Shorten the Term of Retail Therapy

Why does retail therapy—the intentional use of shopping by people who are feeling sad in order to improve their mood—work?
     Researchers at University of Michigan say the mechanism of action is restoration of control. Sadness generally arises from perceptions that situations are controlling one’s life. Deciding to go shopping and then doing it verifies to the person that they can assert themselves in the face of difficult situations. Making choices during the trip is another signal of being in control.
     Other research suggests related explanations for the documented success of retail therapy. Rubbing elbows with other shoppers meets the need not be alone in the world. Solicitous store staff jack up our sense of importance. Spending money bestows mastery.
     The Michigan research findings sharpen the case by showing why retail therapy works to ease sadness, but not anger. Anger arises from perceptions that certain other people, not situational forces, are blocking our fulfillment.
     Older research from Columbia University and Harvard University had also found greater effectiveness with sadness than with anger or fear. That research also discovered how consumers engaging in retail therapy want quick payoffs, even if this means forgoing substantially larger payoffs later. The impatient preference for the quicker, less valuable isn’t nearly as strong with other negative emotions.
     Sad consumers created arguments to justify to themselves a choice which was, from the perspective of rational economics, inferior. For example, preferring $37 today to waiting three months for $85.

• Present sad shoppers with alternatives. Then guide the shopper through the choice process so there’s prompt progress. Effective retail therapy includes both choices and quick payoffs. 
• Guide sad shoppers toward items which are easy to start using and in which the benefits of use are easily recognized. These might be alternatives a regular shopper with you is unaccustomed to considering. Researchers at National Central University and Hungkuang University in Taiwan find that sadness tends to lead to variety seeking. 
• With items you’re wanting to sell to sad shoppers, emphasize the feasibility of the purchase over the long-term advantages of the purchase. 
• Follow up with sad shoppers, such as inviting them to return to your store to say how the purchase worked out. Then use the follow-ups to assess if the sadness has eased, and when it has, to consider upgrading the purchase to what might better serve the longer-term interests of the customer. 

Click below for more: 
Satisfy Sad Shoppers with Prompt Rewards 
Give Shoppers Variety for Control 

Couch Retail Therapy for Chronic Conditions

Clean Up By Cleaning Up

After watching a film portraying incest, your shoppers will drink less chocolate milk than will your shoppers who watched a less morally offensive film. The choking off of chocolate milk consumption also happens if you ask shoppers to think about instances of fraud or cheating.
     The researchers at University of Pennsylvania, University of Colorado-Boulder, Duke University, and Fundação Getúlio Vargas looked at consumption of chocolate milk and water, but they say their conclusions apply to all sorts of eating and drinking. When people are morally disgusted, the disgust generalizes psychologically so that the people are less interested in buying foods and beverages.
     But since I don’t expect you’ll be showing flicks on incest, fraud, or cheating real often in your store, what does this mean for you?
     It means that it’s worthwhile to keep your store morally as well as physically clean.
     Other research finds that the principle holds even with less outrageous transgressions: Do it as gently as possible while still making your point, but whenever a shopper violates the norms of courteous store behavior in front of other shoppers, clearly call out the offense and offender. Researchers at University of British Columbia and University of Alberta find that unless you do the scolding yourself, the other shoppers may do it, leading to problems.
     Too often, people will cut in front of others who are waiting in a checkout line, ravage the tray of free samples so that none of the good ones are left for others, or unnecessarily create a huge mess at a merchandise display. The British Columbia/Alberta researchers saw that other shoppers who witness this happening are tempted to punish the offender. The observers do fear embarrassing themselves, but also have trouble looking the other way.
     This is to your disadvantage as a retailer because the mental turmoil inside the heads of these shoppers preoccupies their thinking, and preoccupied consumers generally buy less. Worse yet is if the miscreant bounces from one offensive behavior to another as shoppers watch.
     Also worse is if the store is physically disgusting. In a Morpace Omnibus consumer survey, over half the number of respondents said they’ve avoided a business because it looked dirty from the outside. Of customers who shopped at a store a single time and did not return, more than one-third said a reason was that when the customer entered, they found the premises to be dirty.

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Scold Misbehaving Shoppers Publicly 
Keep It Clean 
Set the Moral Tone Which Fits

Encourage Responsible Debt at Life Changes

Taking on debt can enhance not only creditworthiness when requesting a loan, but also creditworthiness as a person, according to researchers at New Zealand’s University of Otago. During life changes—such as leaving home to go out on one’s own—consumers take on debt as a way to establish an identity. Part of this occurs because debt lets the consumer buy material possessions, and what we own becomes both a cause and an effect of how we view ourselves as well as how others view us. But it’s also true that just taking on the debt, regardless of what it’s for, bestows self-esteem.
     “Getting into debt is the American way” was the prevailing opinion among a group of white, middle-class Americans selected and interviewed in depth by consumer researchers from Oregon State University and France’s École des Hautes Études Commerciales du Nord. By “the American way,” the respondents initially explained that buying on credit was extremely common. The one white, middle-class American who said she avoided credit went on to add that her un-American habits resulted in her being unable to get a mobile phone and experiencing endless troubles while traveling without a credit card.
     Yet there was more to it: Taking on debt is patriotic, some said. It’s necessary for Americans to do it in order to keep the economy rolling.
     On the other hand, we’d like our target consumers to be in good financial health. Threats to that health are more common during periods of life changes, such as starting college, college graduation, getting married or divorced, having a first child, changing careers, and locating in a new country or culture.
     After the consumers’ changes, let them live long and prosper. And spend their years and money shopping with us. Let them go with the flow.
     Or more precisely, the flow state. Psychologists talk of a “flow state” in which a person who makes a consumer decision then becomes more likely to make another similar decision and then another.
     Researchers at Northwestern University analyzed flow states in people trying to erase debt. The researchers found that a good predictor of the consumer’s success was the number of credit accounts closed toward the start of the debt elimination program. The dollar balance of the credit accounts closed at the start was not a good predictor of success. It was the momentum of closing accounts which made a difference.

Click below for more: 
Lend a Friendly Ear to Loan Debtors 
Pledge Allegiance to Patriotic Consumers 
Educate During Life Changes 
Flow Consumers Into Good Financial Habits 
Check for Unintended Consequences

Size Up the Change from Wish to Worry

When a consumer is attracted to an item, this attraction distorts the consumer’s perception of the item’s size. A classic finding in psychology is that the person who wishes to have the item will perceive the item to be larger than does the person with neutral feelings toward the item. Researchers at University of Chicago and Chinese University of Hong Kong use the example of a cake: The consumer who wants to eat a piece of cake sees the piece as larger.
     That research team also augmented the classic research finding: After the person has the cake, they’ll see it as smaller, no longer as larger, than does the neutral observer. Wish turns to worry as the consumer wonders if the piece of cake really will be sufficiently satisfying.
     This progression is a signal to the smart retailer that the customer is open to buying more cake immediately following the purchase.
     There’s an interaction between desire and ownership. In one study, thirsty consumers estimated a given quantity of beverage to be greater than did those who were not thirsty if told the water was for another person. However, if told the water was for their own consumption, thirsty consumers estimated the quantity to be less than did those not thirsty.
     Also involved in the interaction is desirability. A larger piece of cake and a larger quantity of beverage are desirable to the hungry and thirsty. But sometimes, less is more desirable. In another study, estimates of a rope’s thickness were affected by whether it was identified as to be used for rock climbing—thick is better—or jump roping—thick is worse. As another example, if the customer will need to carry the merchandise, smaller rather than larger numbers are better. Before merchandise acquisition, the weight will be underestimated, and after acquisition, it will be overestimated.
     There are certainly other influences on estimates. Showing a product on the right-hand side increases average estimates of package size, warranty length, and other quantitative attributes. Why? Researchers at Chinese University of Hong Kong and Shanghai Jiao Tong University found two related explanations:

• Consumers familiar with the labeling on tape measures and graphs assume that numbers appearing to the right are of a higher magnitude than those appearing to the left. 
• Those in cultures which read from left to right mentally process items to the right later than the left, so will associate a higher number with it. 

Click below for more: 
Assume Higher Anchors for Right-Side Items 
Enlarge Influence with Contagion 
Placate Lighter Diners with Smaller Plates

Weekly I Turned

As the calendar turns to 2014, I’m turning my RIMtailing posting frequency from daily to weekly. My next posting will appear Monday, January 6, 2014 at 9 AM California time. Subsequent postings will appear each Monday at that hour.
     There are already more than 1,700 posts on the blog covering research-based profitability tactics for a broad range of retailing topics. How to get to the right ones for your needs? I recommend the “Search the Entire RIMtailing Blog” feature. However, do be aware that the search algorithm is less sophisticated than in major engines like Google and Yahoo. If you don’t locate what you want with a certain phrasing, resubmit using related wording.
     When you locate posts that hit your interests, try the “Click below for more” list I include with most of my postings. To encourage busy retailers like you to read what I write, I keep each posting to fewer than 400 words. But I find there is always more I could say. The “Click below” lets me do that. Just as important, the “Click below” ties together the brief posts into a more coherent plan of action for you to implement.
     My original objective in creating the RIMtailing blog was to provide my training and consultation clients with continuing updates and reminders. After my book Retailer’s Edge was published, I saw an expanded audience for the blog from the readers. And considering the inquiries I receive, there are merchants, suppliers, academics, journalists, consultants, and consumers who have found value in the postings even among those who aren’t my clients or my book readers.
     As you might detect, I enjoy transforming high-quality consumer behavior research findings into workable tactics for retailer profitability.
     My title for today’s posting was inspired by the name of a classic comedy routine, “Slowly I Turned.” The shtick includes the phrases, “step by step…inch by inch.” Please consider those words as guidance for how you put into practice the tactics I propose to you. Conduct a needs assessment to identify strengths and weaknesses of your current business operations, plus the opportunities and the threats from outside. Then, to keep yourself from wasting resources by riding off in all directions at once, carefully select a set of tactics to begin with and to add onto later. And to facilitate your success, join with others to move as a community of merchants.
     …More each week.

Click below for more: 
Take a Swat at SWOT 
Focus for the Holidays 
Perpetuate Beautiful Days in Your Neighborhood

Transport Resolutions with Tokens

As we approach the annual opportunity for New Year’s resolutions, I remind you of the resoluteness of consumer habits. The best predictor of future behavior is still past behavior.
     Yet, it can take only a small token reward to nudge people toward starting to do what they know is better. One example, from the realm of health care in a third world country, is described by researchers at Massachusetts Institute of Technology:
     Although parents in India generally recognize the importance of having their children immunized against diseases, they often neglect to do it. Recognizing this, the researchers divided a set of rural Indian villages into three groups:

• Immunization was available, but no clinics were announced 
• Clinics were scheduled, and the schedule was broadly publicized 
• At the scheduled and publicized clinics, each parent who brought in a child for vaccination received a small quantity of lentils 

     The rate of immunization for young children turned out to average 6% for villages in the first group, 17% for those in the second group, and 38% for those in the third group. A small reward more than doubled the consumption rate.
     Other research indicates that it is, in fact, the modest size of the token which accounts for its effectiveness. If the incentive is large, the consumer comes to view it as a payment for compliance. The result is a reversion to the old habits as soon as the incentive is discontinued. Worse yet, the bigger the reward, the greater the possibility the consumer will perceive it as a bribe and consequently dig in her heels against change as a matter of honor.
     Another important characteristic of effective tokens is that they can be used promptly. The bag of lentils qualified. Similarly, surprise gifts which give immediate pleasure have been effective in convincing children in economically deprived circumstances to prefer healthy foods. On-site experiences—such as the opportunity to meet the chef at a restaurant—can be effective tokens, since experiences are consumed more promptly than products.
     The small incentive nudges the shopper to take the risk of purchasing. Researchers at University of Chicago and Columbia University find that with financial investment decisions where the client gets stuck, it works to offer a small gift with each alternative because this moves the decision toward the riskier choice, breaking the tie. The researchers call this the “mere token effect.”

Click below for more: 
Give a Free Token to Shift the Odds 
Dissolve Decision Paralysis 
React When Faced with Reactance 
Nourish Good Shopper Rituals