Tag shopping

You Might Not Look at a Mirror the Same Way Again

Photo credit: Mara 1 on Flickr.In the retail environment, it is common to see a mirror or two located near items that are for sale.

However, the reason for the location of these mirrors might not be as obvious as you might expect.

Having a mirror handy will help customers visualize whether or not an item goes with another item or even if the clothes that they try on fit in all the important places.

However, mirrors also serve several other important functions in retail.

Mirrors Make Us Act in a More Socially Desirable Way

In his book, titled “Brainfluence: 100 Ways to Persuade and Convince Consumers with Neuromarketing,” Roger Dooley points out that, “When we look in a mirror, our behavior is actually altered – at least for a short period of time.”

“The most venerable piece of mirror-behavior research dates all the way back to the 1970s,” continues Dooley. “Like many experiments in social psychology, the setup was simple: children making their Halloween rounds were told they could take one piece of candy from a large bowl of candy and were then left alone. About 34 percent helped themselves to more than one piece. When a mirror was placed behind the bowl so that the children could see themselves as they took the candy, only 9 percent disobeyed their instructions. The simple addition of the mirror cut the rate of bad behavior by almost three-fourths.”

Dooley continues by pointing out, “And it’s not just kids who respond to seeing themselves. Another experiment showed subjects either a live video of themselves (rather like a mirror except for the image reversal part) or neutral geometric shapes. They were then given a small task that required them to exit the room with a used paper towel. Almost half of the subjects who saw the neutral images littered by dropping the used towel in an empty stairwell, whereas only one quarter of those who saw themselves did so.”

The research indicates that seeing their image causes people to think about their behavior and ultimately behave in a more socially desirable way. In fact, influence and persuasion expert Dr. Robert Cialdini suggests that mirrors could be an inexpensive way to cut shoplifting and employee theft.

Mirrors Influence How We Shop

Paco Underhill, founder and CEO of Envirosell, also points out that mirrors are very important selling tools for retailers.

In his book, “Why We Buy: The Science of Shopping—Updated and Revised for the Internet, the Global Consumer, and Beyond,” Underhill points out that, “People slow down when they see reflective surfaces.”

Underhill continues, “Stand and watch what happens at any reflective surface. We preen like chimps, men and women alike. Self interest is a basic part of our species. From shopping to cosmetic surgery, we care about how we look. As we’ve said, mirrors slow shoppers in their tracks, a very good thing for whatever merchandise happens to be in the vicinity. But even around wearable items such as clothing, jewelry and cosmetics, where mirrors are crucial sales tools, stores fail to provide enough of them.”

On the other hand, he warns not to have too many mirrors. As he mentions, “A store shouldn’t feel like a funhouse. At a certain point, all that glass becomes disorienting.”

Conclusion

Mirrors are important sales tools for retailers. Not only do they help people visualize how an item will look on them before they make the purchase, but strategically placed mirrors might also be an effective way to reduce theft by shoppers and employees, alike.

Furthermore, people slow down when they see a reflective surface. Therefore, mirrors can be used by retailers to help call attention to items that are located nearby.

Finally, while many stores don’t provide customers with enough mirrors, providing too many mirrors can also be a problem.

This is something to think about the next time that you are walking through a department store and see your reflection in a strategically placed mirror.

Photo credit: Mara 1 on Flickr.

Note: This post was originally published on HubPages in September of 2012. I removed it from HubPages in November of 2016.

Chad Thiele

Marketing analyst and strategist, content curator, applied sociologist, proud UW-Madison alumnus, and an Auburn-trained mobile marketer. My goal is to help businesses identify trends that will help them achieve their marketing objectives and business goals. I'm currently looking for my next career challenge. Please feel free to contact me anytime at: chadjthiele@gmail.com.

More Posts

In Retail, the Best Price Is Not Always the Lowest

Photo credit: William Murphy on Flickr.Whether in a brick-and-mortar retail store or on a retailer’s website, the price charged for the products or services sold will have an effect on sales.

However, sometimes the retailer with the lowest price around won’t have the highest conversion rates.

This post is intended to highlight some of the ways that price influences purchase decisions in the real world.

Prospect Theory

If you took an introduction to economics class in college, you are probably familiar with the law of supply and demand. It basically asserts that, if everything else remains the same, as the price of a product decreases, the demand for the product will generally increase.

However, in the real world, this relationship does not always prove to be true.

The reason for this can be explained by a theory developed by Dr. Daniel Kahneman and Dr. Amos Tversky.

According to Wikipedia, “Prospect Theory is a behavioral economic theory that describes the way people choose between probabilistic alternatives that involve risk, where the probabilities of outcomes are known. The theory states that people make decisions based on the potential value of losses and gains rather than the final outcome, and that people evaluate these losses and gains using certain heuristics. The model is descriptive: it tries to model real-life choices, rather than optimal decisions, as normative models do.”

As several experts have pointed out, this plays out each and every day in the retail world.

Consumers Will Pay Full Price for Some Brands

As you know, there are a few brands that have established enough brand equity that people are willing to pay higher prices for the products and services that they sell.

Often this means that retailers can sell these products to customers at full price.

And, in some cases, even the sale prices for these items are higher than the full price of some of the less expensive alternatives.

As I will explain later in the post, these products are extremely important to retailers for many reasons.

The Power of a Sale

In his New York Times bestselling book, titled “Contagious: Why Things Catch On,” Dr. Jonah Berger mentions an experiment conducted by Dr. Eric Anderson and Dr. Duncan Simister.

As explained in the book, Dr. Anderson and Dr. Simister partnered with a company that sends clothing catalogs to people all over the United States.

To test the power of a sale, they send two versions of the catalog to people all over the country.

In one version, they listed a specific product at full price and in the other they said the product was part of the “Pre-Season SALE.”

However, in reality, the price was exactly same in both versions of the catalog.

The only difference was that in one version it was listed as a sale price and in the other it was not.

In the end, they found that just by saying the product was on sale increased sales by more than 50 percent!

The Size of the Discount Matters

In “Contagious: Why Things Catch On,” Dr. Berger uses an example of two stores selling the same grill to illustrate how the size of the discount can be more important than the final price that the item is sold for.

As he explains, the store in scenario A lists the original price of the grill as $350, but sells it at a sale price of $250.

On the other hand, the store in scenario B lists the same grill at an original price of $255, but sells it at a sale price of $240.

When Dr. Berger asked 100 different people to evaluate each scenario, he found that 75 percent of people who were given scenario A said that they would purchase the grill, but only 22 percent of people given scenario B would make the purchase.

In scenario A, the sale price is $100 less than the original price. In scenario B, the sale price is only $15 less than the original.

However, remember that in each case the grill is exactly the same, but the final price in the second scenario is actually less than the first.

In this case, it was the size of the discount, not the actual final price that got people to say that they would make a purchase!

How the Discount Is Stated Matters (The Rule of 100)

In the book, Dr. Berger also highlights the fact that the original price will determine whether to list a sale in terms of a percentage off or an actual dollar value.

“Researchers find that whether a discount seems larger as money or percentage off depends on the original price,” writes Dr. Berger. “For low-priced products, like books or groceries, price reductions seem more significant when they are framed in percentage terms. Twenty percent off that $25 shirt seems like a better deal than $5 off. For high-priced products, however, the opposite is true. For things like laptops or other big-ticket items, framing price reductions in dollar terms (rather than percentage terms) makes them seem like a better offer. The laptop seems like a better deal when it is $200 off rather than 10 percent off.”

Dr. Berger goes on to explain that a good rule to follow is that if the product’s price is less than $100, then a percentage discount seems like a better deal. On the other hand, if the price of the product is more than $100, a discount expressed in the number of dollars off is a better way to go.

Full-Priced Items Can Make Other Products Sell Faster

Remember those full-priced items that I mentioned earlier in the post.

The fact that a store sells them can actually help increase the sales of the mid-range items that it sells.

In “Brainfluence: 100 Ways to Persuade and Convince Consumers with Neuromarketing,” Roger Dooley highlights the fact that selling high-end items increases the likelihood that people will buy products that are considered the next best option.

As Dooley points out, “A Standford University experiment had a group of consumers choose between two cameras, one more full-featured than the other. A second group chose from a selection of three cameras, which had the other two cameras plus one even higher-end model.”

“The first group split their purchase about 50/50 between the two models,” writes Dooley. “But, in the second group, fewer of the cheapest unit sold while more of the second camera sold. Adding the very expensive model made the second camera look like a reasonable compromise.”

Therefore, adding high-end items that sell at full-price can be a good choice for retailers. If the full-price items sell… great. But, if not, they might help increase the sales of the mid-level products sold at the retail store.

Keep in mind, this only works if customers see all the options available to them.

Therefore, it is not surprising that in many brick-and-mortar retail stores, people have to walk past the really high-priced items to get to the other options available to them. This makes the other items seem like a bargain in comparison.

A similar thing could be done on a website by listing other options available when customers search for specific products. The great part of an online store is that retailers can easily do A/B tests to see what website design converts the best.

Final Thoughts

In his book, Dr. Berger explains how the price of products and services influence sales. His book includes an explanation of Prospect Theory and how it can be used to explain why the store that sells a product at the lowest price doesn’t always sell it at a higher rate than other retailers in the area.

Roger Dooley’s book also highlights how price can influence sales in several different ways.

Both books offer lessons that retailers can use both in their brick-and-mortar stores and online.

In the end, it is important to keep in mind that people don’t always act the way that we would predict that they would.

Therefore, we need to test different options in an effort to find the underlying reasons why people do or do not buy products.

This will allow retailers to modify the shopping environment in an effort to increase the number of conversions and ultimately improve the bottom line.

Photo credit: William Murphy on Flickr.

Chad Thiele

Marketing analyst and strategist, content curator, applied sociologist, proud UW-Madison alumnus, and an Auburn-trained mobile marketer. My goal is to help businesses identify trends that will help them achieve their marketing objectives and business goals. I'm currently looking for my next career challenge. Please feel free to contact me anytime at: chadjthiele@gmail.com.

More Posts

Macy’s Is Moving Toward the Future of Retail With RFID and Artificial Intelligence

Photo credit: Warren B. on Flickr.Macy’s is once again leading the charge into the future of retail.

Earlier this year, Macy’s announced that it was expanding its use of item-level RFID technology to increase the accuracy of its inventory management system, thus making it easier for the retailer to sell more items both in its brick-and-mortar stores and online.

Recently, Macy’s announced that it is also experimenting with Artificial Intelligence (AI) in an online mobile web tool.

At first glance, these two initiatives seem unrelated.

However, if you look at them more closely, Macy’s is laying the groundwork for something much bigger.

Using AI to Help Choose the Right Outfit

Several news articles explain how Macy’s has started experimenting with AI.

While the retailer most likely has a long-term vision, it looks like the it is starting out with few expectations and is willing to let customers guide their future decisions.

As an article in the Washington Post points out, “Macy’s announced Wednesday that it has teamed up with IBM Watson to use artificial intelligence as a customer service tool in 10 of its stores.  The retailer dubbed the pilot program “Macy’s On Call,” and it will allow customers to type in questions on their phones and receive answers. Unlike some chatbots that can only regurgitate preprogrammed responses based on keywords, IBM Watson will learn over time to give better answers that are customized to individual stores.”

The article states that the retailer is expecting customers to ask where specific merchandise is located, where to find the restrooms, and other similar questions.

However, customers inevitably will ask tougher questions than that.

And, if the AI works as some people hope, the app will give the retailer a way to offer customers a recommendation engine that will help them make purchase decisions and offer additional product suggestions in the same way that Amazon already does.

In fact, other retailers have already started to use AI in this way.

“Macy’s is not the only retailer that is experimenting with some use of artificial intelligence,” Sarah Halzack points out in the Washington Post article. “IBM Watson has already dabbled in using its tools to power other shopping experiences such as a collaboration with outdoor apparel brand North Face on a website that helps shoppers find the right jacket. Users can type in natural-language answers to a host of questions, including “Where and when will you be using this jacket?” and “What activity will you be doing?” Based on the customer’s answers, IBM Watson will serve up some suggested outerwear.”

The Importance of an Accurate Inventory Management System

As I mentioned earlier, in January Macy’s announced its “Pick to the Last Unit” program for fulfillment of customer purchases.

This initiative uses item-level RFID technology to ensure that the retailer’s inventory is extremely accurate.

While the store hasn’t suggested that the new AI fueled “Macy’s on Call” mobile web tool will be tied to the inventory management system, this would be the logical next step.

If combined, sometime in the not so distant future when a customer asks to receive style advice using the new mobile web tool, he or she would not only receive recommendations based on the items that the retailer has for sale, but would also get information about whether or not the products are available at a particular location, at a nearby Macy’s, or if they are only available online.

These are things that sales associates can usually provide. However, when this information is provided to customers on their smartphone, it could save them a lot of time and lead to increased customer satisfaction and more sales.

And, given the fact that the mobile web tool could be used anywhere, this could be another way for Macy’s to capture sales that might end up going to a competitor.

Again, as far as I know, Macy’s hasn’t announced that the mobile web tool will be able to provide this sort of information. However, they already do offer customers the option to buy some items online or in app, and pick up them up in store.

While integrating the inventory management system with the AI mobile web tool might not seem like a big deal, I think a seemless integration of the possible AI recommendations and the ability to tell customers exactly where to find the items it recommends is extremely important.

Hopefully, this is something that Macy’s is planning. I also hope other retailers try similar things.

AI Won’t Replace the Store Associate

Some people wonder why Macy’s is investing in AI when they could have their store associates answer these questions.

And, the reality is that they already do.

However, as studies have shown, many people would prefer to look the information up on their smartphone rather than interact with a sales associate.

This doesn’t mean that the smartphone will replace all store associates, as some people still prefer to have a one-on-one interaction with a real human being. (Note: There is a grocery store in Sweden that has eliminated the need for customer service staff. However, this probably won’t be a common practice for the foreseeable future.)

Furthermore, having sales staff on the sales floor not only helps the store provide better customer service, but they also help decrease theft at the store.

That said, the real reason that Macy’s is experimenting with AI probably has to do with choice.

As Jeff Hasen, founder of Gotta Mobilize, often points out, giving customers the ability to shop and find information in the way that they want to is extremely important.

Final Thoughts

AI won’t replace the store associate.

What it will do is provide customers who want to find information on their smartphones the ability to do so.

And, choice is good.

Therefore, Macy’s is smart to experiment with AI.

In the beginning, there is a good chance that it will be a little bit clunky. However, if the AI learns as experts say it will, the app will get better and more useful as time goes on.

As I also pointed out, the fact that Macy’s has already improved the accuracy of its inventory management system is important.

After all, what good are product recommendations if customer are disappointed each time they go to the specific department to find the item that was suggested only to find that it is out of stock.

Keep in mind, although several articles have suggested it, it is not clear if Macy’s plans to use AI in the specific way that I am suggesting. However, other retailers have started to experiment with AI in this way, and it would be the logical next step in an effort to compete with competitors both large and small, including Amazon.

If you look at it closely, Macy’s is slowly adding new uses of technology in an effort to help improve the shopping experience it offers its customers.

Each new improvement that the retailer makes brings us closer to a retail shopping experience that would have been considered science fiction only a few years ago.

Photo credit: Warren B. on Flickr.

Chad Thiele

Marketing analyst and strategist, content curator, applied sociologist, proud UW-Madison alumnus, and an Auburn-trained mobile marketer. My goal is to help businesses identify trends that will help them achieve their marketing objectives and business goals. I'm currently looking for my next career challenge. Please feel free to contact me anytime at: chadjthiele@gmail.com.

More Posts

Low- or No-Tech Solutions for Retail Loss Prevention

Photo credit: Alan Cleaver on Flickr.While the estimates vary by source, the fact is retailers lose a lot of money each year as a result of theft.

According to one source, United States retailers are losing $60 billion a year due to shrinkage. That is billion with a “B”.

This estimate was cited in a Forbes article and was based the US Retail Fraud Survey – 2015 from Retail Knowledge. According to this report, employee theft is the biggest problem. However, non-employee theft also contributes to the overall figure.

As many retailers are already aware, thieves are walking through their doors each and every day.

Knowing this, retailers need to find ways to mitigate their losses while maintaining a welcoming atmosphere for honest, law-abiding customers.

While not a comprehensive list, a few of the specific suggestions that experts provide are listed below.

Welcome to the Store – The Importance of a Store Greeter

It is not surprising that the first suggestion listed in the Forbes article mentioned above is to have an employee greet customers as they enter the store.

This is a practice that is common in many retail stores.

According to the authors of the Introduction to Criminal Justice: A Balanced Approach, Retail security experts have noted that this person is not just a greeter. He or she is in a position to prevent shoplifting. In particular, it is believed that the greeter sends a message to shoppers that they have been recognized and that if they think about stealing, someone has seen them in the store.”

With this in mind, it is not surprising that Walmart is bringing back greeters to combat their shrinkage problems.

Customer Service as a Way to Reduce Theft

As pointed out on Wikipedia, “The vast majority of thieves have one thing in common, they will steal only if they have the opportunity. So theft prevention is fairly easy. Constant and great customer service will eliminate most opportunity to steal.”

“80% of customers who steal merchandise are opportunists and do not walk in to the store with the intent to steal,” the contributor to Wikipedia states. “They find that one thing they did not expect to find, cannot afford to pay for it, and will steal it if they have the opportunity.”

Just Look at Yourself – Using Mirrors as a Way to Reduce Theft

As I pointed out in a post back in 2012, “Mirrors are important sales tools for retailers. Not only do they help people visualize how an item will look on them before they make the purchase, but strategically placed mirrors might also be an effective way to reduce theft by shoppers and employees, alike.

In the post, I cited information found in Brainfluence: 100 Ways to Persuade and Convince Consumers with Neuromarketing by Roger Dooley.

“When we look in a mirror, our behavior is actually altered – at least for a short period of time,” writes Dooley in the book.

Dooley supports this statement with past research that suggests that by seeing their own image, people are more likely to think about their behavior and act in a more socially desirable way.

Reducing Credit Card and Debit Card Fraud

In the Forbes article mentioned above, Paul Hunter, President and CEO of Sterling Payment Technologies, gives some tips to reduce credit card and debit card fraud.

“Be sure to check that the customer’s signature on the receipt matches the signature on the back of their card,” Hunter is quoted as saying. “This will verify that the cardholder is, in fact, the card owner. If there is no signature on their card, ask for ID. Additionally, ask for a customer’s ID if the amount of the transaction is larger than your average transaction size. This policy has already been implemented at many of our nation’s largest retailers. You should also implement payment solutions that include ‘point-to-point’ encryption in addition to EMV. Point-to-point encryption further reduces the possibility that card numbers can be determined if a transaction request is intercepted. Finally, when a customer’s card is processed through the card reader, make sure that last four digits of the card number that print on the receipt match the last four digits embossed on the front of the card. Some POS systems will prompt the cashier to re-enter those digits from the card to make sure they agree with the value obtained from the card reader.”

Final Thoughts

Theft is a huge problem for retailers in the United States.

Therefore, no matter whether they are large or small, retailers need to find ways to mitigate their losses while providing a shopping environment that is welcoming to their law-abiding customers.

There are some basic things that retailers can do to reduce theft.

As the examples listed in this post show, some of the most important things that retailers can do involve having employees available who provide great customer service.

This will not only help reduce shrinkage, but should also help the retailer achieve some of the other goals that they have, including the most important, selling more products.

Photo credit: Alan Cleaver on Flickr.

Chad Thiele

Marketing analyst and strategist, content curator, applied sociologist, proud UW-Madison alumnus, and an Auburn-trained mobile marketer. My goal is to help businesses identify trends that will help them achieve their marketing objectives and business goals. I'm currently looking for my next career challenge. Please feel free to contact me anytime at: chadjthiele@gmail.com.

More Posts

Added to the Watch List: Dynamic Pricing in Brick-and-Mortar Stores

Photo credit: Thomas Altfather Good on Flickr.Price, along with product, promotion, and place is one of the parts of marketing that E. Jerome McCarthy included on the list four P’s that he used when he expanded on what Neil Borden coined as the “Marketing Mix.”

While it is a very important part of marketing, price is something that I just haven’t focused on.

However, a recent article written by Bryan Eisenberg has me extremely intrigued.

In the post, Eisenberg recommends that brick-and-mortar retailers find ways to innovate or be left behind.

But, it was one paragraph, in particular, that really got me thinking.

“Omni-channel retail needs new leaders with an entrepreneur’s vision to thrive amongst the chaos and jump ahead of the curve,” writes Eisenberg. “We need bold experimentation in the brick & mortar channel. It’s not enough to give your associates mobile devices to enable checkout from anywhere in the store. Apple has been doing that for years. Take a look at what jewelry retailer Blue Nile has done at first with their test kiosks and now with their first successful brick-and-mortar “web room.”  Have you seen Amazon’s first store? There are no prices on the shelves. They’ll leverage people’s own devices to offer dynamic pricing. Will you?”

It was the last part that jumped out at me.

While it might not seem like much to some people, if other stores follow Amazon’s lead, I think that we can look forward to some huge changes in how retailers price their products and services in order to compete with the stores around the corner and the ones customers have access to via their computers and mobile devices.

It’s Nothing New Online—But Could Be a Huge Deal in a Brick-and-Mortar Retail Store

According to Wikipedia, “Dynamic pricing, also referred to as surge pricing or demand pricing, is a pricing strategy in which businesses set flexible prices for products or services based on current market demands. Business are able to change prices based on algorithms that take into account competitor pricing, supply and demand, and other external factors in the market.”

“The concept of dynamic pricing has been around for many years, particularly in the airline and hotel industries, but retail is one of the newer industries to adopt this pricing strategy, and it’s growing rapidly,” the Wikipedia page points out. “Many believe dynamic pricing will become more relevant in the future of ecommerce.”

A 2012 Wall Street Journal article also points out some of the factors that online retailers use when setting prices online.

“It is difficult for online shoppers to know why, or even if, they are being offered different deals from other people,” the authors of the Wall Street Journal article write. “Many sites switch prices at lightning speed in response to competitors’ offerings and other factors, a practice known as “dynamic pricing.” Other sites test different prices but do so without regard to the buyer’s characteristics.”

In the example listed in the article, Staples.com used the distance that a person was located from a competitor’s brick-and-mortar store as one of the factors it used to adjust the prices for the items it sold online.

However, this is the online store where prices can be changed with only a few clicks.

Before smartphones, this type of change would have been extremely difficult in brick-and-mortar stores.

Sure, most retail stores have sales that change the prices of the items that they sell, maybe even daily.

And, they could offer coupons via the paper or even email to certain customers. So they do have the ability to target certain customers to entice them to buy by offering discounted prices.

But, the smartphone and the data that retailers now have can give them the ability to target customers and change prices with a much faster turnaround time, possibly even in real time.

This could be a game changer.

Final Thoughts

As I mentioned earlier, pricing strategy is not my area of expertise.

So, there isn’t much more that I can add to the discussion.

That said, it is easy to recognize that having the ability to determine if price will have an effect on a sale and make a price adjustment when a customer is most likely to buy from the store (i.e., when they are actually in the brick-and-mortar store) can and will have a huge impact on sales.

That’s why I plan to watch what retailers do and monitor advancements in the technologies that they use to adjust prices that they offer to customers online and in brick-and-mortar stores using the data collected from customers’ smartphones.

And, it is probably a good idea if retailers do the same.

Photo credit: Thomas Altfather Good on Flickr.

Chad Thiele

Marketing analyst and strategist, content curator, applied sociologist, proud UW-Madison alumnus, and an Auburn-trained mobile marketer. My goal is to help businesses identify trends that will help them achieve their marketing objectives and business goals. I'm currently looking for my next career challenge. Please feel free to contact me anytime at: chadjthiele@gmail.com.

More Posts

Showrooming, Webrooming, and the New Reality of Omni-Channel Retail

Photo credit: Jason Howie on Flickr.A few years ago, some retail experts speculated that mobile phones and online retailers would put many brick-and-mortar stores out of business.

They thought that these brick-and-mortar stores would become nothing more than showrooms where customers would go to check out and try on merchandise, only to purchase the items online at a better price. Thus, brick-and-mortar stores would become less profitable, forcing some to shutter their doors.

Fast forward a few years and we now know that brick-and-mortar stores are not going anywhere anytime soon. In fact, it is estimated that over 90% of current retail sales still take place in a brick-and-mortar store.

As I have pointed out in the past, Forrester Research predicts that online sales will rise in the next 10 to 15 years to as much as 25 percent of total sales. However, that means 75% of retail sales will still take place in a brick-and-mortar store.

While the prediction of the demise of the brick-and-mortar store was premature, changes in the way that many customers shop often resembles the definition of showrooming, or at least a slight variation of it.

Therefore, even though many sales still take place in a brick-and-mortar store, retailers can’t rest on their laurels.

What Is Showrooming and Webrooming?

According to Wikipedia, “Showrooming is the practice of examining merchandise in a traditional brick-and-mortar retail store or other offline setting, and then buying it online, sometimes at a lower price. Online stores often offer lower prices than their brick-and-mortar counterparts because they do not have the same overhead cost.”

“The reverse phenomenon is webrooming,” says Wikipedia. “In webrooming customers research a product online and buy in a store.”

A Broader Definition of Showrooming

In his book, “Mobile Infuence: The New Power of the Consumer,” Chuck Martin, author and CEO of the Mobile Future Institute, examines showrooming and its effect on retail.

In the book, Martin highlights the results of a 2012 study conducted by ForeSee.

This study provided insights that slightly change the way that we look at showrooming.

“Many retailers that focus on dealing with showrooming, discussed in an earlier chapter, tend to view it as an in-store-only phenomenon,” writes Martin in his book. “A key finding in the ForeSee study is that a large percentage of the mobile usage related to retail is being done at home while preparing to visit a store. This is precisely the pre-buy phase of mobile influence. This means that the actual showrooming may not be as significant in scope at the physical store, since the activity of shopping via mobile is not location-dependent. It can be done anywhere.”

Larry Freed, president and CEO of ForeSee is quoted as saying, “Showrooming is happening, but it’s not happening at breakneck speed. Retailers need to be aware of it but realize it’s just another method of competitiveness.”

In a post on the K3 Retail blog, Chris Donnelly, head of global retail practice at Accenture, is quoted as saying, “The first thing I’d note is that retailers have been showrooms for centuries… If you can’t close the deal when someone is in your store looking to buy, then shame on you. But that aside, what we’re actually finding is that the trend is increasingly the inverse. We call this ‘webrooming’, where a product is researched at home, then consumers go into the store to buy… Yes, online is the side of retail growing the most in the next five years, and we expect 10 to 20 per cent of sales to be online. But that means 80 to 90 per cent are still occurring in-store.”

According to the K3 Retail post, “Research by Accenture found that 73% of shoppers engaged in “showrooming”, while 88% of consumers used “webrooming” as a shopping strategy.”

The New Reality of Omni-Channel Retail

Study after study is proving that customers are researching the products and services that they intend to buy through multiple channels. This includes at a brick-and-mortar store, on a desktop computer, on a smartphone or tablet, via the telephone, in mobile apps, and in any other way imaginable.

And, while most sales are taking place in brick-and-mortar stores, customers do buy products via other shopping channels.

Therefore, because customers can now research products at any time that is convenient to them and are using multiple channels to do it, every transaction that includes an interaction with the customer in a brick-and-mortar store and an online or mobile store has the potential to be classified as an instance of showrooming or webrooming. The only difference is when and if the retailer closes the sale.

To complicate this further, a customer in a brick-and-mortar store could check out merchandise at one brick-and-mortar store, research prices online, and then go to another brick-and-mortar store to buy the item because the other store is selling the product for less.

Is this showrooming? It could be classified that way.

However, who really cares about how we label it?

The reality is that retailers shouldn’t care if their customers buy from them in a brick-and-mortar store or if they buy from them online. What they need to worry about is whether or not customers are buying from them or if they are buying from the competition.

Therefore, they should be making sure that they are offering the best possible shopping experience to their customers at every touch point and giving them the ability to purchase the product quickly and conveniently from wherever and whenever the customer wants to.

Final Thoughts

Retailers should be worried about showrooming and webrooming.

But, not because they care about how the customer is buying from them.

It shouldn’t be a battle between brick-and-mortar stores and online retailers. The real competition is the other retailer, not the medium or channel that customers are using to interact with the store.

As Brian Eisenberg, chief marketing officer at IdealSpot, is quoted as saying in an Click Z article, “Retail doesn’t exist without an online component and online retail isn’t as cost-effective if you don’t have a brick-and-mortar component. We’re connected all the time through the phones in our pockets, but we live in a physical world.”

Therefore, retailers should offer customers a consistent and seamless shopping experience across all shopping channels, from the brick-and-mortar store to the online and mobile store and everything in-between.

They need to optimize for conversion and customer experience in every channel so that the store is the best place to shop no matter how or when the customer wants to.

By focusing on what customers need and creating a better shopping experience than the competition everywhere customers shop will eliminate the need to worry about showrooming, webrooming, or whatever you want to call it.

Photo credit: Jason Howie on Flickr.

Chad Thiele

Marketing analyst and strategist, content curator, applied sociologist, proud UW-Madison alumnus, and an Auburn-trained mobile marketer. My goal is to help businesses identify trends that will help them achieve their marketing objectives and business goals. I'm currently looking for my next career challenge. Please feel free to contact me anytime at: chadjthiele@gmail.com.

More Posts

Customers Love Coupons, but Hate the Fine Print

Photo credit: torbakhopper on Flickr.There is a lot of evidence out there that coupons help drive sales.

This is partially due to the fact that customers like coupons.

In fact, I’d even go as far as to say that customers love coupons. They love to receive them and the love to use them.

This is supported by a 2014 study that was conducted by Forrester Research on behalf of RetailMeNot.

According to an article on marketingcharts.com that cites this study, “Some 68% of respondents agreed (top-2 on a 5-point scale) that they are likely to tell a friend about a company that uses online coupons or promotion codes, and an equal 68% agreed that they are more likely to be loyal to a brand that offers online coupons or promotion codes. Lest that loyalty be to price rather than brand, the survey also indicates that half are more likely to buy a product or service at full price later from a company that offers online coupons or promotion codes.”

And, while the percentages vary, most sources indicate that nearly all consumers will use coupons at least once in a while.

Furthermore, according to a press release found on Quotient.com, research conducted by GfK on behalf of Coupons.com found that, “heavy digital coupon users shop 47 percent more often than the average shopper, spending $6,081 annually on groceries and household goods alone — an incredible 114 percent more than the national average.”

Research has even found that coupons make customers happier.

However, while customers do love coupons and even expect retailers to offer them, there is one aspect of a coupon that can provoke ire in even the most loyal customer.

It’s in the Fine Print

If you ask any retail employee, they could no doubt list a countless number of times when customers were happy with the savings that coupons provide.

On the other hand, they could also point out the many times when customers left dissatisfied with the store because they found out that the items that they intended to purchase were excluded. And, the only way to find that out was to read the fine print. Which, by the way, they probably didn’t do, so they brought the items to the register and were forced to pay full price or abandon the purchase.

Matt Brownell, consumer and retail reporter for DailyFinance.com, summarized the frustrations that many consumers have in a 2013 post.

In the post, he states, “When retailers run sales and coupons, they include fine print that limits what the deal actually applies to. In most cases, it’s relatively harmless — it defines the effective dates of the promotion, and may exclude select items like gift cards and jewelry.”

“But problems arise when retailers go totally overboard and try to exclude half the store,” he continues. “Department stores like Sears (SHLD) and Macy’s (M) tend to hold sales that exclude dozens of brands from the discount, and earlier this year Guitar Center took some heat for a coupon that excluded more than 300 brands.”

He goes on to say, “Sure, in a perfect world everyone would read and understand the fine print. But it’s not unreasonable for someone to see ‘20 percent off everything’ and assume that it applies to most of the merchandise in the store.”

And, he’s not the only one to point this out.

Here are some of the tweets that I found posted on Twitter in the last few months.

If these people got mad enough to vent their frustration on Twitter, it is more than likely that there are countless others who just walk away feeling a little less satisfied with the store.

Some businesses have acknowledged the frustration that customers have with the fine print by adding a little humor.

It’s Not Always the Retailer that Is to Blame

A 2015 article by John Matarese for WCPO in Cincinnati also highlights the frustrations that consumers can experience when trying to use coupons.

As he points out in the article, “Perhaps it would be easiest if the coupons simply listed the brands where you can use them.”

However, he also lets retailers, in this case Dick’s Sporting Goods, defend themselves.

According the article, Dicks explained that “manufacturers, not the store, make the rules, and typically do not allow markdowns on current season merchandise.”

Nevertheless, most customers don’t know this and it is the retailer, not the brand, that often takes the hit in customer satisfaction, trust, and brand loyalty.

Final Thoughts

Customers love coupons.

Research has shown that not only do they drive sales and lead to increased brand loyalty, but they could also lead to future sales for full-price items. Researchers have also found that customers who are heavy digital coupon users shop more than the average shopper does.

Therefore, there is no question that coupons are good for business.

However, retailers need to keep in mind that when they offer a coupon that excludes too many of the brands that shoppers really want, it can backfire and actually harm the store’s reputation.

Photo credit: torbakhopper on Flickr.

Chad Thiele

Marketing analyst and strategist, content curator, applied sociologist, proud UW-Madison alumnus, and an Auburn-trained mobile marketer. My goal is to help businesses identify trends that will help them achieve their marketing objectives and business goals. I'm currently looking for my next career challenge. Please feel free to contact me anytime at: chadjthiele@gmail.com.

More Posts

User-Generated Content Is Fuel for Recommendation Engines

Photo credit: Andri Koolme on Flickr.By now, most business leaders have heard that word-of-mouth recommendations from friends and family play a large role in the decision making process for many consumers.

With this in mind, many of these same business leaders have also accepted that social media should be leveraged, and have thus established a presence on the most-used social networking sites. Many have even gone the extra mile and actually engage with their customers on these sites.

But, what is often most important is what customers do and say online.

The beautiful product photos, positive reviews, and check-ins that customers post spread awareness about the businesses, products, and services that they use and hopefully like.

What they also do is leave a permanent record of a positive (or negative) interaction that a customer had with a brand.

As you know, if it is posted on the Internet, it can possibly live on forever.

What we don’t often think about is that these posts can lead to future sales by helping recommendations engines provide more targeted and accurate suggestions to future customers.

What is a recommendation engine?

In the context of what I am referring to, it is an information filtering system that helps a business recommend items to customers that they might be interested in. For additional information, Wikipedia has a good explanation.

If you want to see an example of a business effectively using a recommendation engine to help its customers find products, visit Amazon.com. The Amazon.com recommendation engine uses a combination of several input data, including past purchases, product ratings, and social media data.

Social Networking Sites Offer Suggestions

Several social networking sites understand that the data that they collect can be very useful and have harnessed it to offer recommendations to users directly within the site.

Foursquare is a great example.

In his book, “Mobile Influence: The New Power of the Consumer,” Chuck Martin describes how Foursquare is using its data to offer better suggestions to its users.

In the book, Eric Friedman, director of sales and revenue operations at Foursquare, states, “From the very first check-in, we get smarter at what we recommend. If you check in to a series of places, we will make a better guess at what you are looking for. If you love small coffee shops and you go to a city and type in ‘coffee shop,’ guess what we are going to recommend? A small, independent coffee shop. If you are a guy that loves a big coffee house and you go to a different city or country and type in ‘coffee,’ we are going to give you recommendations based on your history. If we were friends on Foursquare and I was in downtown Boston and I saw Chuck had been to a cheeseburger place five times, that is a great signal for me to go to the same place for lunch because I know Chuck and he knows good cheeseburger places and I like Chuck.”

The book goes on to explain other ways that Foursquare is using its app and the data it collects to give its users targeted and relevant suggestions based on their location, past check in history, and the check in history of the people who they are connected to.

If you want another example, check out Yelp.

As you are probably aware, Yelp is an online review site that allows users to review businesses that have a brick-and-mortar location. This data can be used directly within the site to find a specific type of business based on its location and the reviews that it gets from Yelp’s users.

Yelp has an algorithm that that helps surface the most trusted reviews from the most reliable sources.

It is also noteworthy that Yelp reviews often show up in the results that users get when they search for information on Google.

Every Post on a Social Networking Site Could Potentially Be a Source of Data

The examples that I gave demonstrated how social media can be used to help users find businesses based on data collected within the social networking site itself.

However, everything that users post on social networking sites can be used by a third party to help consumers make purchase decisions. (As mentioned, Yelp reviews show up in Google SERPs.)

To illustrate this further, think about all the photos of the delicious meals that users post on Instagram.

A photo posted by Chad Thiele (@chadjthiele) on

Knowing that people often post photos of their food, the app MyFab5 encourages users to use these Instagram photos to rank the five best places for a specific type of food in a specific city.

The concept is rather simple (i.e., use food photos to rank the five best places for a specific type of food in a specific city.) The app then uses an algorithm to surface the best places to get a specific type of food based on users rankings. For example, according to MyFab5, here is a list of the best places for burgers in Minneapolis, Minnesota.

While this data again leads back to a brick-and-mortar location, it shows that anything that users post is fair game.

Given the vast amount of data out there, there will be other businesses that will harness other types of user-generated content to help make recommendations to other consumers based on hashtags, keywords, geotags, or other data that are included in posts on social networking sites.

Therefore, it is important that businesses find ways to ensure that these recommendation engines find more positive posts than negative ones.

Final Thoughts

As I have pointed out, the product photos, reviews, check-ins, and other posts on social networking sites not only work to influence the people who are connected to the users who create the content, but they also can have a larger impact on future sales when they are used to fuel recommendation engines.

So what can businesses do to help encourage customers to create user-generated content that displays the brand in a positive light?

The answer to that question depends on the situation.

However, the most important thing is to provide great products and services to customers.

Providing excellent customer service is also key.

In the end, businesses not only want customers to use their products and services, but they want the experience that they have with the brand to be positive. So positive that customers can’t help but share the love of the brand online.

Because what is posted online can live on forever and we can’t predict how other businesses will use that data in the future.

Photo credit: Andri Koolme on Flickr and chadjthiele on Instagram.

Chad Thiele

Marketing analyst and strategist, content curator, applied sociologist, proud UW-Madison alumnus, and an Auburn-trained mobile marketer. My goal is to help businesses identify trends that will help them achieve their marketing objectives and business goals. I'm currently looking for my next career challenge. Please feel free to contact me anytime at: chadjthiele@gmail.com.

More Posts

Local Inventory Ads: A Key Ingredient for Mobile Marketing Success (Case Study)

Photo credit: RubyGoes on Flickr.In the short term, having the ability to confidently tell a customer that you have the exact product in stock at a nearby brick-and-mortar store directly within a mobile ad or even on your website is going to give retailers a huge competitive advantage. However, before you know it, this level of information is going to become table stakes.

While there are a lot of obstacles that retailers need to overcome to provide accurate inventory data for their brick-and-mortar stores, it is important that they start to work through this problem.

As a case study mentioned in an article on the think with Google blog proves, this type of information will help drive traffic into stores.

And, I believe there will be many more case studies like this in the not so distant future.

Local Inventory Ads Drive Shoppers into Stores

The case study mentioned earlier shows that local inventory ads can be very effective.

As the original article on the think with Google blog states, “With over 1,200 physical stores across the country, Sears Hometown and Outlet Stores has embraced Google local inventory ads (LIAs) to bring nearby customers on mobile devices into stores. The results: a 16% higher click-through rate and a 122% higher store visit rate compared with online PLAs.”

The article also points out that Sears Hometown and Outlet Stores local inventory ads yielded return on ad spend (ROAS) higher than other offline marketing.

In fact, in the article David Buckley, CMO of Sears Hometown and Outlets stores, states, “When we compared our most recent performance of local inventory ads with offline media typically used to drive store sales, such as a recent broadcast television campaign, local inventory ads returned in-store sales at more than 5X the rate of TV advertising for each dollar spent.”

Buckley is also quoted as saying, “We’ve been closely monitoring the performance of local inventory ads and our most recent analysis points to more than $8 of in-store sales for each dollar invested.”

Not bad.

Giving Customers the Information They Need

“If people are searching for a product on their phones, there is nothing more targeted than serving that item with a picture, description, and price while letting the customers know exactly how far they are located from the product,” Buckley adds.

In my opinion, I think that he is understating the significance of being able to give customers the knowledge that the product that they are looking for will be found at a specific brick-and-mortar store.

In fact, I think that the knowledge that the item will be in stock could be more important than price in some cases. As the adage goes, “time is money.”

The importance of letting customers know that an item is available at a nearby store is confirmed by a finding in a report, titled “Digital Impact on In-Store Shopping: Research Debunks Common Myths October 2014.”

According to the report, “Search results are a powerful way to drive consumers to stores. Providing local information, such as item availability at a nearby store or local store hours, fills in information gaps that are keeping consumers away from stores.”

In fact, the report goes on to point out that, “1 in 4 consumers who avoid stores do so because of limited awareness of nearby stores or the risk of items not being available.”

While the report is now over a year old, it has a lot of insights that retailers could find useful.

Final Thoughts

The more information that a retailer can give customers before they make the trip to the brick-and-mortar store, the better.

As the case study on the think with Google blog points out, providing item availability information to customers who are near a particular brick-and-mortar store helps increase the effectiveness of a mobile ad.

Keep in mind that it is important to make sure that the information that retailers provide to customers is accurate, because if a customer is told that the item will be available only to find out that it is sold out when they get to the store could potentially damage the credibility and trust that the customer has in the store.

While there are obstacles that retailers need to overcome to be able to provide accurate inventory data to customers online, it is something that they should be working on.

I think that being able to provide this type of information to customers could be more important than even the think with Google article leads the reader to be believe.

And, it is only going to be more important as time goes on.

Photo credit: RubyGoes on Flickr.

Chad Thiele

Marketing analyst and strategist, content curator, applied sociologist, proud UW-Madison alumnus, and an Auburn-trained mobile marketer. My goal is to help businesses identify trends that will help them achieve their marketing objectives and business goals. I'm currently looking for my next career challenge. Please feel free to contact me anytime at: chadjthiele@gmail.com.

More Posts

Sometimes It’s What a Brand Doesn’t Do That Loses the Sale

Photo credit: Ron Bennetts on Flickr.In almost every instance where a business is trying to sell a product or service, it takes multiple positive interactions before a prospect becomes a paying customer.

The average number of positive interactions, or touches at various touchpoints, required typically varies by the type of product or service being sold.

Furthermore, while multiple positive interactions with a brand can lead to a sale, the reality is that negative interactions can also prevent a sale from taking place.

Sometimes it is something that the brand has no control over that causes a prospect to choose the competitor’s product or service.

There are some things that can be done to combat this problem. However, it does require some effort.

To illustrate this point, I am once again going to use my recent smartphone purchase as an example.

The Incumbents: Motorola and Verizon Wireless

I have been a loyal Verizon Wireless customer since I moved to Louisiana back in 2006.

When I moved there, I asked some of the local residents what provider they recommended since U.S. Cellular wasn’t an option in the area, at least at that time.

Nearly everyone who I talked to suggested Verizon Wireless, because they felt that Verizon Wireless had done the best job getting service restored after hurricane’s Katrina and Rita.

I took the advice of the residents of Louisiana and 10 years and two states later, I am still a customer.

As for the device, I think that all the cellular phones that I have owned up until this year were Motorola phones. (Some of my earliest cellular phones might have been made by Nokia, but I am not sure.)

Something that I am absolutely sure of is that the phone that I purchased when I move to Louisiana was a Motorola, as were my first two smartphones. And, my satisfaction with the brand was extremely high.

That was, until Motorola and its parent company, Lenovo, announced that they plan to phase out Motorola and only offer the Moto phones.

The Choice: Motorola Droid Turbo 2 or Samsung Galaxy S7 Edge

I was now faced with the option of getting one last Motorola phone or make the inevitable switch to Samsung.

During my initial visit to the Verizon Wireless store, the salespeople who I talked to spoke highly of both phones, but seemed to slightly favor the Samsung Galaxy S7 Edge.

Needless to say, I left the store that day still undecided.

So, I did what many people do and asked for advice on Twitter.

As you can see, the only response that I received was from the Sprint Forward Twitter account.

They recommended the Samsung Galaxy S7.

I then got a promoted tweet from Verizon Wireless offering a free Samsung Gear VR headset with a purchase of a Samsung Galaxy S7 or S7 Edge. (At the time, Best Buy was offering a similar promotion.) (Note: I think that this was the promoted tweet from Verizon Wireless. If it wasn’t, it was very similar.)

That was it, I was almost certain that I would make the switch to Samsung.

I only needed to check out some product reviews from CNET and a few other sources. All of which confirmed that Samsung was the best option available at the time.

The Choice: Sprint or Verizon Wireless

Given my past experience with Verizon Wireless, it was going to take more than a contact on Twitter to get me to switch to Sprint.

That said, if my past experiences with Verizon Wireless hadn’t been so positive, I might have switched to Sprint or even went to Best Buy to purchase the smartphone.

And, Sprint definitely has my attention if for some reason I need to change wireless carriers in the future.

But, Verizon Wireless did offer a good data plan, had a great offer, and has provided excellent customer service—so I remained a customer.

Final Thoughts

Had Motorola reached out on Twitter or if someone would have recommended it, I might have purchased the Motorola Droid Turbo 2, if for no other reason than to get one last Motorola phone. But, nobody did.

And, Motorola already made the decision to phase out the brand that I was loyal to, so it made my decision to switch that much easier.

In this case, the brand lost a loyal customer because of what they did (plan to phase out Motorola phones), what they didn’t do (reach out on social media or anywhere else at right time), and what other people did (recommend the competition.)

In contrast, while Verizon Wireless didn’t reach out this time, they at least did use a promoted tweet to get my attention on Twitter and create awareness of a great offer. And, to their credit, they did reach out to me a few years ago when I wrote a post about how access to high speed wireless data can have an effect on a brand’s mobile marketing campaigns.

But, in reality, it was the fact that they have always provided great customer service in the past that kept me a customer. That, and the fact that their data plans are competitive with the other carriers.

What this example shows is that in the same transaction, one brand kept a loyal customer by providing competitive pricing combined with great customer service, while another lost my business because of what they did, what they didn’t do, and what other people did.

As pointed out, sometimes it is something that the brand has no control over that can have a negative effect on a sale.

With a little foresight, there are things that brands can do to combat this problem and bring in new customers and retain existing ones.

However, it does require some effort.

Photo credit: Ron Bennetts on Flickr.

 

Chad Thiele

Marketing analyst and strategist, content curator, applied sociologist, proud UW-Madison alumnus, and an Auburn-trained mobile marketer. My goal is to help businesses identify trends that will help them achieve their marketing objectives and business goals. I'm currently looking for my next career challenge. Please feel free to contact me anytime at: chadjthiele@gmail.com.

More Posts

Copyright © chadjthiele.com
Every interaction with a consumer IS marketing.

Built on Notes Blog Core
Powered by WordPress