Research reveals the various ways in which consumers respond when they experience poor service.
Of the six to eight key trends we are facing right now,
arguably this is one will arguably have a more profound impact than some
The Trendwatching Report calls it ‘guilt-free consumption’ and it is well worth a look. They define it as follows:
epic quest for more aware, more ethical, more sustainable consumerism.
The most compelling statistic is quoted as follows:
Indeed, a recent global study identified 2.5 billion of these 'aspirational consumers' (representing one third of the global consumer class). These consumers are defined by their love of shopping ( 78% ), desire for responsible consumption ( 92% ) and their trust in brands to act in the best interest of society ( 58% ).(BBMG, GlobeScan and SustainAbility, October 2013)
I know that title is not optimised for SEO, but there really can be no other; trust me...
Example #1 (Those who shall remain nameless)
This is a summary of the findings of a major research project
(that shall remain nameless) that cost (in all probability) well north of
$100K. Read first, and see what you get out of it.
- Technology has empowered the customer and given him/her another channel to shop
- Consumers are now empowered
- It all comes back to the in-store experience
- Understanding the customer allows you to build trust and sell more to them
- Gen Y is different to the Boomers
- Big Data means we have lots of information at our disposal
- Shopping centres have the opportunity to practice place making
- In densely populated areas retailers can have higher trading stores
- We must combine the best of the digital and analogue world
- You need a mobile-responsive website for mobile world
- We must provide world-class customer experience
- Great customer service has always worked and will always work and must be retained
- To remain competitive we must compete with the international competitors
- It is important to understand customers because you can’t only compete on price
- Australia is becoming more urbanised
- Retail is the third space for consumers where they seek a compelling experience
- Domestic retailers in US/Europe are looking at expanding to Aus because they are seeking expansion in emerging markets
- The customer is king
[Disclaimer: This is paraphrased from the ‘Executive Summary’. I did not download the full report; for obvious reasons.]
This is what passes for research? Wow. I suppose we get fed the stuff that we deserve. I am certain the research leader was Captain Obvious. It turns out that this research is made available publicly as an exercise in ‘content marketing’. If there was any real value in the research and the insights were actionable, the organisation would have kept that IP confidential.
Example #2 (If it looks like research, it is research…right?)
The current buzzword du jour is ‘neuromarketing’. It is a discipline I claim some expertise in. Our retail sales training program was created some 7 years ago based on those principles, and I have formal qualifications in Consumer Behaviour and have been working in the field for over 20 years. Even so, I would not classify myself as an expert– but merely that I am an avid student of neuroscience.
Yet, the internet is awash with people who claim expertise, often based on one reading of Cialdini’s book – or more likely, based on following a few bloggers who have all read Ciadini’s book. Not to get into a slanging match with the newly converted about this, but suffice to say that 90% of those so-called ‘research projects’ were conducted by US professors who are driven to achieve tenure at university by being a mass publisher of ‘scholarly’ articles, and the research is conducted on (that very representative sample of the world population) of 20-25 year old America College kids.
Example #3 (Student or Master?)
- A 28 year old student debunks long-held economic theory of two Harvard Professors.
- And again: Another part–time student debunks the corner stone of the Positive Psychology discipline. (See notes about Neuromarketing above.)
The conclusions that I draw from this is that:
- Real experts cannot be relied upon to provide real insights, reliably.
- Many people profess to be exerts when they are not even remotely qualified.
- You deserve whatever consequences, when you suspend your critical thinking in favour of following a flavour of the month.
The advice I can offer (ironically but sincerely):
- Treat all unsolicited advice and all unsubstantiated content as opinion that holds no more value than your own thoughts. (I write either to explain a useful skill or a piece of knowledge, or to provoke thought. This post is in the latter category.)
- Almost every piece of ‘content’ that is freely given out on the internet has an unseen agenda – there really isn’t anything that is free. (I write here so that you can know of me, and think of me in a certain way, and that is my agenda.)
- Apply the common sense test and trust your judgment when confronted with ‘research’ or ‘expert’ advice.
- Google is a tool, not a solution. (Nicholas Car wrote smartly about it some five years ago and asked the question: Is Google making us dumb? Don’t fall into the trap.)
Ganador: Learn to perform: for the 21st century retailer dealing with the 21st century consumer.
Here are six things about retail you may not have known:
- People spend 2.3 seconds on in-store brand decisions.
- Just over 90% of shoppers make unplanned purchases.
- About 70% of shoppers say they responded to end-of-aisle signage.
- Only about 25% off customers walk past halfway in the typical specialty store.
- Sales can increase by1.3% when dwell time increases by 1%.
- Most women (86%) look at price tags – less so than men. (I don’t know the exact percentage.)
(Stats from an industry research project by Miller Zell cited here.)
These are all facts based on research. We could scan them and think it is interesting. But the key question is this:
What will you do differently now that you know these facts?
Let’s face it, if you do nothing, nothing changes. What is the point if all the smart people do the hard work to find out the science and the truth – and we simply continue to ignore it?
In March 2013 I wrote an article “How to lose sales quickly” on Inside Retailing and a commenter took me to task open my view and understanding of neuroscience. That debate was off-topic, but I felt compelled to debunk what goes for science in Neuromarketing a month later (April 2013) in this article.
You should be used to me being ahead of the curve by now (he writes with some self-satisfaction) but this explored in much greater detail in a July 2013 on Slate in an article questioning the science in Neuroscience.
The article concludes:
Despite the new user-friendly EEG technology, performing brain research is still a difficult endeavour. The challenge (as it has always been) is to perform well-designed experiments that are as unambiguous in their interpretation and conclusions as possible. This is not a trivial matter, and will be true no matter what new technologies are available for studying the brain. In the mad rush to commercialize the new EEG technology, the neuromarketing researchers are currently gleefully painting over the logical and technical cracks in their methods with glossy results graphs and 3-D pie charts. Those considering using these new research methods for their latest advertising campaign would do well to heed the classic commercial advice: caveat emptor.
And to that I say amen.
I will also say that, given our academic background and our personal interests, consumer behaviour is our ‘thing’ so we really make an effort to stay on top of it.
We incorporated Neuroscience (actually Behavioural Economics would be a better description) into our Retail Sales Training program. We felt ourselves qualified to do so, but we extensively adapted some of the insights offered by Behavioural Economics to fit with what we already know to work well in a retail environment and what the retail employees would realistically be able to incorporate into their workflow.
Much current research is conducted by commercial marketers and those insights are proprietary. The academically published work is largely based on experiments conducted on American College students, and this presents in my mind some serious limitations to the research findings.
Buzzwords come and go for a reason.
I am not suggesting that Neuromarketing is going to disappear overnight, but I am suggesting that ‘sound bites’ offered by gurus whose entire understanding of the subject is based on a few pop-psychology books should be taken with a forklift full of salt.
GANADOR: BUILDING A HIGH-PERFORMANCE RETAIL PRESENCE FOR BRANDS AND RETAILERS
The definition of shelf-space-elasticity is the ratio of additional sales to additional space allocated in retail settings.
Based on a meta-analysis (Elsend, Journal of Retailing, May 2013) of 1,268 estimates of shelf space elasticities, the author found that:
- The average observed shelf space elasticity is .17, which varies across product categories, with the lowest estimates for commodities, followed by staples, and the highest estimates for impulse buys.
- Store size moderates the effect of product characteristics on shelf space elasticity: in large stores, the difference between elasticities for brand versus category is greater than in small stores.
- Shelf space increases results in greater elasticity estimates than shelf space reduction, a finding that emphasizes the application of shelf space variation as a useful marketing tool.
The author does not explicitly state this, but one assumes that the findings apply ‘within reason’. That is; if you increase shelf space allocation by 10%, sales will increase (on average) by 17% - up to a point.
Also please note this does not mean that sales will increase from 10% to 17% - it means that sales will increase by a factor of 17% (and not by 17%).
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.
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.
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...
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?
- At the bottom of the escalator catching the people who are descending?
- At the top of the escalator catching the people who are ascending?
Answers in TOMORROW's POST. (Subscribe now :))
GANADOR: Building businesses that can jump the curve with certainty.
Are you a geek who loves art or maybe a geeky artist? You heard about big data but can't wrap your head around it?
Do check this out.
I don't normally respond to press releases - I am not a journalist and this blog is not about news - but I am writing at the moment about the future of business and retail, and one of the themes is 'chaos theory'. If you know anything about chaos theory you will understand why I am also fascinated by fractals. (E.g look at my website header.)
An aside: One day I was googling a chaos theory topic and came across www.servantofchaos.com and so met Gavin who happened to love just around the corner.
Anyway, here is the press release verbatim - and if I could I would have attended. If you are Melbourne, check it out:
Data Aesthetics in Retail Space is a collaborative project between Make Designed Objects, Robert Foster of Fink & Co and Geoff Hinchcliffe of University of Canberra’s Faculty of Arts & Design.
Virga (an observable streak or shaft of precipitation that falls from a cloud but evaporates or sublimes before reaching the ground) is the product of that collaboration; an LED light and data sculpture formed by internationally acclaimed designer-maker Robert Foster that colourfully expresses itself based on the digital data fed into its environment.
Any data we choose!
Want to watch a colourful representation of the seasonal nature of Make’s sales data?
Feed in the data.
The change in inner Melbourne maximum average daily temperatures from 1913-2013?
Feed in the data.
With bricks and mortar retailers rapidly migrating to the World Wide Web why not bring a bit of the World Wide Web back into bricks and mortar retail? Why not feed the traffic data from the Make website into Virga and see what happens?
The real joy of Virga lies in its abstract representation of a digital world in a rapidly evolving bricks and mortar retail environment.
And it looks way cool…
May 1st, 6-8pm 194 Elgin St, Carlton VIC
Be the first to see Virga, a permanent installation and example of data aesthetics in retail space.
Robert Foster will also be here to launch Critical Play, a new book that catalogues his creative career.
The proliferation of data and its presence in our everyday lives leads us to ask new questions about data and its representation. Rather than the analytical question of which data visualisation has focused, this project focuses on the aesthetics of data, the materiality of data and its cultural role.
Key to Virga is research conducted by staff within the University of Canberra’s Centre for Creative and Cultural Research into; data visualisation; cultural interface aesthetics; emotive lighting design, and 2D and 3D data forms.
Virga aims to provide new insight into the design of data within a retail context; the material aesthetics of data; and the poetics of physical data representation.
<Make Designed Objects >
The launch of Virga coincides with the 10th anniversary of Make Designed Objects. The design store began life in May 2003 when it opened the doors in Carlton in the inner north of Melbourne. Since then the business has grown rapidly to become one of Australia’s finest design stores.
In a market and world where increasingly we have a physical and virtual version of almost everything; people, businesses, streetscapes… it’s not surprising that online retail is booming. And while the news reports a great deal of fear for bricks and mortar retail, this ever changing market presents opportunities for innovation in brokering an extended relationship between the virtual and physical aspects of a retail business such as Make.
It is from within this landscape that Pat Coppel, Director of Make has initiated this collaboration between retailer, designer-maker and academic. The result is Virga; a beautiful sculptural installation that translates our technological data into a spectacular visual language of light and colour. As such, Virga creates a playful narrative around the virtual and physical instances of Make Designed Objects.
Contact: Pat Coppel
.. IF YOU DO SOMETHING ABOUT IT
Here are a few facts to consider.
1. People spend 2.3 seconds on in-store brand decisions.
2. Just over 90% of shoppers make unplanned purchases.
3. Gen Y shoppers are also more likely to make impulse purchases at end caps.
4. About 62% of shoppers say they responded to merchandising displays.
5. About 93% of Baby Boomers, say they prefer product messages rather than price-point messages while shopping.
6. Only about 25% off customers walk past halfway in the typical specialty store.
7. Sales can increase by1.3% when dwell time increases by 1%.
8. You get on average a 10% sales increase with a store design with a left entry and clockwise track.
If I asked you to answer a quiz based on the above, would you pass? Most wouldn’t because it is easy to skim over the list.
The point is this: When you consider these facts, ask yourself the question: SO WHAT?
And then change something based on your answer. Don’t let the facts just slide you by and move on to the next thing because you are busy.
Research and experience is only useful to the extent that it changes what you do.