Author Archives: Meagan Lanchbery
This week, I noticed something scary happening (and yes, Halloween is already over). Retail stores have exploded with wrapping paper, bows and garlands. Radio ads proclaim “Outdoor light sale, get a jump on your decorating!” And two days ago, one of my social media acquaintances proudly boasted that their Christmas presents were bought, wrapped and already placed underneath the decorated Christmas tree.
It was November 4th.
For those that are bothered by this, it’s easy enough to ignore the premature festivity. But there is one aspect that is harder to tune out, and you can bet it will be starting soon, if it hasn’t already.
The Christmas music.
Some love it. Some hate it. Marketing wisdom tells us that it puts shoppers in the “right frame of mind”, and encourages them to buy more. It’s hard to argue with this business strategy and its bottom-line results (see last year’s post Deck the Malls for an overview).
For this reason, I’ve been waiting for someone to take Christmas music to the next level. Now that the holiday season officially runs from November to January, the next logical step is to write a new carol that reflects our modern reality. The “61 days of Christmas” seems like an appropriate title. By my calculations, it would take several days of continuous play to reach the end, and it could be placed on an endless loop in retail stores. And think of the possibilities for product advertising! “On the 49th day of Christmas my true love gave to me, a Windows 8 Surface Tablet!” It could be changed up every year to reflect the hottest products.
Then, to my relief, I came across a news article that dissuaded my fears of a 24/7-carol-o-thon. This week, Shoppers Drug Mart found itself in hot water after pumping out the Christmas tunes on November 1st. Customers complained that the pharmacy giant had overstepped the unwritten rule of “No Christmas before Remembrance Day” and the soundtrack was yanked “until further notice”. I skimmed through the 100+ comments on the article and the consensus was overwhelming: “No Christmas before December 1st please”.
Will retailers hear the message? Or will it be lost in the chorus of “fa la la la la-s” and register “cha-chings”?
Do you think the Christmas hype starts too early? Or should retailers use every sales tool at their disposal?
What’s your favourite part about the movie theatre experience? Some, no doubt, would argue it’s the popcorn. It’s not difficult to see why as it’s certainly hard to ignore. From the moment you step out of your car you can already smell it, its buttery popcorn-y goodness encircling your nostrils. Suddenly, even the fullest of stomachs can make room.
But did you know that what you really smell is payday for the theatre? The theatre industry is dependent on concession sales for its profits and uses every method at its disposal to persuade you to buy more food. To boot, that popcorn smell is really diacetyl, the artificial butter chemical favoured for its anti-spoilage properties, but perhaps more valuable for its potent smell. This chemically enhanced popcorn smells even better than the real thing. The result? People open their wallets and their mouths.
Sure, good smelling food leading to more sales is not a giant leap. But did you know even non-food retailers are using scents to sell everyday products? This marketing technique is known as environmental fragrancing; businesses use smells to elicit emotions that encourage shoppers to spend more dough.
In the cracked.com article “6 ways your sense of smell is secretly controlling your mind”, the science behind the strategy is explained. Smells are interpreted by the limbic system, one of the oldest portions of the brain. This system subconsciously associates smells with emotions, without the interference of higher brain functions like logic and reasoning. These associations are both powerful, and long-lasting. It’s why we experience sudden flashbacks when encountering a stranger wearing the same brand of perfume or cologne as an ex-lover.
This strategy not only places shoppers in “the right frame of mind”, it actually makes them spend more too. The cracked.com article recounts one study that showed “sales of men’s and women’s clothing nearly doubled when ‘masculine’ and ‘feminine’ scents were used nearby, an effect that disappeared when the smells were reversed”. It’s the same reason that car manufacturers infuse cars with “new car smell”. It’s why grocery stores place high-priced items around fresh bread and coffee, and flowers are placed right at the entrance. And it’s why home sellers will bake fresh bread and cookies before their open house. Scents make us impulsive, which invariably leads to more sales.
The next time you’re out shopping, take note of what you smell. It could really be the scent of cold hard cash.
Do you use scent-based marketing strategies? As a consumer, have you noticed this strategy while shopping?
I’m a very methodical (and slow) shopper. This is especially true for big-ticket or important items. Before I make such a purchase, I spend hours researching various products. When I have made my shortlist of suitable options, I read every available online review to check for potential shortcomings. Finally, I head in-store to evaluate the possibilities in person. Finally, I make my purchase and head home…
…where I re-research the product again.
It sounds a little nutty…but chances are you’ve probably done this too.
According to a recent article by the Marketing Science Institute, my behaviour is a classic example of the well-documented “post-purchase bias”. The bias was first discovered by Ehrlich et al. in a 1957 study. They found that new car buyers read more advertisements for the car they had just purchased than for the cars that they had considered, but not purchased. This effect has been reproduced many times and is considered to be one of the most robust findings in consumer behaviour.
Why do we do this? By re-affirming the reasons for our initial purchase, we defend the wisdom of our acquisition and are able to allay the dreaded “buyer’s remorse”.
More recently, researchers have discovered that we also distort product information to reinforce our decision after a sale. When presented with such information, we ignore the bad and inflate the good. More importantly, because this interpretation is self-driven, we are more likely to believe in these positive evaluations.
This has big implications for business. Traditionally, we think of marketing as something that occurs before the sale. However, this study suggests that marketing is just as important after the sale has already occurred.
The MSI article outlines four implications for business:
1) Managers should always find ways to follow through after a recent purchase. Good customer service practices aside – when customers are given more information about a product, they positively interpret this information to create a stronger brand preference.
2) This follow-up should take place as soon as possible after the initial purchase, while the customer still feels strongly about the product.
3) After the initial purchase, we are likely to hear from some customers again – some products may be returned, others may require repair, or the customer may need additional instructions. Every encounter offers businesses the chance to strengthen the customer’s product preference.
4) The best kind of marketing is free-marketing – specifically when customers talk to friends about their experiences. The more post-purchase follow-up, the more loyal the customer, and the more likely they are to offer positive feedback regarding the product. Most importantly, because they are passionate about the product, this feedback is inherently more believable.
Remember: Your work as a retailer doesn’t end when the customer reaches the cash register – it has only just begun.
Do you research products you’ve already purchased? How does your business market itself to existing customers?
“If we wanted to figure out if a customer is pregnant, even if she didn’t want us to know, can you do that?”
This was the question posted to Target statistician Andrew Pole, as recounted in the New York Times article “How companies learn your secrets”. New parents have always been a boon for “one-stop” retailers like Target, as this life-change offers a small opportunity to alter engrained buying habits. “Coming in for diapers? Might as well pick up some supper too.” The competition for new parents’ attention is so fierce that Target wanted to get a jump on their competition and begin their marketing efforts before baby was even born.
And Pole delivered. He analyzed women’s purchase history and identified 25 products (pre-natal vitamins, maternity wear, etc.) that when considered together, generated a “pregnancy prediction score”. This allowed him to estimate who was a mommy-to-be, and approximately when she was due. Target then created custom “mommy-themed” flyers and coupons, disguised as regular flyers, and sent them specifically to these women, who were unaware of their data-gleaned origins.
And Target is not the only retailer doing this. As the article explains, “Almost every major retailer, from grocery chains to investment banks to the U.S. Postal Service, has a “predictive analytics” department devoted to understanding not just consumers’ shopping habits but also their personal habits, so as to more efficiently market to them.”
Does this story give you pause? Or does the prospect of a tailored-deal excite you? Either way, just wait. Those predictive analytics departments are about to get a whole lot more in-your-face thanks to mobile wallets.
The internet has been awash with talk of mobile wallets. (For the uninitiated, Jen’s post ‘The Next Step’ provides a great introduction). People are quick to talk about their convenience, the “coolness” of the technology, their lighter pockets. But less often do they mention the real reason for their existence; marketing.
A few weeks ago, I read an article that explained how RBC is poised to be the first Canadian bank to offer mobile wallets, possibly as a soon as October. Interestingly, this article also spoke at great length of the marketing advantages of the technology.
Retailers will now be able to collect purchase-data more easily than ever before, tailoring promotions to specific consumers. Combine this with your smartphone’s location-aware technology and retailers can now text you their latest flyer when you are near their store. Or alert you of their lunch special.
There are obvious advantages for both merchants and consumers alike, and it might be nice to walk into your favourite store and be provided with a list of on-sale items, or a coupon. We won’t know how this latest evolution of analytics will play out, but one thing’s for sure – we’ll all be watching. Oh, and so will they.
Do you think predictive analytics improve the retailer/customer dynamic? Or, are they an invasion of privacy?
Who doesn’t like a sale? I know I do! But did you know that not all sales are created equal (even when they are)? When it comes to sales, it turns out it’s more about perception than reality.
Last week, the Economist featured an interesting article which recounted the results of a University of Minnesota study on discounting. And because game-show-esque examples are more fun than regurgitating conclusions from a journal, it’s time to play:
Hmm. This is a tough one. Did you pick A? Most of the study participants did.
Unfortunately you have been misled, dear reader. The answer is…..
Both are equivalent deals.
This has interesting implications for retailers. If you are going to put a product on sale, science has clearly demonstrated that customers strongly prefer getting more of something for free, rather than saving money on a single item. In the study, the researchers sold 73% more of their product using the “more free” strategy.
Don’t fret if you got it wrong because you have a chance to redeem yourself in round 2. It’s once again time to play:
So what do you think this time? Are these deals the same? Most of the study’s participants thought so. (They both reference 33% after all…)
Nope. In this case, B is by far the better deal.
In the first example, we saw that customers prefer getting more of something rather than saving money on a single item. In this case, we see the same behaviour again, even when they would have saved a lot more money by choosing B.
As a retailer, you would actually stand to make more profit by offering a bit more of something for free, rather than offering a steep discount. Customers generally view the deals the same, so you might as well offer the one that is more profitable for you.
Okay, time for round three. You’ve got one last shot to redeem yourself. It’s time to play:
Now this is something I see all the time when I’m shopping. A previously discounted item has an additional discount applied to it.
What’s the better deal? The study’s participants thought A was…
And if you did too…you’d be 0/3.
Yes, they are equivalent deals!
As a retailer, this is good to know. Multiple discounts applied to the same product seem like better value, even though the cost to you is the same as one larger discount.
So why is this the case? Are we all that bad at math?
Basically…yes. And when reason goes out the window, it seems we rely on other less-reliable clues (i.e. more is always better).
Knowing these tricks could make the difference between a successful sale, and a not-so-successful one. It also offers a sneaky opportunity to compete with other retailers. Is your competitor discounting their widgets this weekend? Offer the same deal, but instead offer an equivalent amount of free bonus products and you’ll be stealing their customers in no time.
So remember, when you’re planning a sale, customers always want to feel like they got “more” for their money, even if they really got less. But don’t worry; they’ll thank you for it.
Have you used any of these pricing strategies? What has worked in your store?
In the next few years, augmented reality (AR) is poised to take over retail. For the uninitiated, AR uses computer-generated sensory input to alter your perception of the world in real-time. Already we are seeing its potential being harnessed in all areas of retail, including in-store, online, and through advertising.
In-store Customer Experience
Retailers have introduced AR in-store in an attempt to improve the customer experience.
Starbucks Holiday Cups
In 2011, Starbucks introduced their entertainment-focused “Holiday Cups” campaign. After downloading an app, customers could use their smart phone to make their coffee cups come alive.
AR’s in-store usefulness goes beyond entertainment. Intel has developed an AR digital display, which has interesting implications for retailers. Installed at the store entrance, the 7ft transparent display shows customers a digital floorplan and recommends products after assessing their gender. Product location is superimposed on the screen, and products can be placed on hold and brought to the cash register for payment. The aim of the technology is to help customers shop more quickly and easily.
Traditionally, the problem with online shopping has been that you can’t truly get a sense of a product from a 2 dimensional image. With AR, customers are now able to hold products in their hand, and try them on virtually.
Tesco online shopping
Tesco has already made AR a large part of their online-shopping experience. Customers select a product online, and then print a copy of the AR marker. Holding the marker to their webcam, it is transformed into a 3d model of the product. As the customer turns the marker, the 3d image rotates on screen as well. In the video below, a customer views a TV, and is able to see the ports on the back of the unit as she turns the AR marker.
Holition’s AR is as luxurious as the products it promotes. Designed for high-end products, their AR experience allows customers to virtually “try on” jewelry and watches. Holition is also working on expanding their AR so that customers can smell, hear, and feel products.
Bodymetrics Virtual dressing room
Unsurprisingly, 50% of garments bought online are returned. But what if you knew how those jeans would fit before you place your order? Bodymetrics’ Virtual dressing room uses your in-home motion capture device (such as the X-Box Kinect) to assess your body shape and virtually project clothes onto your digital frame. If you like what you see, your purchase can be completed right through your console.
AR is also finding its place in advertising.
GoldRun has already launched several successful AR advertising campaigns. One of their most interesting campaigns was when they created a virtual shoe store for Airwalk. AR markers were secretly hidden in public places in Washington, New York, and Los Angeles. Customers used their smartphones to locate the markers, and were able to view limited edition versions of Airwalk classic shoes. They could then place an order from their phone for the shoe that they found.
Every weekday, I compile the best retail and technology news from Twitter into our “we get retail” Daily paper.li newspaper. Through my monitoring, I’ve noticed several technology trends that are poised to shape the retail industry like never before. I have compiled a list of my top five emerging retail technologies:
Tablet PCs are increasingly being used in retail environments to speed up sales. Couple this with mobile payments, and several interesting possibilities arise. Sales staff can help you find a product and ring it in, right on the sales floor, with no need to line up at the cash register. Product you need not in stock? Staff can check inventory levels right then and there, and tell you when the next shipment will arrive. I can see this technology becoming an invaluable customer service tool.
Most of us are already familiar with QR codes: “scan here to go to our website” or “scan here for our coupon of the day”. While QR codes are excellent promotional tools, businesses are also recognizing their benefits after the sale. For example, whirlpool includes QR codes on their dryers that link to animated instructions on the proper installation of vent material. QR codes can be used to provide usage instructions, replacement part numbers, contact information, etc. This customer friendly solution provides yet another way of promoting product entanglement, as well as maintaining brand integrity.
Apple’s passbook is an intriguing offering; it allows customers to electronically collect, store and organize store cards, gift cards, and coupons. Passbook uses the iPhone’s geo-location capability to identify when you’re in a particular store, and load the appropriate card. For example, it will load your Movie gift card when you enter the theatre, presenting it on-screen to be scanned. Aside from its obvious convenience, this technology makes it easy to carry your store loyalty cards (how many times have you signed up for something, but left the card at home?) It’s an interesting product for consumers and retailers alike.
Radio Frequency Identification is another new trend hitting the retail world, and widespread adoption is expected in the next 3-5 years. Inventory is tagged, and can be tracked at any point from warehouse to the storefront. Because locations are tracked in real time, RFID offers retailers unparalleled supply chain accuracy. The completeness of incoming shipments can be quickly assessed, rather than relying on random inspections. Other benefits include prevention of vendor fraud, administrative errors, and employee theft.
Nokia City Lens
Nokia’s City Lens (currently in beta) uses your smartphone camera and augmented reality technology to recognize your location and superimpose relevant information right on your screen. Wave your phone, and City Lens will identify nearby landmarks, restaurants, and shops near you. Imagine – customers wave their phone at your store front, and you are able to see your hours of operation, special sales, reviews, etc. It will provide unparalleled visibility to potential customers. When this takes hold, this could be a boon to retailers, or a bane for those unprepared.
Will these technologies impact the retail industry? What other technologies will be of use to consumers and retailers alike?
Picture this. You’re in your favourite restaurant with a group of friends, eagerly awaiting your meal. Everyone else at your table receives their meal, except for you. It eventually arrives 15 minutes later, but it’s loaded with the ingredient you specifically asked to be excluded. When you finally manage to flag down your server, it goes back to the kitchen, but its replacement doesn’t arrive for another 15 minutes. Then to top it off, your drink is spilled in your lap.
At this point, what would you do?
Did texting the manager cross your mind?
A new service called Talk to the Manager allows restaurant-goers to anonymously complain to the restaurant owner via text. “Every cellphone is a comment card”, their website boasts. The rationale behind the service is that management has direct (and confidential) access to complaints, rather than scouring nasty public reviews on sites like Yelp or Urbanspoon.
When I first heard about this service, my initial reaction was that it seemed a little ridiculous. What happened to speaking to people directly? We are increasingly placing more and more layers of technology between customers and businesses in the name of efficiency and improvement.
That being said, a few years ago, could you imagine “tweeting” your complaints to a company? There is no question that Twitter has become the new frontline of customer service. In fact, I would not be surprised if social media eclipses the traditional call centre as the preferred method of contact.
Are services like “Talk to the Manager” just the latest evolution of customer service? And, would more people offer feedback in an anonymous fashion? Perhaps managers would finally hear from the non-confrontational customers who might otherwise have kept quiet. Of course this type of service would be more suitable to some industries than others. (How’s my driving? Text 555-4435)
As a retailer, would you appreciate a service like this?
Do receive feedback from customers? Are text-feedback systems just the latest evolution of customer service?
Are you planning on fitting in a few extra hours of work tonight? Chances are the answer is yes. According to a recent study by Forbes Insights, only 2% of employees, from managers to CEOs, said they never work weekends or nights. Of the 98% that do after-hours work, nearly half of them do so on a regular basis.
Newer technologies, such as smart phones, are frequently implicated. These “remote-office” tools allow work to be conducted at any time, anywhere (including, while on “vacation”). Of course, these are just tools – it’s the individual that decides how they’re used.
There is no question that our workplaces have changed, but the reasons are not straightforward. It goes beyond “unrealistic employer expectations”. Employees themselves are increasingly seeking flexible jobs with the ability to telecommute. And in turn, employers are responding by making it easier to work at a moment’s notice.
I once had the pleasure of meeting a Google employee. Google is one of the most sought after companies to work for, and is often touted as the “ultimate” workplace. The employee proudly regaled me with stories about Google headquarters, commonly known as Googleplex. It did sound like a great place to work, but I also saw something more ingenious. Google has blurred the lines between work and home. Employees can work while commuting to Googleplex on the wifi-enabled Google train. Services, such as laundry, are provided, reducing the need to go home and do “chores”. Recreational activities are provided on-site. And catered gourmet meals are provided – but are carefully timed. An early breakfast and a late supper entice workers to arrive early and stay late if they wish to partake. Google had truly made it possible to work whenever, wherever. And while I saw this as an open door to overwork, this employee only saw perks.
Is there a problem with working more than the standard 40 hour week? Surely working more hours means you get more done?
Aye, there’s the rub.
Several studies have consistently shown that workers who clock in over 40 hours per week are not more productive. Studies of industrial workplaces, for example, have shown that workers produce the same number of widgets in an 8 hour day as a 10 hour day. With the exception of occasional overtime (and I do mean occasional), working longer does not equate to increased productivity.
But there are more important implications than just productivity. We sacrifice our leisure time for work time, and as a result have more stress and less time for family and friends. So if we’re not accomplishing more, why do people do it? In a Wall Street Journal article, Laura Vanderkam succinctly points out that there is a strong correlation between how busy we are and how important we feel; ironically, overwork is way of showing we are dedicated to our jobs and families.
Seems counter-productive, no?
With information from: