Stack Discounts for Thrust or Surprise

With stacked discounting, a retailer piles a second after a first. “Now take an additional 25% off the already 20% discounted price.”
     What are the best ways for a retailer to present stacked discounts?, asked researchers at University of Virginia and Virginia Tech.
     The answer is that it depends on whether the shopper encounters both discounts at the same time or at separate times in a way that the second discount is a surprise. The ecommerce shopper might see the first discount while browsing through the pages, and then a screen pops up reading, “An additional 25% off the discounted price for new customers!” The two discounts have been seen simultaneously. Or a consumer might have seen an ad for the 20% discounted price last week and today sees the updated offering as part of a closeout sale. The two discounts are seen sequentially.
     The studies found that with simultaneous presentation, the first percentage discount the shopper sees assumes an outsized role. If we’ve designed the announcement of the discounts in a way that we can predict which will be seen first, make that first discount the larger of the two. If we don’t know which will be seen first, it doesn’t matter which of the two discounts is larger.
     The same rule operates for surcharges as for discounts. The researchers used as an example a baker who charges $17 for a standard-sized cake, levies 10% more for a large cake, and an additional 5% for a custom design. The relative sizes of the surcharges won’t matter for price perception if all the figures are presented at once.
     With sequential presentation in which the second discount comes as a surprise to the consumer, it works differently. The second discount has more influence than the first in the shopper’s perception of how good a deal they’re getting. In this situation, it’s best if the second percentage is the larger of the two. There could be more than two steps in the stack. In Expiration Date Based Pricing, the retailer progressively lowers the price of items as the expiration date approaches.
     Whether with simultaneous or sequential discounts, shoppers may estimate the total off the original price, and that usually results in overestimation. With a 25% discount off of a previously discounted 20%, the discount from the original price is 40%, but most people judge the discount to be closer to 45%.

For your success: Retailer’s Edge: Boost Profits Using Shopper Psychology

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Make Space for Socializing on the Corner

The notion of a convenience store is that shoppers will be able to pop in, make a purchase, and pop out. This is for the consumer on a quick trip mission. The notion of a corner store, such as a small-footprint independent grocer in a residential neighborhood, is different, suspected researchers at Thaksin University and Prince of Songkla University. They set out to evaluate what environmental attributes of a corner store made the most difference to neighborhood shoppers.
     The experimental methodology consisted of presenting 241 consumers 3D simulations of corner store interiors in a format resembling a video game. The simulations varied on ambient cues, such as the comfort of lighting and sound levels; design cues, such as the ease of reaching and selecting packages; and socialization cues, such as the presence of salespersons or other customers. The three types of cues were varied among the simulations, and for each simulation, the consumer was asked to indicate how likely it is they would want to shop at that corner store.
     It turned out that the most important of the three to the study participants was ample allowance for socializing. Shoppers want to have conversations and meet locals like themselves. Ambiance and design do count, but with these consumers, cues for socializing were tops.
     A challenge for corner store operators who want to make space for socializing is that the physical space is limited and what is available needs to be occupied with merchandise. A primary reason people come there is to purchase items, and these people expect an adequate variety in stock and on display. 
     One way around the challenge is to allow extra space for standing in front of food and food-related items you sell. The Nielsen Company, which tracks consumer sentiments, calls food “the social network of the ages.”
     Beyond this, the corner store operator should think of other ways to maintain a psychological space that stimulates socializing. The researchers say store staff who do this are described by shoppers with words like sincere, understanding, and caring.
     The study was conducted in Thailand, which is a collectivist society, and 71% of the study participants were female. For shoppers from individualistic cultures and for certain populations such as young men, the importance of public socializing spaces is probably less. Still, even these consumers might once in a while prefer a friendly corner store to a mission-designed convenience store.

For your success: Retailer’s Edge: Boost Profits Using Shopper Psychology

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Up the Experience Purchase Quality

Experiences for sale differ from merchandise offered, where a physical product is delivered, and from service purchases in which the deliverable is intended to satisfy a need for the consumer instead of with the consumer. Because of this, the metrics are different. How do shoppers evaluate experiences they’ve purchased and consumed?
     Researchers at University of North Carolina-Wilmington and Mississippi State University identified five dimensions. The researchers also found that when a retailer ups the experience purchase quality on these dimensions, the consumers become more likely to recommend the experience to others and become less sensitive to the pricing for repeating the experience themselves.

• Escapism. To what degree did the experience allow the consumer to remove themselves from the demands of ongoing life? Some physically punishing experiences, such as running marathons, can allow for high escapism. To improve escapism, eliminate references to fees once the experience begins. 
• Social congruence. To what degree does the consumer believe and feel that the expectations of others with whom the consumer participated in the experience were fulfilled? To improve social congruence, check that shoppers understand the nature of the experience and encourage them to bring friends they’re confident would share the pleasure with them. Or for consumers who prefer to “bowl alone,” allow for a minimum of social interaction. 
• Servicescape. How appealing is the physical environment in which the experience occurred? To improve servicescape, regularly monitor consumers about their preferences for temperature, noise, and aesthetic design. 
• Fun. How happy did the consumer feel during the experience and when recreating the experience in their memory? To improve the fun, provide memory aids, such as the opportunity to take away photos and gift shop souvenirs. 
• Distinctiveness. How different is the experience from what else the consumer has done? To improve on this, recognize how what seems to be an identical experience can be different for the consumer. People might seek out details they missed before due to limitations of attention. 

     Not all five dimensions operate the same way for all experiential purchases. Customers put a relatively heavier emphasis on escapism and social congruence with shorter experiences, such as attending a concert. With multiday experiences such as a resort vacation, greater relative weighting goes to servicescape and fun. The importance of distinctiveness depends on age. The excitement of novelty is more likely to be sought by younger consumers, while older consumers generally seek the calmness of familiarity.

For your success: Retailer’s Edge: Boost Profits Using Shopper Psychology

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Crush Close Ones with Schadenfreude

There are consumer motivations which consumers might be ashamed to acknowledge to others. Among those motivations is what is called schadenfreude, which means deriving delight from seeing others’ ambitions being crushed. Among researchers, schadenfreude has been attributed to envy, to raw hostility, and to the sort of emotion tunnel vision which keeps us from acknowledging the pain caused to the others.
     Still, there are times when schadenfreude is considered acceptable, such as with sporting events. Researchers at University of Georgia point out how viewers of NCAA football, ATP men’s tennis, and WTA women’s tennis games can feel fine about cheering wildly when the fan’s favored team or player crushes the competition. The researchers also note that those three leagues employ instant replay video as a tool for officiating calls and that when those IRVs are shown during televised sporting events, there is often a small ad accompanying each. The researchers wondered if the experience of schadenfreude improves the impression of the brand being advertised.
     It seems that it does. In a laboratory setting, people who viewed a favorable call made in a suspenseful game based on the IRV formed a more favorable view toward the advertised item. In other situations, too, we’d expect that a feeling of prevailing in a suspenseful situation would reduce resistances to favoring and then purchasing merchandise, services, and suppliers associated with the domination. People like to be associated with a winner, and the joy with that is greater when the chance of winning is not a shoo-in. People also enjoy rooting for the underdog who aims to overachieve. So there is a payoff for the advertiser when the outcome was somewhat suspenseful.
     That’s true with your retailing team, too. Researchers from University of Pennsylvania recommend that you keep your retailing team a little bit behind the competition. The payoff is that your team will exert a greater effort. These researchers analyzed 60,000 basketball games, including 18,000 National Basketball Association matches. They found that teams which were behind by one point at halftime were more likely to end up winning the game than were teams ahead by one point at halftime. Note that this held only when the team was a little bit behind. Overall, for every two points a team was ahead at halftime, the chances of winning the game increased by about 7%.
     For both you and your customers, winning a close one gives joy, and part of that joy may be the questionable variety called schadenfreude.

For your success: Retailer’s Edge: Boost Profits Using Shopper Psychology

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Chill Out Emotions to Look Cool

If your target audiences say they’re aiming for cool brands and stores, this might mean they want to conform with their social peers, they want to go beyond conforming with their social peers, or they just want the latest gadget. Among young people, “cool” might signify nothing more than a favorable evaluation.
     But what does it mean when consumers say they prefer to deal with salespeople who are cool? Researchers at University of Arizona, Texas A&M University, and University of Chile found retailers often think it means consumers want the salespeople to show minimal emotional expression. Such is in the tradition of fashion models who look as indifferent as possible and celebrities who earn coolness by masking any feelings.
     The researchers say this generalization is an oversimplification. When facilitating cooperation—as is true in most sales situations—you’re better off with a gentle smile than with a somber countenance. A smile facilitates interpersonal trust. Sure, excessive emotion easily appears to be insincere or as a symptom of excessive sales pressure. But in these circumstances, looking cold isn’t cool.
     On the other hand, in status-oriented or competitive situations centered around dominance, you do best to chill out your emotions, say the researchers. This is useful when selling to teens, who expend considerable energy dominating their adolescent insecurities and who consider effusive shows of emotion to be decidedly uncool. Or in any negotiations where establishing authority takes precedence over cultivating trust.
     Curbing emotions in order to look cool also is useful when selling luxury items to consumers who aspire to achieve higher status. In a study of female shoppers in an economically emerging Asian city, researchers at National Chengchi University and Shih Hsin University found evidence that interest in impulse purchases of luxury items increased if the salesperson was snobbish and the shopper was with a companion.
     From a different perspective, emotional coolness, even if not to the extreme of inattentive snobbishness, might serve to model valuable skills with overenthusiastic shoppers. For example, researchers from University of Zurich contend that what distinguishes consumers who live happily into their advanced years is a habit of being cool. Senior coolness, they say, is composure and poise which reduces problems of daily living to manageable levels. Plus we can help older adults evade fraud by encouraging them to enter the consumer situation calmly and maintain calmness during the transactions. That’s more likely when the salespeople are themselves cool.

For your success: Retailer’s Edge: Boost Profits Using Shopper Psychology

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See the Handwriting at the Mall

Brands managing to consistently distinguish themselves amidst the maelstrom of surrounding suction on shoppers’ attention must humanize relationships with consumers. You have been warned!
     Researchers at Babson College and University of Innsbruck, recognizing this handwriting on the wall, propose a novel method to accomplish the humanization—use fonts which resemble hand printing, incorporating the slight imperfections and inconsistencies absent from machine-written typefaces generally found on labels, ads, and signage. The handwriting-style fonts used in the studies included Moon Flower and All Things Pink.
     Indeed, the researchers did find that the use of these fonts enhanced the perception of a human connection with the shopper, resulting in more favorable brand evaluations and actions. However, this was true only for entities in which emotional attachment sells. For strictly utilitarian store and product brands, handwriting-style fonts can come across as unprofessional. In one of the research studies, a handwriting-style font in place of a machine-written font enhanced impressions of a decorative candle, but worsened perceptions of an insect repellent candle.
     There are other ways beyond use of type font to develop the human connection, and the researchers found that when a strong emotional bond with the item already existed, use of one font or another made little difference. Among these other methods is anthropomorphizing. Anthropomorphized products have human-like characteristics. This might come from how the item looks, in a picture or name of a person on the packaging, or in the way an advertisement or the salesperson describes the item. Anthropomorphism makes the item more like a friend.
     Researchers at Northwestern University, University of Cologne, and South Korea’s Sungkyunkwan University find that a properly anthropomorphized item gains the persuasiveness of a human salesperson. This decreases the shopper’s feelings of responsibility for purchasing the item. The shopper can blame the item for them giving in, just as they would blame a compelling sales pitch. “I couldn’t help myself.”
     Beware the risks, though. Research at Drexel University, Lehigh University, and Monmouth University indicates that humanization of the store increases sensitivity to price changes. Shoppers are more likely to see price increases as efforts by the store owner and the item supplier to profiteer. And do stop short of making the humanization so precious it impedes consumption. A striking example of anthropomorphism given by one group of researchers was for Crunchy Cheetos snacks: “Schedule a break with some crunchy orange friends. Then eat your friends.”

For your success: Retailer’s Edge: Boost Profits Using Shopper Psychology

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