Are you a Type Q or Type R Shopper?

When I completed my own doctorate (waaaay back), one of the tangential observations made was the following shopping typology:

Type Q: The functional, utilitarian patron who shops of necessity, as quickly (hence: type Q) as possible because it is a chore. This type of behaviour is characterised by small but frequent purchases which are purely aimed at acquiring merchandise for consumption. Duration of the visit is usually short, and only a limited part of the centre (if it is a large centre) or a small (convenience) centre is patronised. Target stores are usually supermarkets for grocery shopping. 

Type R: The hedonic shopper who does not necessarily buy a lot but has fun and enjoys the shopping task. The visit to the centre is in a relaxed (hence: type R) manner. The aim is to enjoy the shopping experience and the actual purchase and consumption is secondary. That is the patronage behaviour does not necessarily extend to buying behaviour - or is limited to entertainment orientated consumption.

Type Q and Type R never took off, but the industry has subsequently adopted (none of my doing) the typical distinction of the Social and the Functional shopper. The reason why Q & R works for me is because it relates to two very different customer experiences and hence can be translated pragmatically into specific programs.

The Third Dog

The retail supply chain is broken and I am sadly observing systemic failure in the retail supply chain,. The symptoms are as follows:

1. Landlords may tell retailers that their stock is not what the market wants and the customers are simply responding to the fact that they can get what they really want somewhere else. They argue that the customer service levels are not good enough and that the presentation is not up to standard.
2. Franchisors will berate Franchisees for not adhering to the Operations Manual and for failure to engage the customer in the right way; not serve the hot dog the way it was meant be served or that the form wasn’t completed on time. It’s a constant challenge to get people to buy into the ‘system’.
3. Retailers (in shopping centres) on the other hand always blame centre management for lack of traffic and too much competition in their category.
4. Franchisees always think their franchise is a little bit different and deserves to be the exception in a dozen little ways.

Who is right and who is wrong? The short answer is they are all wrong – about each other – and this is the cause of the systemic failures in the supply chain.

We often have to spend a great deal of time on facilitating discussions to help each party understand the other’s point of view.

1. We have to help the landlord understand that the reason why the retailer is not engaging with centre management is that they rightfully don’t have respect for centre management. Just like customers punish the retailer with non-attendance when the retailer does not have what they want, similarly if centre management is not adding value to the retailers’ lives, they cannot expect any engagement from the retailer.
2. We have to make sure the retailer understands the landlord is not a financial institution and that they cannot use them subsidise cashflow shortfalls. They must understand that the centre teams can drag customers to the centre but not into their store.
3. We have to make sure the franchisee understands the Franchisor cannot guarantee success and that the ‘system’ is missing one important ingredient and that is the franchisees commitment and hard work. And of course that territories are not as different as they’d like to believe.
4. We have to make sure the franchisor understands the franchisee will not buy into the consistency message if the Franchisor treats different franchisees differently because that undermines their own demand for consistency. (If you demand consistency, you have to live it yourself.)

‘While two dogs are fighting for a bone, a third runs away with it’; so the old saying goes. And it is true here too.

Whilst there is a tussle for power and control between landlord and retailer, between franchisor and franchisee, the customer (the third dog) runs away with it.

None of the business entities in the retail supply chain have much power anymore. And whatever power you exert over another party is tenuous and will fade anyway. The consumer is empowered. They have a little device in their pocket called a Smartphone, and that means they can any information and increasingly any product from anywhere in the world at any time they please.

A collaborative supply chain is a strong supply chain.

But, I am not optimistic:

• How many Shopping Centre Landlords have an actual, active and successful Retailer Engagement Strategy?
• How many Manufacturers have collaborative, transparent Trade Marketing Strategy that goes beyond mere promotion and equips and empowers their retail network?
• How many Franchisors invest in the development of their network beyond the minimum compliance at the ‘system’ level?

Have fun.

Dennis Price

ganador.com.au: architects of high-performance retail environments.

Three persuasion techniques we can learn from babies

On our very first day on the planet, the influence task that faced us was immense. We had to persuade those around us, without language, without consciousness, without anything like the oratorical prowess that we possess as adults, to take care of us—to subjugate their own interests at the expense of ours. 

Babies are equipped with three features, fitted as standard, calibrated to cut straight through our deliberation, which are:

1. An unignorable soundtrack that figures at the top of nearly everyone’s list of aversive acoustic stimuli;

2. Appallingly cute good looks, that prove pretty much irresistible to anyone caught in the spotlight;

3. A hard-wired propensity to make eye-contact, to attend to the eye-regions of faces.

In one study, a bunch of wallets were left on the streets of Edinburgh, each containing one of four photographs. A happy family. A cute puppy. An elderly couple. And a smiling baby. Which ones, the researchers wondered, would find their way back to their "owners" most often?

Of the 40 wallets of each type that were dropped, 28% of those containing the portrait of the elderly couple made it back successfully; 48%, the family snapshot; 53%, the photo of the cute puppy.

And a whopping 88%, the picture of the smiling baby!

HT: Via Kevin Dutton - Unfortunately no source was recorded at the time. Happy to rectify that if you can assist.

Retailers: help is on it's way

 A friend of mine has put his hand up to help you.

Michael Ratner (owner of Compendium) is collecting some basic data that will assist retailers to understand where they are at - exactly - and how they compare.

He is braver than me, but it is a worthwhile exercise.

DOWNLOAD this simple spreadsheet and provide him with some basic percentages and you will get a huge benefit in return. It won't take long to do - JUST DO IT...

At the end of a tough week you deserve this

And just when you thought life couldn't get any tougher... it does.

SOURCE: http://www.seashell.com.au

Random stuff you need to know about

In YESTERDAY’S post I wrote about how your body ‘thinks’ = Embodied Cognition.

I asked you a question. If you haven’t read it, read it quickly before continuing because the answer follows at the bottom of this post.

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I have changed my writing schedule to bring you DAILY blog posts instead of a weekly posts and a monthly (more-or-less) newsletter. But sometimes you just come across stuff that can only be shared as ‘titbits’ in a newsletter, so I am introducing a ‘random stuff you need to know about’ post.

1.  There is a place that kids can turn to get homework help. Mmmmh….

2.  I juxtapose this with Seth Godin agitating for change in the school system – a noble dream and interesting read. (Although it has been around a while.)

3.  Two interesting facts from some academic research:

ONE

Our results show that a higher degree of customers' convenience orientation in contrast to the degree of risk aversion and service orientation encourages the selection of the online channel over the offline channel. 

TWO

The negativity of the service failure has the potential to escalate when consumers who are part of a traditionally stigmatized group believe the service failure to be a purposeful event brought on by physically observable differences in appearance

As always, YOUR JOB when being confronted with facts like these are to ask yourself: SO WHAT? And then respond to your own interpretation.

4.  And fourthly, being entrepreneur, I was attracted to the title of this site: http://www.thestartupofyou.com/ - and since it was written by the founder of LinkedIn I thought it was interesting enough to check out.

5.  This wonderful piece from Ian Martin on turning 60 – one for the Boomers.

6.  Have you ever wondered what the world's first website, looked like? It is recreated on its original URL 20 years since it launched? Check it out.

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The answer to yesterday’s question is:

People moving UP are more likely to donate because they are more ‘upstanding’ or ‘high-minded’ and will act accordingly.

Dennis Price

GANADOR: Building businesses that can jump the curve with certainty.

Contextual commerce is the new black

Here is a heads-up for contextual commerce. We had eCommerce, the F- and S- and T- and now we are simply back at c-commerce.

There are two converging trends that are now creating the typical mash-up of opportunities and crisis for retailers. (Hands-up if you have had enough change to last a lifetime?)

1. Content Marketing.

What? You didn’t know? Goodness, there is an INSTITUTE already and a recent report has found that 96% of Australian marketers use content marketing. But this post is not about content marketing so here is a good current overview. Content marketing is the background you must understand in order to get what contextual commerce is all about. So a short definition will suffice:

Content marketing is the art of communicating with your customers and prospects without selling. It is non-interruption marketing. Instead of pitching your products or services, you are delivering information that makes your buyer more intelligent. The essence of this content strategy is the belief that if we, as businesses, deliver consistent, ongoing valuable information to buyers, they ultimately reward us with their business and loyalty.

2. eCommerce

It has proven pretty difficult to make a buck on the internet. There are of course a few success stories, but relative to the number of websites online, there are an infinitesimal number of commercial successes that are purely digital. (Internet users have grown up on a diet of FREE, it seems.)

Almost every business model of any internet enterprise that does not sell physical goods, pornography or advice on how to make money on the internet makes money via advertising. Google makes BILLIONS with Adwords.

But even the Adwords goldmine will run dry - unless Google jumps the curve to acquire a new platform for contextual commerce, which is the convergence of content and ecommerce.

Opensky focuses on social network for its contextual commerce efforts.

And Mulu focuses on what they call ‘shoppable ads’.

The above are applications that provide contextual commerce. That is, there are services (applications) that allow the product owners to ‘own’ key words on other websites (content providers) which, when clicked on, does not take you to a website and does not pop up and advertisement – it allows you to buy the item straightaway. ) There are several examples of how some publishers are riding the content wave.)

For example the technology to click on an item of clothing an actress on TV is wearing and then be taken to your shopping cart is rapidly maturing. That is an example of the ‘context’ of that particular item of clothing (provided by the television story) is what sells the item. (I.e. not an advertisement during a break in the programming.)

Contextual commerce is set to disrupt marketing as we know it substantially. It is a world without ads, because everything you see and read and interact with IS ALREADY the ad. Another way is to view it as product placement that is directly shoppable.

What to do?

I advise clients to bet on every technology horse possible. Not because we don’t know what to do or which technology is the best fit, but the process of constantly re-setting the business to cope with changing technologies is the core competency that every organisation must develop.

I think Facebook is going to fail – or at the very least shrink substantially, but at the same time I still advise many clients to hone their technology competencies on Facebook even though in a few years it may be filed in a memory cabinet along with Ning and Myspace and a long list of others. As I made clear in this post, I am not anti-internet. On the contrary if technology is not part of your present, you have no future.

If you put your hand up in the opening paragraph, please note my question was not facetious: the only way to survive, grow and be successful is to build resilient (or rather antifragile) organisations. That is; building an organisation that is designed to cope with constant change is the goal

Go to it…

Dennis

Ganador Management Solutions specialises in helping organisations in the retail supply chain deal productively with challenges of change.

On the Ganador business model

I am (obviously) fascinated by business models. That is how you design your business to respond to the opportunity in the market.

In my mind your strategic success is determined by your business model and thinking and tinkering on your business model is more important than strategic planning - which usually perpetuates the status quo.

When we started out, we replicated the business model that worked for us running our own business in South Africa. (Consulting, Training, Mystery Shopping.)

Those three elements work well together:

• Mystery Shopping finds the problems
• Consulting identifies the solutions
• Training Implements the solutions

Over time we also added:

• A Publishing division (we have so many training resources it makes sense to sell it to other companies)
• A Technology division (we use two amazing technology platforms for eLearning and for Knowledge Management and we are registered resellers of those platforms.

But putting all of the above into an ‘elevator pitch’ becomes hard. Explaining to a CEO of a potential client what we do is not easy. In fact, whilst it may be true, it is not credible to for a small organisation like ours to be a ‘one-stop shop’.

On a more personal note; we now simply say we are business architects: if you are business with a retail presence (brand or retailer) we will design and deliver solutions to make that happen. It may or may not include training and it may or may not include technology - and so forth.

I hope our message is clearer. I hope by stripping back everything that we do to only the essentials (building businesses in a retail environment) is a better way of communicating – because it is more relevant to the needs of the intended receiver.

Emails, comments and even phone calls are welcome.

Dennis Price

Your BODY doesn’t only ‘talk’, it actually thinks

Many people still mistakenly believe that the mind operates like a computer. It doesn’t. We increasingly understand that the brain’s job is not to simply process information but to control the actions of your body. The technical term is embodied cognition.

If you study linguistics you will appreciate how this works – and understand the relevance the sales, communication and persuasion.

If you think of abstract good things (morals, God, virtue etc…) you tend to think of those as ‘up’.

If you think of abstract bad things (the devil, depression, criminals) you tend to think of those as ‘down’.

That is you apply a spatial metaphor to abstract concepts. These ‘embodied metaphors’ are the building blocks of perception, cognition and action.

In practice what this means is that the actual physical experience and expression of the body determines thoughts, feelings and perceptions. Let me illustrate:

People who are holding a warm drink (coffee) feel more positively inclined (warmly) towards the other person.

People who are seated in soft chairs are more flexible in their negotiating positions.

Play along to see if you understand the concept:

You are raising fund for a charity. You have to choose where to position yourself and your bucket. Where would you stand?

1. At the bottom of the escalator catching the people who are descending?
2. At the top of the escalator catching the people who are ascending?

Answers in TOMORROW's POST. (Subscribe now :))

Dennis Price

GANADOR: Building businesses that can jump the curve with certainty.

A landslide starts with this

Can you hear the dripping pipe?

Most people were asleep in their beds when the sound, described as being ‘like a fighter jet’, woke those in surrounding lodges.

Outside they discovered a black void where two large buildings had once stood and they started digging frantically, spurred on by desperate cries from the rubble.

The main cause of the 1997 Thredbo landslide was the collapse of the Alpine Way above the town. It was the result of a combination of factors, including wet weather and the way the road had been constructed. 

The Alpine Way, which runs above the village of Thredbo and through the Snowy Mountains, was originally built as a service road during the construction of the Murray 1 and 2 hydroelectric power stations in the 1950s. After the hydroelectric stations were finished, the road was upgraded, which included the addition of landfill.

The people weren’t killed by the snow or the weather; it wasn’t the buildings and it wasn’t a slow emergency response. At least none of these were the root cause of these deaths.

Why did the road collapse?

The eventual root cause was determined to be a dripping pipe that undermined the foundation of the road which eventually caused it to collapse.

In your business you are constantly troubleshooting, trying to find the problems and trying to fix them. The real issue is that people misunderstand the difference between problem and symptom.

Managers/ owners (even CEOs) say they have a ‘problem’ because of “poor sales volume”. Or that the “market share is declining” for instance.

How often do YOU say or think that you have a problem because of declining revenues?

Declining revenue is not a problem – it is a symptom. Ditto for market share. And shrinkage. And many more…

The Solution

The way to get to the root is to ask ‘WHY’ at least five times – or until the answer to your question is ‘just because’. Only then will you have reached the likely root cause. The same techniques can be applied to any ‘issue’ – say absenteeism or poor customer service.

The Exercise:

Most people say they have a problem with ‘declining revenue’. 

I cannot tell you why your business has declining revenue (without knowing much more) but I can tell you how to determine the answer. So, here is the challenge for AGHA members:

Keep asking WHY to the question below and keep going until the answer is ‘because’ or there is no other answer.

Q: Why is my revenue declining?

Have fun.

Dennis Price

GANADOR: Architects of high-performance retail environments.

Free eBook – ‘101 uncomfortable truths’ and like the Facebook page for a daily dose of smarts.

The power of social to do harm

There are obvious benefits to being social.

It creates a sense of belonging and it plays an undeniably important role in shaping your identity. It offers protection and enables growth thorough cooperation and sharing. It is efficient.

It is no surprise that psychologists have isolated social proof and reciprocity and peer pressure and the like as powerful drivers of behaviour.

But gangs and suicide bombers are also testimony to the power of social forces. Unarguably these are not good. In fact extremists of any kind are linguistically a misnomer in the sense that ‘extremity’ implies being isolated, single and somehow rare. On the contrary, extremists are some of the most closely knit social groups that exist. Their beliefs are extreme, but they are highly socialised.

As participants in various social groups, we must learn to appreciate that sometimes belonging to two social groups are mutually exclusively. In some cases it is obvious in others not so much.

You can’t be a member of two opposing gangs – that is obvious. As groups grow they become weaker after a certain point.

Let's compare one group everyone is familiar with (Christians) with the company/ organisation that employs us.

You can’t be a real Christian and also be ‘of this world’. Christianity is losing ground in developed countries – not because it is being challenged by more educated people who have a better grasp of science.  There are many believing scientists – those belief systems are not irreconcilable at all.

(Ironically, it is more likely that people who have a poor grasp of philosophy to end up favouring scientism, mistaking that for scientific thinking. But that is another topic for another day.)

Christians are losing ground because the glue that bound them together (strong beliefs in specific norms and values guided by the Bible) are weakened. Christians are progressively unwinding the more polarising beliefs (about sex, marriage, homosexuality etc.) and it is this misguided attempt at seeking acceptance with the broader society that makes the group less distinctive and undermines the loyalties that the existing members have to the group.

As the group seeks to grow and spread its influence, it finds that it has to become more permeable at the edges of its definition. And this causes it to lose shape.

The same principle applies to companies who grow beyond a certain size. Whilst the Dunbar number may not be scientific, it is intuitively a very appealing concept.

When companies lose their founders/ great leaders (Apple>>Jobs) then social cohesion suffers. We call it something different – we may call it culture or values for instance; but ultimately it is the glue that loses its power to make the component parts adhere to each other.

This has implications for community engagement/ management and all other groups too.

We all want to belong to groups, but there are lessons we should heed:

1. The bigger the group gets, the weaker the social cohesion
   
2. Not all groups are positive
3. Blind conformity is dangerous

Chuck Norris and Rambo have now joined forces in The Expendables, but belonging is not always all it is cracked up to be. 

We need our fair share of Lone Rangers too.

Is your brand brave enough to do this (Fun)

Sometimes it takes a brave brand to inject some fun... but it is such a fine line. What do you think? (Video)