Social Science as Applied to Commerce

ConversationAgent.com & Vellandi.wordpress.com 1 Social Science as Applied to CommerceAsk(?)Away is a candid conversation between two people published on ablog. This transcript includes comments from the readers and space for yournotes. Our fourth guest in this format at Conversation Agent is Mario Vellandiof Melodies in Marketing.Valeria Maltoni: I used to interact with my TV, except for nobody knew about itbecause all it meant was me giving my opinion to a screen with no way to send thecomment. Maybe some of you are smiling here, have you done the same? Have youresponded to a talking head on TV during an interview muttering your two cents?They couldn’t hear you, could they? That is changing. One need only think about themany ways we can now provide feedback in real time -– online and off line. How isour new focus on customization and personalization shaping the retail industry, forexample?Credits: Logo design courtesy of Ryan Mesheau via Mark Goren. PDF design and light edits by Valeria Maltoni.

ConversationAgent.com & Vellandi.wordpress.comRecently, I asked Mario Vellandi who blogsat Melodies in Marketing a simple question independent contractors. 2-- what are you passionate about? The Valeria Maltoni: A while back we met with aconversation that ensued between us was group of analysts of cultural behavior -- theinspiring. We talked about personalization, Center for Cultural Studies and Analysis. We hadbuying behavior, and choices -- and the role the most fascinating conversation about themarketing plays in helping provide them. “Seven Shoulds or Seven Things all Americans Believe in” and I recall checking out their ageMario Vellandi: Well, I am a very curious chart that delineates behavior when in group.person about many of life’s pleasures the They do a lot of work for the entertainmenthumanities has to offer, but it is social science industry. They study behavior to help thoseapplied to commerce where I am most companies design great experiences.fascinated. What I mean by that is, how dopeople naturally behave in particular contexts In your work with consumer good companies,and how are they inﬂuenced? Ultimately, we’re how much emphasis do they put into researchhumans not consumers. We don’t like to just and behavioral-based analysis? How arefeed the seemingly insatiable self. I think most the results utilized for product and serviceof us also like to interact, play, enjoy, share, development?and importantly: relax and be content. Mario Vellandi: Well, you kind of stumpedWhere does this leave me? Marketing and me because that was an interesting website andExperience Design is probably the answer. I had to think about how to respond.For what industry? Mostly consumer I’ve worked with a few consumer goodsproduct goods, although I do like to keep companies, but they were relatively smallan open eye for interesting small projects (<$60 million). The categories were food,involving nonproﬁts or other consultants and beauty care, and home decor. Behavioral♪♫

ConversationAgent.com & Vellandi.wordpress.comresearch at these firms was quite limited tohypotheses and personal preferences among 3 may not be that important. Instead, giving the retail buyer (aka Category Manager) aemployees. However, we did have excellent product they’ll love is far more important.designers who knew their materials well That option is oftentimes not availableand how to concept new products quickly. though. It takes excellent sourcing abilities,Management of course wanted to make flexible manufacturing options, and an internalproducts that actual shoppers would buy. company culture that is devoted to serving theSo we would all go competitive shopping customers’ wants. That is one very difficultand analyze what we saw on the shelves at cookie with a long bake-time.various retail establishments, upscale anddownscale, and took note of what products But I don’t want to underestimate theseemed to have a higher velocity based on the importance of testing. A product may lookcomparative number of units on shelf, among good, but may perform poorly with extendedmany other factors. use. I liked one company’s innovative candles, but noticed when I tried out a square-shapedSecondly, and perhaps most importantly, we candle at home; the burn diameter was largemade it a priority to give the retail buyer the enough to start leak wax out of the sides, thusoption to customize the product to their liking making a mess. I told a couple people about(naturally limiting the amount of flexibility it, but they said they do test all their products.to their relative purchasing power). For the I didn’t buy that excuse because the wick sizelargest retailers, it wouldn’t be uncommon for on the final product looked exactly the same asus to turn around a new concept with pricing, the concept candle.photo, and a sample shipped within 24-48hours. ▼Depending on the product category, CK highlighted the importance of lookingsometimes actual consumer behavioral analysis to human behavior/ influences/instinct in♪♫

ConversationAgent.com & Vellandi.wordpress.commarketing. What I find additionally interesting is how participants may be more candid and open 4Observation is important, yet if a product if the tools are designed to easily fit intodoes not deliver on its promise, if it looks participants’ lifestyles and schedules. Butgood, but performs poorly, you need to ultimately, I think they’re just tools and aren’t aknow that as well. So what about combining panacea for everything. Research projects stillobservation with testing? In other words, must be well defined and related to a particularletting users tell you about their experience. strategy, planned and executed. Data has to be collected, analyzed, and converted into► (continued) actionable intelligence. We need apt humans for all that right-brain thinking.Valeria Maltoni: Did you do any onlinetesting? For example, I met the founder of Product/Service design (content, packaging,KDA Research and learned that they do a lot price) is just one piece of the larger behavioralof qualitative research using new media. Do analysis pie though. There’s environmentalyou see technologies that can make it cheaper studies for online and offline purchasingto put in the hands of consumers not real environments. After recently reading Whybut virtual products as helpful for behavioral we Buy by Paco Underhill, I got an immenseanalysis? appreciation for how merchandising and store design affect shoppers’ behavior.Mario Vellandi: I think software tools canbe extremely helpful in managing the data [from the comment section Mario added](collection, sharing, disseminating) and At my previous employers, we had some keythe project (planning, task assignments, individuals who performed research intomilestones) with multiple parties: end-users, fads and trends in the marketplace, thensales channel providers, and research team organized this info into lifestyle profiles.members. This environmental scanning was a constant♪♫

ConversationAgent.com & Vellandi.wordpress.comprocess. But this was just one element of alarger organization-wide product ideation 5 Anthropologie does that in their stores. I wrote about it not long ago. What other stores doprocess that included our shopping trips. that well and why?Fads and trends have life cycles of their own Mario Vellandi: Although I’m not a lady, I’vethat when understood, will qualify the degree heard marvelous things about the service atof opportunity for each retail channel. [Btw, Nordstrom dept. store. I think the commonCK has a great white paper about fads/trends on thread between this chain, Anthropologieher website.] Training your salespeople in & Urban Outfitters, and other successfulthis info improves their communication with establishments is that they put their focusbuyers and relationships they build. on the staff first, not the customer. After all, employees represent the company to theAllow me to stress that very last sentence. customer every day. If they feel good aboutRelationships matter. If you want to be their employer and the way they’re treated, itremembered next season for at least a meeting will reflect in their performance and service toor presentation, you have to build customer the customer. In saying this, I almost sense aintimacy into your organization’s culture and flashback to Made to Stick. The companies arethe mindset of your salespeople. This requires taking care of their troops and giving themlooking out for the buyer’s interests in regards the commander’s intent, but not the explicitto product fit, assortment, price points, tactics. There are general company guidelinesmargin, and # of units on shelf. and of course performance metrics to be met as a matter of maintaining service levels.Valeria Maltoni: As much as we’d like people But the trust in execution is placed in theto tell us, I think there is also the consideration employees.that we often say one thing and do another.Observing in the context of the purchase Did you know that Walgreens has feweris a great way to do a reality check. I think stores than CVS (nation’s largest drugstore),♪♫

ConversationAgent.com & Vellandi.wordpress.combut beats them in sales? Although there arediffering reasons for their overall success, feels awesome. 6as outlined in Good to Great, I’ll explain one. Let’s hear it from you – what are yourWalgreens caught on quickly that many favorite stores? Why?shoppers came in wanting beverages andsnacks (which give good margin), so they ▼increased their exposure to these categories Carolyn Ann: My favorite store is the Bordersand transformed the store into a mix of a in Wilmington, Delaware. Lots of choice,convenience, general, and drugstore. In the good coffee served near the magazines andmind of shoppers, they were no longer just the bathrooms! (Barnes & Noble put theanother drugstore that sells health, beauty, bathrooms elsewhere, usually forcing you walkpersonal care and pharmaceuticals along through the store. An usually trivial point, butwith stationary, photo services and a couple it can be important!)other product categories. And that uniquepositioning was powerful magic for Walgreens My least favorite is also a Borders: thebecause now shoppers wouldn’t necessarily one in central Philadelphia. It’s got a greatthink first of 7-11 or the supermarket for selection, but you have to go up 3 floors tocertain categories, they’d remember Walgreens. get to it, music is the first thing you see (it’s a bookstore!), and the books aren’t arrangedA last retailer I’ll mention for a unique feature very well; it’s not laid out as logically as it couldis Best Buy. Their staff may be courteous, be. Plus, the aisles are a little crowded. And thethe prices are nothing special, but the amount cafe: what a disaster! Instead of it being in aof space between aisles and departments is reasonable place, you have to go down a floorexcitingly refreshing. You can feel free to - not so bad, except I’ve yet to locate whereroam around and look, then approach with the baskets are, so I have an armful of bookscuriosity. Even if there are many shoppers in all the time - and the bathrooms are back up athe store, you don’t really notice them. It just♪♫

ConversationAgent.com & Vellandi.wordpress.comfloor. I don’t know where the magazines are. 7 After browsing the books, it’s nice to be able to go to the Starbucks kiosk to sip some fresh-I do buy a lot of books, and the layout of the brewed java. The chain also offers a rewardsstore has to be conducive to that. Barnes & program with discounts on books bought bothNoble on Union Sq in Manhattan has some of online as well as through the stores.the same issues as the Borders in Phillie, butit’s nowhere nearly as awkward to “use”. The experience is always a good one, and I even drop by just to “chill” a little to take aNordstrom’s are good! Even I’ve bought shoes break from a hectic day.there. :-) Layout and design, courteous service, qualityKaren Hegmann: I too am a believer as to product and an environment designed forthe implications of social science on the world tranquility all combine to create a positiveof commerce. The implications go far beyond experience for the customer.brick and mortar businesses and touch theonline world as well. A well-designed website Trisha Miller: I love the model ofthat addresses our needs will provide a good empowering employees in order to create aexperience and will entice viewers to come better customer experience.back and take a second look. I don’t get out to the offline stores much,In Canada, my favourite store would have to but do a lot of online shopping. Head andbe the Chapters/Indigo chain of bookstores. shoulders above the rest is Amazon, whomThe stores are well laid out, and any deals are I shop frequently. Not only do they sellpromoted as you walk in the door. Staff is gazillions of items at reasonable prices, theycourteous and friendly, and if you can’t find are clear when they don’t have items in stock,the book you need, they will help you find provide honest user reviews, and offer otheralternatives. items I might like that I may not have thought♪♫

ConversationAgent.com & Vellandi.wordpress.comabout before seeing their offer (yes I often buythe additional item(s) on impulse). amount of people coming through (great 8 for quick breaks and people-watching). The square footage isn’t small nor as daunting as aThey’ve worked hard to make the buying shopping mall. Lastly the hours are excellent.process easy, and to develop a relationshipwith every purchaser with features like Wish ► In addition to the materials mentionedLists and Occasion Reminders. in our conversation, Mario recommends the following blogs and books on retail andThis approach may not be feasible for a lot shopping experience:of ofﬂine stores, but every online retailer canlearn a trick or two from Amazon. Flooring the Consumer by C.B. Whittemore Retail Design DivaValeria Maltoni: I ﬁnd it fascinating thatso far we’re talking about bookstores. Are The Curious Shopper by Sara Cantorbookstores the new libraries? It would seemthat way. Retailwire.com as the premier source for consumer and retail studies, in addition to news on competitive maneuvering by retailersSo much can be communicated with a wise and regulatory trends & actions.use of design. It is easier to be nice whenyou don’t feel crowded by close hallways and Shopportunity!: How to Be a Retailspaces, for example. Revolutionary - by Kate Newlin Shopping: Why We Love It and How RetailersMario Vellandi: I get a kick out of the Can Create the Ultimate Customer Experiencereferences to bookstores as well. Interestingly - by Pamela N. Danzigerenough, Borders and B&N have providedmany Americans a new kind of experience Winning at New Products: Accelerating thethat combines shopping, browsing, and just Process from Idea to Launch - by Robert G.hanging out. The environment gets a good Cooper♪♫

Social Science as Applied to Commerce

by Valeria Maltoni on Aug 20, 2011

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Social Science as Applied to Commerce Document Transcript