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Ml atmospherics and_the_modern_shopper


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Ml atmospherics and_the_modern_shopper

  1. 1. RETAIL ATMOSPHERICSA Practical Guide to Serving Your CustomersRight in the 21st Century Dr David Lewis-HodgsonA Chartered neuropsychologist, Sony Award-winning broadcaster, and Chairman ofMindlab International ® David offers keynote conference presentations & runs in-house seminars on his company’s unique consumer research projects. David is theauthor of more than twenty books on psychology & selling, including The Soul of theNew Consumer: What We Buy and Why in the New Economy.
  2. 2. INTRODUCTIONRising worldwide affluence combined with radical new marketing andretailing technologies have changed forever the wants and desires ofcustomers. The modern consumer has high expectations and a low tolerancefor mistakes by suppliers.While a majority is, despite the recession, still cash rich and time poor there isa rapidly growing proportion of “grey consumers” who have both plenty oftime and a high level of disposable income.Many of today’s consumers want it now or they do not want it at all. Span ofboth attention and desire by customers are shorter than at any time in thehistory of selling. As more and more consumer needs are easily met,increasing amounts of disposable income are becoming available for“wants”, luxury articles and services with a strong feel good factor. Themodern consumer is highly aspirational. Merely maintaining current socialstatus is no longer sufficient for them. They are more interested in emulatingthe materialistic lifestyles portrayed in the media than simply ‘keeping up’with their next-door neighbours.ATTRACTING THE MODERN CONSUMERThe interest of the modern consumer is aroused by change. When designinga window display, it is important to take into account the way a consumer isgoing to live with the product and allow passing shoppers to view theproduct from that distance.When graphic information forms part of the shop front message, make surethat it can be read as shoppers walk past; dont expect them to stop to getthe message because they are most unlikely to do so.The past fifty years has produced a marked change in how people makesense of printed messages. Americans and Europeans no longer read letterby letter, but have graduated to reading letter clump by letter clump - one 2
  3. 3. reason why typefaces that allow for closer positioning of letters are usedmuch more often than in the past.Retailers must also understand when and how shoppers will first see theirdisplay. Generally the most important view of a display will be at an anglerather than straight on.Some retailers believe the front of the display is of key importance, but theimpulse to shop begins 20 to 25 feet away. The further away someone cansee a display, the longer the impulse has to take root. If shoppers cannotdetermine a displays nature and message until theyre in front of it, many willpass it by. Product marketers can avoid this problem by using two-sided ortriangular displays that can be seen at an angle from 20 to 25 feet away.Considering sight lines is especially important in the case of overhead signs.These should always be at an angle from where customers are likely to stand,because people dont stand and look straight up.While studying sight lines for a display, retailers must also take account of thetime shoppers will spend within viewing distance of the display. Thisinformation will affect the size and length of the message featured on thedisplay.It is also important to remember that when signs compete with people forshoppers attention, other people will always win – especially when the signsare not located at eye level.Studies have found this to be true consistently, especially in high-traffic areas,such as checkouts. Retailers can use this to their advantage by identifyingprime people-watching locations, such as checkouts, and positioning signs ateye level, so that shoppers watching one another will see the sign when thosepeople move. Poor placement of information signs not only causes frustratedcustomers to walk out but also takes up the time of sales staff as they areasked the same series of questions over and over again. What type ofshopper is most likely to check out your display? Are you targeting mothers,fathers, children, or grandparents? The answers will determine how you should 3
  4. 4. design and position your display. Women, for example, have a much lowertolerance than men for crowding and being brushed up against in a store.This phenomenon, which an American research company has termed the"butt-brush factor," means that if you have a display aimed primarily atwomen and positioned in a narrow aisle with heavy traffic, youre unlikely toenjoy a high conversion rate of browsers to buyers.The more things there are to look at and the more time it takes to make apurchase decision, the more likely a woman shopper is to be influenced bythe butt-brush factor.HOW DO YOU DEAL WITH THIS FACTOR?Design or position your display so that you provide a natural safe area wherewomen are able to browse comfortably, or simply make sure that your displayisnt located in a narrow aisle. Remember, too, that women might havechildren and baby buggies in tow. This creates the need for additional spaceand good sight lines for watching the kids. Aisles and entrances need to bestroller accessible. Even if babies and toddlers are not a stores prime market,the consumers they bring with them often are.Research for a major bookstore chain identified the butt-brush factor and theneed for women to watch children as major obstacles in converting browsersto buyers. The chain was advised to adopt a store layout with angled insteadof straight aisles to create browsing "nooks" for displays at the end of eachaisle. It also suggested positioning the childrens book section adjacent topopular womens sections, such as romance books, and lowering sight linesbetween the sections to enable mothers to watch their kids and browsesimultaneously.These simple changes led to increased browsing and more book sales. Suchfindings advise product marketers to make it easy. Take a step back. Thinkabout a middle-aged person with a bad back who wears glasses but forgotthem. If that person can successfully interact with your display, then youvecovered your bases. 4
  5. 5. In addition, make sure that if your display features discretionary items, it isavailable and visible to everyone who might influence the purchase decision,particularly children.THE DECISION TO PURCHASEThe power of kids in affecting discretionary purchases is growing with theincreased number of working parents and single parents; parental guilt maybe a key factor in this trend.Most products are handled many times by browsers before someone buysthem. The average lipstick case has been examined six to eight times beforeit leaves the store, a compact disc 12 times, a greeting card 25 times.Purchasers, for example, spent an average of eleven minutes and twenty-seven seconds in the store, non-purchasers two minutes and thirty-six seconds.It wasnt that the non-purchasers just cruised in and out, in those two minutesand thirty-six seconds they went deep into the store and examined anaverage of 3.42 items.The harder it is to find the fixture holding the goods, the more the chances ofa purchase decrease. Shoppers should also be encouraged to touch themerchandise, especially clothing. This is especially important given the factthat the number of purchases made is down significantly from 20 years ago.Purchasers today look at 4.81 items per store visit but buy only 1.33 items.Inadequate service and display presentations that fail to suggest add-onpurchases are typical culprits.A shoppers decision whether to purchase or not is also deeply influenced bylines at the checkout. Stores should look more closely at these areas andmake changes that improve efficiency. A well-designed cash wrap stationcuts transaction time and employee fatigue.Studies show that putting a staff member in front of the checkout to managerush-hour traffic gives the perception of organising and reducing the waitingtime. In another study the difficult transition from cashier to salespersonreduced business. 5
  6. 6. As the retail market grows more cutthroat, retailers have come to realise thatits all but impossible to increase the number of customers coming in, andhave concentrated instead on getting the customers they do have to buymore. If you can sell someone a pair of pants you must also be able to sellthat person a belt, or a pair of socks, or a pair of underpants, or even do whatthe Gap does so well, sell a person a complete outfit.THE POWER OF THE MARKET MAVENS"This is a person you would go to for advice on a car or a new fashion," saysLinda Price, a marketing professor at the University of South Florida, who firstcame up with the Market Maven concept, in the late eighties. "This is a personwho has information on a lot of different products or prices or places to shop.This is a person who likes to initiate discussions with consumers and respond torequests.Market Mavens like to be helpers in the marketplace. They take youshopping. They go shopping for you, and it turns out they are a lot moreprevalent than you would expect."Mavens watch more television than almost anyone else does, and they readmore magazines and open their junk mail and look closely at advertisementsand have an awful lot of influence on everyone else. According to Price, sixtyper cent of Americans claim to know a Maven.Whats really interesting is that the distribution of Mavens doesnt vary byethnic category, by income, or by professional status. A working woman is justas likely to be a Market Maven as a non-working woman; there is simply noclear demographic guide to how to find these people. Mavens are betterconsumers than most. They are very feature oriented and not pushed bypromotions. You can reach them, but its an intellectual argument.THE GROWTH OF THE GREY MARKETOne of the realities of our ageing culture is that in the next two decades wewill witness the largest transfer of wealth in the history of the species, as baby 6
  7. 7. boomers parents pass on their wealth to the next generation. That transfer ofwealth represents a huge opportunity for banks, and the most effectivelocation for building that relationship is at the branch level.The older consumer is fast becoming a major force in the marketplace – yetone that is often poorly understood and inadequately targeted. An importantconsideration, for example, is the fact that while many are highly affluentothers are more time-than-cash rich. Older consumers tend to be lessimpressed than younger adults with the trappings of image. They also valuerecognition of their existence.Retailers need to realise that when it comes to mature consumers they arecompeting both within and outside of their particular category. Seniors,especially those with higher incomes, already have most of the basics andcan afford to make more discretionary purchases. This means that fewretailers can now afford to say: "Older people arent my customers."Although they have some distinct spending patterns, older consumersgenerally buy most of the same things that younger people do, so productmix may be less of an issue in appealing to them than the physical features ofa store. And in many cases, the people who arent customers can be asimportant as the ones who are. One US record company analysed data andfound their largest consumers of rap techno were consumers aged over 55who were buying for their grandchildren. The company, Camelot, devised amailing list, which kept this group abreast of the latest pop music and saw turnover rise by 37%. Personal service is a big draw for older consumers so whathappens to an industry that wants to reduce its face-to-face contact withcustomers? Unless they change their ways, banking and financial services toseniors are heading for retail meltdown.The impact of ageing eyes is just beginning to be felt in the creative processof marketing. The implications extend far beyond issues of print size and style.Take one simple example. As eyes age, they do not respond as quickly tochanging light conditions. When mature customers enter a store, they mayactually pass a store communication system or point-of-purchase displaynear a doorway before their eyes have adjusted. 7
  8. 8. BUILDING LOYALTY AMONG CONSUMERSThe growth in competition and innovation coupled with the disloyalty of thenew consumer is giving rise to ‘churn’ - the steady but constant birth anddeath of brands and retailers. The greatest myth that is harming retailerstoday is ‘If we sell a good product at a reasonable price- that is goodenough’. New research confirms that satisfaction does not equal loyalty withthe new consumer: every day customers who are satisfied with one brand orretailer defect to another.The importance of creating customer loyalty and generating new business viaexisting customers cannot be emphasised too strongly. These are thefoundation stones on which some of the worlds mightiest business empireshave been founded.And its not hard to understand why. First they offer the most powerful of alladvertisements, third party endorsement. If they are sufficiently impressedthey may even do some of your selling for you, among their friends andcolleagues. Second they are usually in the best position to know which othercompanies are most likely to be interested in buying from you. Finally there isthe added bonus that such a trustworthy and enthusiastic addition to thesales force all work for you for free! Which is one reason why converting theseleads from prospects to purchasers is highly cost effective.Accepting that not every customer will provide new business leads and thateven the hottest leads cannot always be persuaded to buy, networking in thisway will still ensure your sales performance remains high.Your companys culture will be optimistic, active and achieving as the resultof positive energy created through a process that I call the Law of MultipleEffects. Customer care, like Total Quality Management, has become one ofthe business buzz terms of the last few years.Unfortunately despite the millions of words written and spoken about caringfor customers, it still appears to be far more talked about than practised.While a survey among the marketing directors from over 3,000 top UKcompanies found that the vast majority saw customer care as essential for 8
  9. 9. winning and retaining customers, many paid only lip service to the concept.Their idea of what such a programme entailed was limited and naïve, withless than a quarter even bothering to measure customer satisfaction. Morethan half cited product quality and competitive pricing as their chief priorities.By contrast, telephone response, delivery, dealing with complaints andtraining front-line staff were seen as far less significant.Relationship marketing, designed to target specific products and services toindividual customers, was consistently rated as an "insignificant" aspect ofcustomer care programmes. Yet research shows neither quality nor pricingare the chief reasons why customers take their business elsewhere.Only 14 per cent change suppliers because of dissatisfaction with quality anda further 9 per cent are tempted away by lower prices. More than two thirds,however, remove their customer as a result of "an attitude of indifference" onthe part of their suppliers.While both quality and price are extremely important, what keeps customersloyal is being treated as individuals. The simple secret of customer retention iscustomer super satisfaction.Recent studies have shown that customers will accept two levels of service -Desired and Adequate. The Desired level is the service customers hope tofind. It is a blend of what they believe can and should be provided. TheAdequate level is that which customers will accept without complaint.Between these is a Zone of Tolerance. This varies from customer to customerand, potentially, from one purchasing situation to another for the samecustomer. Among the factors influencing the extent of this Zone is:* Customer sophistication. The more a consumer knows what can and oughtto be achieved, the greater their expectations. A guest who rarely stays at ahotel, for example, may have a lower level of expectation than anexperienced business traveller. One consumer told researchers: "As Ive grownand learned more, I now have more to compare with."* Availability. At times of scarcity people have much lower expectations anda wider Zone of Tolerance than during periods of plenty. "When your options 9
  10. 10. are limited you take the best you can get," one consumer told me: "Myexpectations are not necessarily lower but my tolerance level is higher."* Urgency. In an emergency we expect and demand the best. If you aretaken ill for example, second-rate medical treatment is entirelyunacceptable.* Price. The more we pay the greater our expectations for the serviceprovided and the narrower our Zone of Tolerance. When flying First Classacross the Atlantic you expect to be treated better than those travellingcoach.There are two aspects to delivering any type of product or service.The first, called the Outcome Dimension, deals with suitability and reliability ofwhat is sold. A customer, not unreasonably, expects his purchase to performdependably and in accordance with its specifications. If you buy the servicesof a travel agency, you expect them to book the tickets asked for on thecorrect flights and within budget.Suppliers receive no special appreciation for satisfying Outcome Dimensions,only criticisms if they fail to do so.The second element is the Process Dimension. This is the manner in which aproduct or service is delivered and has four components:Tangibles - Everything your customer sees, hears or touches. They include theappearance of showrooms, retail premises, reception and bedrooms inhotels, plus sales and advertising literature.Ask yourself:Do my customers feel comfortable when they call to see us?Are our premises attractive and welcoming?Does the atmosphere communicate a strong desire to do business, or is itunwelcoming and depressing? 10
  11. 11. Responsiveness - The speed with which your customers needs are met andthe willingness of your staff to help. Do they go beyond what customers mightreasonably expect by providing a superior service?Assurance - The knowledge and expertise possessed by your staff, theircourtesy in addressing customer needs and the trust and confidence theyconvey to customers.Empathy - The customers belief that they are being listened to andunderstood by the supplier. That the attention they receive is genuinely caringand tailored to meet their specific needs.Customers judge Outcome Dimensions only after the product or service hasbeen delivered. After all you cant know whether a product or service isreliable and suitable except by using it. There is no choice but to suck it andsee.Because customers are in a position to judge Process Dimensions (Tangibles,Responsiveness, Assurance and Empathy) while the service is being delivered,they are the most important factors in meeting and exceeding your customerexpectations.Customers of firms at a Competitive Disadvantage will be disloyal and eagerto change suppliers whenever the opportunity arises.Those operating at a Competitive Advantage enjoy a measure of loyalty buttheir position is far from stable. Customers can still be lured away bycompetitors able to demonstrate that they offer a higher service.The only way to win business for life is to franchise your customers by soconsistently providing a superior service that they become virtually extensionsof your own company. Not only giving you unwavering loyalty but by bringingin new business through recommendation. Franchising your customersinvolves consistently performing at the Desired Level while seizing everyopportunity to exceed that level.Different types of consumer will be described, from “terrorists” out to wreckyour business to the super loyal who will stay with you no matter what. 11
  12. 12. New Research has revealed an array of fascinating findings about how weshop. These findings can be used to design store floors and displays that makeconsumers as psychologically comfortable as possible in order to inducemaximum purchase desire. No displays exist in isolation. People shopdifferently in different types of stores, even if they are shopping for the sameproduct. Which is why successful marketers vary the display depending onthe type of retail outlet involved.In what are termed “task-oriented selling environments”, such as banks,chemists and supermarkets, for example, displays located between the pointwhere the shopper completes his task and the check-out are more likely togenerate impulse sales than are displays positioned between the entranceand the task-completion point.Once somebody has finished the task, theyre willing to consider otheroptions, and theyre moving at a slower pace.Prescription shoppers in chemists, for instance, are often collecting medicinefor a family member, and are more likely to look for something for themselvesas they move to the check out.Even the positioning of the front of the premises has an impact on theshoppers’ psychology. The longer customers have to think about possiblyentering a store, the more likely they will. Research has shown that the mostimportant view of retail premises, bank or building society is often a side orapproaching view. The first opportunity most retail premises have to attract apotential customer can be up to 50 yards before he or she arrives at thedoorway. On busy streets and in shopping centres progressive planners havebeen allowing stores to build out their storefronts to enhance pedestriansview as they move down the pavement or centre concourse.In the same spirit, windows featuring displays that the consumer canrecognise or identify with at a 20- to 25-paces are most effective in attractingcustomers.My research has also established a number of general rules concerningwindow displays. 12
  13. 13. First, it is far more effective to get across two messages positively than fivemessages possibly. The secret here is to keep it simple. In many retaillocations, you can count on the fact that your customer base will pass yourwindow with a certain amount of regularity, be it twice weekly, or in somecases, daily. Simple windows that change often may very well be a better useof the display budget than elaborate windows that remain in place for longerperiods of time.Another important consideration, especially for retailers dependent onimpulse purchases, is the entry point into the store. The entrance and first 10 to20 paces into the store are the most crucial elements in forming theconsumers perception of that business and putting them in the mood to buy.This “entry impress zone” extends some 15 feet into a retail location from anyentrance. Shoppers enter this zone at a particular walking speed andgradually slow down. At the same time, their eyes adjust to the lightingconditions and their body to temperature difference between the store andthe outside.One common flaw of store entrances is failure to plan a transition zone.People have many different walking speeds. The pace that they move downa rain swept street or across a hot parking area is very different from thespeed at which they move through a store.It takes time for people to slow down once they get through the storesentrance. Few retailers take the need for a “decompression zone” intoaccount, yet my research has consistently shown that displays placed closeto an entrance fail to attract much notice. It takes around 10 paces to adaptto the stores lighting, move down through the walking gears and move into“shopping speed."By the time a shopper has slowed to this pace and adjusted to in-storeconditions theyre have already moved past that display.Retailers should never place anything of value in this decompression zonebecause more often than not it will be overlooked. By placing merchandise 13
  14. 14. at the far end of the decompression zone sales can be increased by at least30%.Directional/promotional signage and displays are also far more effectivewhen placed deeper into the store. The transition from walking to shoppingspeed in the decompression zone (the first 10 to 20 feet inside the door) iswhere signage is least effective.Other common mistakes: Delivering a message that takes 12 seconds to readat a point in a store where a consumer spends only two seconds. It just won’tbe read!Another factor retailers must take into account is known as the invariant right.From early infancy, for example, children will approach and reach out toobjects using their right hand more frequently than their left.Shoppers tend to stay on the right as they stroll down shopping-centreconcourses or along the pavement. Which is why, in a well-designed airport,travellers drifting toward the departure gate will find the fast-food restaurantson their left and gift shops on their right.People are prepared to cross a lane of pedestrian traffic when hungry but willrarely do so to buy a magazine or souvenir.This is also why retail clients should ensure that their window displays arecanted, preferably to both sides but especially to the left.A potential shopper, approaching the store on the inside of the pavementwith the least impeded view of the store window, will be able to see thedisplay from at least twenty-five feet away.Why do a majority of shoppers favour the right?A likely explanation is that the left hemisphere of the brain controls the rightside of the body. Research has shown that this hemisphere is associated withan approach response and positive emotions. The right hemisphere, bycontrast, controls the left hand, and this is associated with an avoidanceresponse and more negative emotions. 14
  15. 15. REFERENCESAriely, Dan, and Gregory S Berns. "Neuromarketing: The Hope and Hype ofNeuroimaging in Business." Nature reviews. Neuroscience (2010)Dagher, Alain. "Shopping Centers in the Brain." Neuron 53, no. 1 (2007)Davidson, Richard, J. "Anterior Cerebral Asymmetry and the Nature ofEmotion." Brain and Cognition 20: pp 125-151.Davidson, Richard J. "Cerebral Asymmetry and Emotion: Conceptual andMethodological Conundrums." Cognition and Emotion 1 (1993)Fionnuala C. Murphy, Ian Nimmo-Smith, and Andrew D. Lawrence "FunctionalNeuroanatomy of Emotions: A Meta-Analysis " Cognitive, Affective &Behavioural Neuroscience (2003)Knutson, Brian, Scott Rick, G Elliott Wimmer, Drazen Prelec, and GeorgeLoewenstein. "Neural Predictors of Purchases." Neuron 53, no. 1 (2007)Lewis, David and Bridger, Darren . “The Soul Of The New Consumer.Authenticity: What We Buy And Why In The New Economy”. Nicholas BrealeyPublishers [2000]Lewis, David. “What The Consumer’s Brain Tells The Consumer’s Mind – AndHow We Can Discover What It Says” Mindlab International ®. Free reportdownloadable from [2003]Lewis, David. “Market Researchers Make Increasing Use of Brain Images”,ACNR Volume 5 Number 3 July/August [2005]Phan, K Luan, Tor Wager, Stephan F Taylor, and Israel Liberzon. "FunctionalNeuroanatomy of Emotion: A Meta-Analysis of Emotion Activation Studies inPET and fMRI." NeuroImage 16, no. 2 (2002) 15