Is It Time for You To Reinvent Your Retail Experience?

Retail is changing.  How consumers research products, shop and buy are changing.  Some of this is due to mobile shopping, some is due to consumers’ ready access to product information online and some is simply due to some retailers cutting back staff – forcing consumers to do their own product information gathering.  And shoppers are becoming better informed – according to a 2012 Motorola Holiday Shopping Study, 61% of retail store managers surveyed said they believe that shoppers are better connected to product information than their in-store associates. 

Given this changing retail world, a question retailers need to answer is:  do you have a strategy and plan for this evolving marketplace and the experience you deliver to your shoppers in store and online?

Mobile shopping is growing – maybe not as fast as some predicted, but it is still growing at a healthy pace.  In 2012, according to eMarketer, $25 billion in purchases were made on phones and tablets – up 81% vs. 2011.  While mobile sales were just 11% of total ecommerce sales, eMarketer predicts this will reach $87 billion by 2016.  According to a recent study from Adobe Systems, 55% of tablet owners use the device for buying products vs. just 28% of smartphone users.  And while, more was spent on tables ($13.9B) vs. phones ($9.9B), shopping on tablets was more likely to be done at home.  According to a 2012 Viacom study, only 36% of tablet owners use their device when shopping in store.

The use of tablets and smartphones as shopping information and purchase devices will continue to evolve and reshape retail as both manufacturers and retailers develop content, apps and better ecommerce tools.  According to the 2013, Shop.org/Forrester Research State of Retailing Online survey, 51% of the retailers surveyed, stated their top priority for 2013 is site optimization, including checkout optimization, user experience, and product detail page enhancements.  Additionally, 43% of retailers surveyed stated that mobile and tablets are among their top three priorities for 2013. 

Different Brick and Mortar retail strategies are evolving – Retailers need to react to this evolving world.  While ecommerce only reach 5.2% of total retail sales in 2012 (source: US Census Bureau), it is growing at 17.7% per year.  Many retailers have concerns about “Showrooming”, where consumers shop at retail and buy online to save money.  Given the rapid growth of ecommerce, retailers appear to be adopting one of four strategies to win shoppers and their purchases in their traditional brick and mortar stores. 

Multi-Channel Retailing – many key retailers, especially the big box stores, are rapidly working to create content-heavy marketing experiences that integrate consumer shopping touch points across stores, retailer websites, social media and email.  Macy’s CEO, Terry Lundgren, refers to their efforts as “Omni-channel” – combining multichannel marketing with new capabilities to fulfill purchases across their system from both fulfillment centers and fulfillment stores.

Multi-channel retailers are working to make sure that in-store shoppers have an easy shopping experience with ready-access to helpful and knowledgeable sales associates.  One retailer in particular working to improve in this area is Best Buy.  Best Buy is a frequent stop for consumer showrooming before buying online.  They are at risk of losing their business if they cannot solve this problem.  Best Buy is working to confront showrooming by creating better in-store experiences that will convert shoppers to buyers.  As Best Buy CEO Hubery Joly put it recently:  “Once customers are in our stores, they’re ours to lose”.  

The key to the multi-channel retail strategy is to offer the right combination of helpful product information, product availability and a good price for the shopper who is ready to buy now.  In stores, this means knowledgeable store associates who can help the shopper find the right products.  Online, it means product selection tools including product reviews, product comparisons, plus upselling and cross selling recommendations to boost total sales.

Experiential Retailing – These retailers have also chosen to give shoppers a great shopping experience, but the path to loyalty has less to do with product information and availability as it does with the experience itself.  These are typically high service retailers that stand out in their category by creating unique and desirable shopping experiences that leaves the shopper wanting to shop in that store again.  While most retailers are looking to enhance their retail experience, there are those who have chosen to create a real difference.  In grocery retailing, smaller retailers like Stew Leonards (CT) and Jungle Jim’s (OH) have created highly unique experiences.  But bigger chains such as Wegmans, Loblaws, and Publix stand out in their experience and service concepts.  Specialty stores such as Starbucks, Sephora, Build-A-Bear and Bass Pro Shops all provide truly unique experiences.  Petco uses puppies and the opportunity to interact with them in store to engage shoppers and create emotional connections. 

The challenge and opportunity for retailers choosing this strategy to identify the key experience activities that combined with store merchandising practices will help them stand apart and engage their shoppers.

Lowest Price – This strategy focuses on the price-driven shopper.  These retailers’ business plan, consumer communication and merchandising are all focused on offering goods at a low price.  The level of sophistication varies from the highly integrated multi-channel marketing efforts of Walmart to the much simpler approach of Dollar Stores.  DSW, Stein Mart and Harbor Freight Tools are examples of this strategy.  This is not a high-service model.  Staffing is kept low and shoppers often have to discover products and product information on their own.  Shoppers are willing to shop there to save money – trading in service and experience for savings.  The key to this strategy is to consistently deliver great prices.  These retailers will successfully compete with other business models by continuing to offer low prices every day on popular products.

Walmart got in trouble and started losing shoppers when they redesigned their stores and tried to offer upscale fashions in addition to everyday low prices.  They cut back many departments shopped by men to add space to categories that women would shop.  The result is they eliminated thousands of low price SKU’s across many categories – and lost the shoppers who came to Walmart to buy them.  Walmart has since changed their strategy and has been adding back many of the categories and SKU’s they previously dropped.  A renewed focus on offering and communicating low prices across key category has helped them regain shoppers and sales.

Do nothing new – The last group of retailers is noted more for inaction in this new world rather than responding to the changes.  They continue to use the same go-to-market strategies that they have for years rather than choosing one of the three strategies above.  They are losing shoppers to the tech-savvy multi-channel retailers, the much more engaging experiential retailers or the value of the lowest price retailers.  Stuck in the middle without a clear reason for shoppers to go there, their only strategic advantage is often the convenience of a particular store location.  Getting lost in the middle of these winning strategies, these retailers will slowly erode sales and market share.  Examples include Sears/Kmart, Sports Authority, Barnes & Noble and The Gap.

Refine Your Experience

Which of these is the best strategy to win in the evolving world of retailing?  The best strategy is the one that differentiates a retailer and attracts and keeps loyal shoppers.   The first three strategies all offer this opportunity.  The winning opportunity is to embrace one strategy and stick to it to create the shopper experience that keeps your shoppers coming back to your store.

This blog was originally posted by GrowthSpring Group on the MENG Blend website.

GrowthSpring Group is a marketing strategy, market research, and innovation firm focused on accelerating your sales and profit growth. We help you identify new business growth insights & opportunities and execute winning strategies & plans. www.GrowthSpringGroup.com

How to Sell More: Pursue All Four Ways to Grow Your Sales - Part 2

That is the big question in business.  On a daily, monthly and annual basis, we ask, how can we grow our sales?  This blog post will focus on four ways to sell more to your existing customers.  Part 1 covered planned and impulse purchases.  Part 2 will cover upselling and cross selling.  We will save the topic of attracting new customers for another day.

Upselling – the opportunity to sell a better solution

Upselling occurs when you introduce a customer to a better version of their planned purchase and you move them up to a higher value purchase.  An example of this is moving a customer up to the luxury model of a car vs. the base model.  For your customer, the upsell solution and sales approach needs to offer value and be a better choice—but at a higher price. 

Is your team trained on how to do this and do they apply this approach daily? Upselling is a skill to learn and it can be taught.

Successful upselling often comes from an appeal to the emotions, self-image and/or senses to move a customer from the planned purchase to an upsell alternative.  Letting your customer see, touch and experience the upsell alternative will help you engage your customer in envisioning the purchase and use of this new option.  Getting a customer to sit in the luxury model car helps them experience and envision themselves with that choice.  Just showing a brochure with different car models would be much less effective.  Does your sales team help customers envision the difference the better product will deliver?

Does your team know your customers well enough to suggest the relevant upsell products that will resonate?  Presenting an alternative that is not relevant or does not offer more of what your customers value will indicate you do not understand or value your customer’s needs.

Upselling works when executed well as it is seen as a win-win.  A recent survey of hospitality businesses by Caterer and Hotelkeeper magazine showed that 87% found that upselling was either a “fairly effective” or “very effective” part of their business strategy and did not turn customers off.

Cross selling – the opportunity to enhance the experience

“Would you like fries with that?” is one of the most well-known and effective cross selling questions.  Does your team ask the right questions when closing a sale to add to the size of the purchase?  Cross selling is getting your customer to add related products or services that will enhance their experience with their planned purchase.  If you are selling a fishing rod and reel, you will want to cross sell fishing line, bait, fishing tools, etc.

Effective cross selling requires a solid understanding of your customer’s needs.  Why are they buying your product?  How and where will they use it?   Research on your customers’ purchase decision criteria, product use or at least an analysis of buying patterns will help you identify what items to cross sell with each other.  Even capturing insights from customer conversations can help provide insights.

Are your cross sell suggestions relevant and do they add value to the use of the planned purchase?   A well-chosen recommendation can result in a sale or at least a belief that you are working to provide value to them and just not sell them more. 

Two ways to help close a cross sell include:  offering three choices at different price points.  With choices at different prices, customers can chose a solution that is most right for them.  If the middle solution is on target for your customer’s needs, it will often be chosen.  The second approach is to communicate that there is a rational need to make the choice today—communicating a short-term sale price or limited inventory can create a sense of urgency to close the sale rather than having it deferred to another day.

Training your team to anticipate and execute cross selling is a good way to sell more every day.  Providing your team with research insights on what to cross sell with different products will make them even more effective.

All leading to the Future Sell

If you develop and practice each of these selling techniques in your business, you will not only increase your likelihood of selling more on each transaction, you will create one more selling opportunity—the future sell—based on the good will and trust that you gain from your customers by understanding and satisfying their needs.  Good selling!

This blog was originally posted by GrowthSpring Group on the MENG Blend website.

GrowthSpring Group is a marketing strategy, market research, and innovation firm focused on accelerating your sales and profit growth. We help you identify new business growth insights & opportunities and execute winning strategies & plans. www.GrowthSpringGroup.com

How to Sell More: pursue all four ways to grow your sales – Part 1

That is the big question in business. On a daily, monthly and annual basis, we ask, how can we grow our sales? This blog post will focus on four ways to sell more to your existing customers. Part 1 will cover planned and impulse purchases. Part 2 will cover upselling and cross selling. We will save the topic of attracting new customers for another day.

Sales training teaches the obvious fact that to sell more to a customer, you either have to get them to buy more per purchase transaction or get them to buy more frequently. Easy to say, but, in our fragmented media environment and our multi-channel retailing world, it can be difficult to engage your customers and close a sale, let alone sell them more. The intent of this blog post is to not to provide all the answers for all markets, but to get you thinking afresh about these basic approaches to your current customer base.

Plannned Purchases

The easiest way to grow sales should be to close the planned purchase. Customers want to and plan to buy products like yours—your product is an intentional purchase. You need to be prepared to capture that planned purchase and not lose it. It should be easy…but consumers leave stores every day without making a purchase and customers choose your competitor’s products over yours. Many companies/sales people act just as order takers and will just take orders that come to them. Companies that take the time to get to know their customers can then offer solutions that are aligned with the customer’s wants and needs. Whether selling online or offline, creating value through a customer-specific solution and a great user / selling experience can win and keep customers.

Where in these key steps might you strengthen your sales process?

• Qualifying a customer – what do they want to buy and when?

• Identifying needs – what is motivating the purchase – both rational and emotional purchase drivers

• Presenting solution – what is the recommended solution that is a good fit for the customer’s wants and needs. Explain the value of your solution vs. alternatives.

• Handling objections – give information to address concerns regarding your recommendation

• Call to action – Ask for the sale

In some categories, you have the time, the staffing and the opportunity to hold these sales discussions. But in most consumer sales, you must rely on your packaging, POP materials and your marketing communications. Take time to think through how you can get better consumer purchase decision information through ethnographic and behavioral research, shopping basket and purchase data analysis. Use these insights to better present your sales information. Where are the leverage points? What new information and message points can be more persuasive that your current communication?

If the first category is planned purchases, all other purchases must be unplanned purchases. We will discuss three ways to sell and close unplanned purchases. These include impulse selling, upselling and cross selling.

Impulse Selling—the opportunity to introduce value

All of us have been in a store to buy one thing and ended up buying an additional item by seeing it on display or on sale and adding it to our shopping cart. For today’s discussion, impulse purchases will be defined as an unplanned purchased that has nothing to do with our planned purchase item or category. Impulse purchases are driven by new information presented to customers while they are shopping or making another purchase.

Are you using all of these approaches to gain impulse sales?

• A new product the customer has not seen before

• A featured item (in store on display or signed at shelf, online, on a menu or in a sales brochure)

• A price discount or promotional item

• Prompting consumers to remember key consumable/refill products they need

How are you leveraging new information and location to win impulse purchases?

Information—are you providing the right information about your products to create an impulse purchase? A reduced price sign will often prompt an impulse sale. Highlighting a new product attracts attention and trial. Telling your product’s story can help trigger impulse buys vs. competitive products. Tell them what this product is, why it is right for them and why it is a good value. Consumers respond to products that tell authentic stories.

Location—are you placing target products and/or product information where your customers will easily find them while shopping or researching other products or services? At retail, you can place products on secondary displays or use signs and packaging to call attention to your products. If you do not sell your products at retail, locate information about your products in targeted, relevant places to be discovered by your customers and prompt a purchase decision.

In Part 2 of How to Sell More, we help you assess whether you are doing all you can to upsell and cross sell your customers to enhance the value you offer and the experience your customers have with your products and services.

This blog was originally posted by GrowthSpring Group on the MENG Blend website.

GrowthSpring Group is a marketing strategy, market research, and innovation firm focused on accelerating your sales and profit growth. We help you identify new business growth insights & opportunities and execute winning strategies & plans. www.GrowthSpringGroup.com

Winning The Retail Purchase Decision – (Part 3) Who Is Influencing Your Shoppers To Buy Or Not Buy From You?

Each day retailers have the challenge of converting shoppers into buyers and brand marketers have the challenge of converting shoppers into buyers of their brand’s products.

In the first part of this blog, we discussed how purchase decisions are influenced in the marketplace and the pre-store research stages of the consumer decision process. In part 2, we discussed how shoppers choose a shopping destination to make a purchase.  In part 3, we focus on what has been called the “First Moment of Truth,” when a shopper makes the purchase decision in the store.

When examining the many influencing factors in making these purchases, we will examine the points of influence that can be controlled by the retailer, those that can be controlled by the brand marketer and other factors controlled only by the shopper.

The Shopper

A shopper entering the store brings with her a mix of variables that may or may not have been influenced by marketing prior to this shopping trip.  These include the shopper’s plan for the shopping trip, her mood, attitudes toward brands and products, value perceptions, shopping budget, time pressure to buy now, convenience orientation to buy now, brand loyalty, habitual grab & go purchase behavior, expected ease in finding her solution on this shopping trip and her level of involvement in this purchase (time spent researching, importance of specific product features, emotional/social involvement with product). 

These internal factors will have strong bearing on her final in-store decisions whether or not they can be influenced in store.  In order to win any shopper who is not an existing loyal user of a brand, they need to be disrupted, engaged and persuaded that a particular brand / product is worth buying on that trip.

The Shopping Experience

The retailer controls most of the shopping experience.  This is the experience between entering the store and the last 3 feet of the shelf where most decisions are made.  The retailer has selected to deliver either a shopping environment that is focused on making easy, quick purchase transactions or one focused on delivering multi-sensory and personal interactions in store and enhanced solutions that they take home from the store.  This shopping experience strategy can impact store loyalty, length of time spent in store, and often the number of items in the basket.

Transactional retailers include convenience stores, many grocery stores, club stores and many mass merchants.  Products are on shelves or racks and most shoppers find and buy products on their own.  If the only sales associate contact is at the checkout, a retailer likely falls in this category.

Retail experience stores create an environment that engage the senses and/or help shoppers find the unique solutions that are perfect for their needs.  Disney and Apple stores, Bass Pro Shops, and Fresh Market are good examples of this category.

Both retail formats can be effective, but they make different use of in-store experience influencers.  Tools to direct a shopper’s path, length of shopping trip and buying attitude include:

Atmosphere – Store design, store layout, visual merchandising, use of space, lighting, music, type of fixtures, width of aisles, breadth of assortment and amount of product on displays. For some, this translates to ease of shopping, for others it translates to pleasure of shopping.  Atmosphere is one key reason that shopper will spend over 3 hours shopping in a Bass Pro store vs. only a few minutes in a mass merchant’s fishing department.

Wayfinding – Overhead and in-aisle signing guides shoppers to easily find the products they are looking for.  Visual design of signs helps communicate information and give visual cues on the department and category of products.  Good wayfinding helps consumers find the products they came to buy.

Store Associates – A shopper’s interaction with store associates can be highly influential.  Educating sales associates on your brand and products can impact your sales.  Shoppers are drawn to associates who are friendly, knowledgeable and helpful.  Having trained sales associates available to help can boost product sales for recommended products and brands.

The Last 3 Feet

While the shopping experience will influence how long a shopper stays in a store and how they shop the store, the last 3 feet is where each purchase decision is made.  The impact of purchase influencers in this space may vary across product categories.  Tools that can be used to influence and win the purchase decision include:

Merchandising – Whether products are featured on end caps, a secondary display or use in-aisle POP signs to highlight a product’s features and benefits, gaining a differentiating visual element to engage a shopper in-store helps sell product.  Merchandising disrupts habitual shopping behavior and engages shoppers in evaluating the highlighted product.  The result can be brand switching or an impulse purchase.

Brochures – Product information / brochures that a consumer can pick up and read will allow a shopper to learn more about a product and why to buy it.  Mobile phone internet service has expanded access to information in store.  Displays and packaging with QR codes provide access to product information without the cost of printing in-store literature.

Product interaction – For many products, consumers want to touch, feel, and try a product before purchasing.  Tools such as in-store product demos and sampling allow the consumer to try the product.  Packaging with windows to see, touch, or operate the product, let the shopper know exactly what they are buying.  Creating these interactive experiences will help you sell your product.

Packaging – Product packaging is often the last source of product information to influence a decision.  If no prior information source has been engaged (on-line research, family recommendation, retail associate, POP sign, etc.), packaging plays a key role in many decisions.  For a lower-involvement product category, packaging may be the only source of information a shopper has when making a purchase decision.  Great packaging that engages consumers sells product.

Promotional offer – Consumers are drawn to value and special offers.  Offering a promotion gets your product noticed for two key reasons.  First, you change the value equation in a way that makes your product more attractive.  Second, POP communication of a promotion helps your product stand out on shelf.

Price communication – The price at shelf is the trigger to evaluate all the product information received up to this point.  The value will be assessed based on the features and benefits of a product vs. competitive products, the need to buy the product now, the desire to buy the product now and the convenience to buy the product now.  How a price is communicated at the shelf can influence purchase.  Pricing multiples (3/$10) has been proven to boost sales over individual price points ($3.33).  Coke and Pepsi are masters of this tactic.

Wild Cards – Outside Influence

No matter how prepared your store or brand is to sell shoppers on your products, there are outside influences that can trump your best efforts.  One of the most familiar is a shopper with kids.  A child who wants a particular product will often be successful in convincing a parent to buy that product.  Kids have unique talents in influencing purchases in store!

Another in-store influence beyond control is other shoppers in the aisle.  Another shopper is viewed as a credible source of product information.  I watched 3 shoppers being influenced by another shopper on which leaf blower to buy—I ended up buying the recommended blower too!  Other shoppers’ presence and social influence can impact what does or does not go into a basket.  What products a shopper wants to be seen buying will impact a trip…and in some product categories, drive sales online.

Smartphones and mobile internet access are rapidly influencing shopping in new ways.  Shopping apps and mobile searches for product reviews can change an in-store decision or even prompt a shopper to change stores to buy a product.  These tools can also be leveraged to encourage shoppers to check-in on their smartphone to receive in-store promotions or coupons.

Where To Prioritize Your Efforts

With all these variables, where should a brand marketer focus time and spending?  According to a 2011 study commissioned by Google with Shopper Sciences and IPG Mediabrands, the top sources used by shoppers when making purchase decisions are: 

Product packaging                                                    50%

Brochure/pamphlet read in store                                  49%

Talked with a salesperson or associate                         38%

Product signage/display                                             36%

Phone call with a customer service representative          31%

Sampled/experienced the product in a store                  22%

As the impact of these tactics will vary by product category, we recommend you test and establish best practices for your brand.  For most categories, product packaging, product signage/display and retail associates will play significant roles in the final purchase decision.

Winning at retail is an art and a science.  We always recommend starting your shopper marketing efforts with fresh insights to optimize your opportunity to have the biggest impact and best chance of winning vs. your competitors.

GrowthSpring Group is a market research, marketing strategy and innovation firm focused on accelerating your sales and profit growth. We help you identify new business growth insights & opportunities and execute winning strategies & plans.

4 Ways to Win Shopper Hide and Seek

Most of us played Hide and Seek as a child.  You hide and try not to be found by the person playing with you.  It can be a fun game if you are a child.  It is not a good game if you are a consumer product sitting on a shelf hoping someone will buy you.

Is your product hiding? Sometimes products hide in plain sight.  Other times, no one is searching for them.  To win the retail game of hide and seek, consider the following:

1.       First, be in the game.  Make sure you are making a product that people value and will seek out in store.  Make what the market wants rather than making what you can market.

2.       Be easy to find.  The easiest place to be found is to be right in front of the seeker.  When possible, work with your retailer to get secondary placement for your product.  Pursue endcaps, special displays, in-store features, shippers or retail merchandising / POP signage that get you noticed. 

3.       Make your package stand out from your competition on shelf so you can be easily found.  If the consumer has to seek your product out on the regular shelf, do not hide by looking the same as the others in the category.  Clearly make sure you are visually differentiated on the shelf.  Is your package a different color, shape, size, material than your key competition next to you?  Can you make your package look high value and make theirs look blah by comparison?  Don’t hide; shout so you can be found.

4.       Let shoppers know which game your product is playing.  Does your packaging clearly communicate what your product is; what is uniquely better about it than any other product and who is this product for?  Once they find your package, let them know why to buy you.

Remember, your competitor is playing the same game.  If you play the game better, you will be the one to make it to “home” first—in the shopping bag.