplies. So I’d better buy for my family, friends, and myself.”
     With the Patagonia ad, the easiest way the reader could make sense of the bizarre headline came from noting the accompanying pitch to take a pledge to join the retailer in reducing waste. Shoppers would want to reward such social conscientiousness. What more straightforward way to deliver a reward than to spend your money with them?
     Reverse psychology delivers its effects—desired in the case of Patagonia and Ram, undesired in the case of the New Jersey supermarket—when consumers have a way to rationalize doing the opposite of what’s being requested. Also, once that rationalization exists, the stronger the retailer’s request, the more likely is the inverse action.

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Abstract Shoppers to Avoid Choice Overload

Large product assortments attract shoppers to a store, but once there, many of the shoppers avoid making a purchase because they’re not sure what’s best. Because of indecision, they might leave the store.
     Studies at Yale University, University of New South Wales, and Peking University indicate that you can avoid this problem by encouraging the shopper to think in more abstract ways, such as about features the items have in common rather than considering each item in the choice as unique. Similarly, researchers at University of Delaware and University of Pennsylvania discovered that a way to keep shoppers engaged is to encourage them to focus on product features rather than item alternatives. With the features in mind, the person can start rating each alternative until coming to a decision.
     So in your marketing, point out how you offer a large number of choices. When a shopper starts the shopping with you, display categories within categories to highlight the abundance of alternatives.
     Then recognize the potential for choice overload.

• To make things easier for the shopper, use similar wording in describing the features of each product. And provide tables that list features across the top, the names of a small selection of product alternatives along the left side, and checkmarks in the cells to indicate which product has which features. 
• In the product descriptions and in the table, describe features concisely. Outside the table, state the benefit of each feature: “Low rolling resistance gives you better fuel efficiency.” 
• Include no more than five of the most important product features and no more than five of the product alternatives. If the product alternatives are highly similar in what features they have, include one or two trivial features which one or two of the alternatives have, but the others don’t. This helps unfreeze the decision maker who is immobilized by information overload. 
• Make it easy to choose more than one alternative. Say something like, “As you noticed, this sweater comes in five designs. Which of those designs might you want to buy?” In signage, list the flavors along with the text, “How many flavors do you want?” Offer a discount for multiple-item purchases. Set a package price that results in a lower per-item cost, such as six pairs of socks, two each of the three most popular colors. 

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Nudge Shoppers Toward Profitable Habits

A recent New York Times feature describes a bundle of research-based tactics supermarkets have used in programs to influence shoppers to buy a greater quantity of fruits and vegetables instead of less healthy processed food alternatives:

• Installing a mirror inside the cart so that the shopper will see his or her face. This increases personal accountability. 
• Instead of the mirror, installing a reflective card informing the person about how other shoppers were buying bananas, limes, and avocados. Social norms often guide people’s behavioral choices. 
• Dividing the cart into a front and back section with a strip of yellow tape and then instructing shoppers to place the produce in the front section and the other items in the back section. This increases food choice awareness. 
• Laying down large floor mats with green arrows pointed toward the produce aisles. Shoppers unfamiliar with the store might go by those aisles because they think they’re being directed to do so. Shoppers familiar with the store might follow the arrows out of curiosity. In both cases, the more footsteps passing by the fruits and vegetables, the greater the odds for body-friendly goods to end up going home. 

     If one of these tactics is good, would two or more be great? No. In El Paso, Texas grocery store trials, implementing either the reflective cards or the arrow floor mats raised produce sales, but using both of them at the same time caused produce sales to drop.
     How about going bigger with one of the tactics? New Mexico State University researchers experimented with a full-length mirror right inside the entrance to the grocery store. No reported effect on produce sales. It seems better to have a small mirror facing the shopper in the face for the duration of the travel up and down store aisles.
     The results from psychologically nudging shoppers beat out results from trying to psychologically beat shoppers into submission. Other examples:

• In personal selling, use rhetorical questions—yes/no inquiries to which the answer is felt to be so obvious that no reply is necessary—only after you sense that a customer wants to make the purchase, but needs a bit of a nudge. 
• A brief mental nudge of customers toward them thinking in the long-term significantly increases the possibility they’ll spend more money in your store. But a mental bludgeon against considering short-term consequences is likely to backfire. 

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Shape Benefits As Hedonic or Utilitarian

The importance of a particular dichotomy among shoppers and another dichotomy among items has been repeatedly verified by consumer psychology research:

• Some shoppers are primarily promotion-focused, while others are primarily prevention-focused. Promotion-focused people play to win, while prevention-focused people play not to lose. 
• Some items have a primarily utilitarian appeal, while others have a primarily hedonic appeal. The utilitarian is to get a job done. The hedonic is to feel pleasure. A convection oven has utilitarian appeal. The uncooked cherry pie purchased for preparation in the convection oven has hedonic appeal. 

     In general, promotion-focused shoppers are more attracted to hedonic benefits than are prevention-focused shoppers. The prevention-focused are more attracted to utilitarian benefits than are the promotion-focused.
     As you get to know your shoppers, determine where on the promotion-prevention dimension each individual is and shape your benefits statements to fit.
     Researchers at Curtin University of Technology in Australia and Nanyang Technological University in Singapore give as an example ads for yogurt. I’ve adapted those examples so each contains exactly the same number of words:

• Hedonic. “The yogurt comes in a wide range of fruity flavors, like strawberry, apricot, mango and kiwi, in addition to the original tangy flavor. This makes our yogurt a wonderful choice for every occasion. You just cannot resist the temptation of its fruity taste. In addition to the wide range of flavors mentioned above, the yogurt contains real fruit chunks for added taste. You can actually see the chunks of fresh ripe strawberries or mangoes that have been added to the yogurt to tingle your taste buds. The pieces of fruit have been especially added to blend with the original rich and creamy taste, thereby completely delighting you gastronomically.” 
• Utilitarian. “The yogurt is made from calcium and vitamin-fortified milk. It is specially formulated to capture the goodness of high calcium yogurt. In addition, its formulation also ensures that it has absolutely low levels of fat. It is, in fact, 97% fat free. The yogurt has essential bone nutrients, like vitamins D and K, in addition to other nutrients like zinc and magnesium. The presence of these nutrients helps you maintain strong bones, especially important in adults. The yogurt contains two live cultures, Streptococcus thermophilus and Lactobacillus bulgaricus. Consuming yogurt with live cultures maintains a balance of bacteria in your digestive system, which helps ensure your ongoing good health.” 

     What phrasings will work for your items?

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