Thursday, August 30, 2007

How far would you go to prevent disappointment?

I've been thinking about the concepts of "expectations" and "disappointment" after reading a recent article over at Flooring the Consumer, a retail experience-oriented blog. The author explains her disappointment after planning and taking a trip to a local IKEA for an afternoon of lunch and shopping. Apparently, due to a county-wide problem with the water supply the IKEA's heavily-used cafeteria was out of commission for the afternoon, leaving the author and her young daughter out of luck (well, for the lunch part anyway. They managed to get some shopping in). Her take on the situation: IKEA could have done a lot more to avoid disappointing its customers, many of whom expect the cafeteria to be operational, and factor it in as part of their decision to shop at IKEA in the first place. She goes on to offer some possible solutions and workarounds that the store could have taken, including:

Given IKEA's commitment to serving family meals, why couldn't the store come up with a temporary, but fun food solution? Offer complimentary cookies? What about water, soda, milk? As we checked out, I noticed that ice cream was available at a cash/wrap snack bar. Why not upstairs in the cafeteria? Why did I have to check out to realize that another food [OK, snack food] option was available? This didn't make sense.

What about selling sandwiches? Or offering Lunchables? I understand water and sanitation issues, but why should that completely shut down this cafeteria? During the busiest shopping day of the week? When the store heavily advertises the service that had been shut down? What a missed opportunity.

Needless to say, I was disappointed with the response to the water emergency. These things happen, and what a lost opportunity to draw in consumers and Wow! them with a delightful and unexpected solution to a crisis. Especially the coveted woman and mom demographic!
Normally, I find the author's (C.B. Whittemore) estimates and advice to be dead-on. Practical and typically insightful, she's a demanding customer who has an eye for turning good retail experiences into great ones. And in fact, I think her suggestions for handling the closed cafeteria problem are mostly workable as well (I don't know about bringing in outside food sources -- I think that kind of thing could be laced with legal and logistical problems that would only be worsened by a lack of potable running water). Overall, though, I think that her high expectations led to a more severe disappointment than she might have felt if she wasn't so enamored with this particular retailer in the first place.

Therein lies a problem, specifically a Catch-22: retailers constantly work to improve their customers' experiences, and hence raise their customers' expectations. Consequently, when any kind of problem arises, it gets magnified, appears much more severe -- and is more disappointing -- than if the retailer had only a mediocre reputation that invoked moderate expectations to begin with. Thus in some ways being a top-notch retailer can get you into trouble, since with the higher highs come the lower lows, and measures to thwart and circumvent day-to-day glitches in the operation have to get continually more elaborate.

The situation reminds me a bit of the JetBlue fiasco that happened when an ice storm this winter shut down traffic to the airline's major New York hub. Traffic to a number of airlines was affected, but JetBlue got the lion's share of negative PR. Sure, a greater percentage of their flights were affected (due to both their reliance on the JFK hub and a bunch of admittedly terrible decisions by management), but by that point the airline had such a tremendously positive reputation that a glitch that would have merely upset another airline's customer base got JetBlue's passengers really, really angry. In short, JetBlue's customers -- just like IKEA's -- felt a more severe disappointment because their expectations were so high to begin with.

What's the solution to this problem? I certainly don't want to have my retailers and service providers suddenly stop trying just so I'll be less disappointed that they suck. That's not in anyone's best interest. But at the same time, I recognize that at some point it gets really hard to keep getting better. The only good news for retailers that continue to try harder is that for the really good, perhaps remarkable ones there seems to be a halo effect that dampens bad memories faster than for less remarkable ones. Thus, all of the goodwill that JetBlue accumulated over its years of being better than everyone else meant that shortly after the negative PR blitz they were able to win back customers with relatively little effort, and once again everyone agrees that if you have to fly, JetBlue isn't a bad way to go.

Likewise, I expect that even despite her lunch-less afternoon, C.B. Whittemore will find her way back into an IKEA sooner rather than later :)

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Saturday, August 25, 2007

Would your store look good on the silver screen?

That's what experience design buff Adam Lawrence asks in a recent post to his blog, Work * Play * Experience. Specifically, Lawrence ponders what kind of insights we can learn about experience design by literally changing our perspective, and walking through a store/room/building looking through a camera. His advice: get a video camera and walk through your venue filming. By using only the camera viewport for navigation, you'll be drawn to details that you'd probably miss if walking through normally. As an added advantage, you can review the film later, pause, rewind and even invert the image to look for other flaws, details and areas that could use some improvement.

The idea stems from a technique used in film production. A good director knows that by looking through his viewfinder he's seeing what the audience will eventually see. A novice director, on the other hand, will watch the scene as it unfolds right in front of him and will thus mentally includes extra "stuff" that might make the scene better or worse, but will never make it onto the big screen. The idea extends well into a retail environment, especially for merchandising and retail marketing experts who often visit stores. Predisposed by years of experience to look for certain things -- shadows, lighting, traffic patterns and the like -- even a good retail designer can miss obvious flaws and details because they're outside of the scope of what he's looking for. By forcing the designer's perspective to change by using a camera viewfinder, it's more likely he'll look in different places and notice different things because there are fewer expectations of what the environment should look like.

Lawrence also recommends doing the same thing on your knees or in a wheelchair to get an idea of what a wheelchair-user or even a child's perspective of the same space might be. This is especially good advice for store designers whose primary customers are children and their parents. What might look good for one set of (physically similar) shoppers could be less attractive or even intimidating for another.

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Monday, August 20, 2007

Retailers remember: if we look good, you look good

Sara Cantor, the Curious Shopper herself, has once again reminded me that I'll never really understand the way girls think. Specifically, it was this article that did it. Don't get me wrong -- with all of her usual flare for storytelling, Sara delivers some great shopping-related insights that have real, practical implications. But darn it, as much as I try, try, try to understand what people do in store, there are tidbits like this that I would just never think of:
If you want girls to buy your prom dresses, don't make them try them on in their white gym socks. Give them heels, for god's sake. They will look ten times better, and will be more likely to buy the dress. Who knows - they might even buy the shoes too.
What a nice cross-sell opportunity, and it apparently solves a problem that I never even knew existed. Granted the body of Sara's argument, namely that people will spend more when they look/feel better, is a much more well recognized and understood concept nowadays. In fact, retail anthropologist Paco Underhill has written entire chapters on how bad most dressing rooms are, and how many more sales would be completed if retailers would just spend a little money to make them look better (and by extension, make their customers look better, too).

But still, I'm apparently not spending enough time in stores really watching how other people shop. Case in point? Sara's own anecdote about buying glasses. This should be something I can relate to, I just bought a pair myself recently. And in fact, I went to three different places (long story, not too interesting though), and observed no fewer than a dozen other people shopping for specs too. Yes, everyone was looking in mirrors, and most tried on a number of pairs before settling on the right ones. But I didn't observe the ritual Sara describes. Apparently either that was too time-consuming for my audience, or maybe we just didn't have the same dedication to the task.

Or, after reading through my notes once again, maybe there's another reason: the dozen folks I saw shopping for glasses? As it turns out, they were all guys.

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Customers want the "in-store experience" to continue online

Lots of people have spent an unhealthy amount of time writing about the importance of the retail experience -- the environment, the products, the thrill of the hunt -- whatever it is that turns an average shopping outing into something a bit more unique, personalized and fun. In fact, shopping is increasingly become a pass time for many who will spend hours going from store to store even when they have no plans to purchase anything (so I'm told -- the concept is pretty foreign to me personally). But I was pretty surprised to find that online shoppers are starting to expect the same kind of "shoppers high" on the web as they do in brick-and-mortar stores. And as this article from the Retail Bulletin notes, with fickle shoppers easily able to bounce from one virtual store to the next, that's causing a lot of sleepless nights for the e-commerce gurus working behind the scenes at many of the most famous retail chains:
Customers demand an experience that is functional and easy to use. recently found that 90 per cent of users would happily switch to a competitor if a site fails to load. However, they also want to feel genuinely welcomed and see strong continuation of the brand they know and love. A visit to your web site should only further encourage the loyalty that your customers feel for you. As such, it should be remembered that online storefronts are now an integral part of the business for any retailer, and need to present themselves as much more than just an online catalogue of products. Every website needs to reflect the same brand values and aesthetics as your other customer touch-points, be it in store, via email or through your call centre.
With evidently such little brand loyalty, many retailers are turning to multi-channel programs that mix online loyalty features with calls to the brick-and-mortar stores where it's easier to stand apart from competition (and the competition is literally harder to get to than online). The article recommends using a web-based presence not just as a product catalog, but instead as a sales tool designed to provide a personalized brand experience, thus moving the traditional in-store experience into the shopper's home. The web can also be used to drive traffic to slower moving lines that might fit particularly well with the shopper's tastes depending on information collected as part of the aforementioned loyalty program. In the end, the article states, retail stores are still the best place to follow the 80/20 rule of sales (where 80% of sales are generated on the top 20% of products), but with the web there's now a cost-effective way to tap the "long tail" effect by connecting customers with ideal, though harder to find, products.

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Advertising Age offers advice for targeting college-age consumers

It's back-to-school time, and as practically any retailer will tell you, B2S is quickly becoming another critical season (maybe even second to Christmas). While college-age shoppers are notorious for being fickle and hard to target, this article from Advertising Age notes that their fondness for cable TV and web surfing is giving marketers much better control over how and when they show their ads:
When it comes to advertising, for example, students are just as much about viral marketing as they are about keeping it verbal. Two-thirds of students said they learn about new brands, products and services they would like to purchase from friends, with 61% citing word-of-mouth as their preferred method of communication. That's up considerably from 2004, when 48% said they prefer word-of-mouth advertising. Of the brands most important for students to share with their friends, movies and electronics are the two key categories, with 60% citing movies and 48% citing electronics, respectively.

"Word-of-mouth is possibly seeing more strength in the advertising category [because] it's not perceived by most college students to be an advertising platform or a marketing tactic," Ms. Skey said. "It's just an information source or a social media of sorts."

As a result, social-networking patterns have changed in the last three years as well among the college demo. Ms. Skey said students are maintaining fewer personal profiles across the many
social-networking options (down from an average of 17 in 2004 to 7 in 2007), but keeping more friends on average in less places. Essentially, they've already gone to the trouble of aggregating their potential audience reach for marketers hoping to reach them on MySpace and Facebook.
Both of these trends seem to indicate that it's going to be harder to optimize in-store media for this demographic as media choices continue to expand and (consequently) target specificity continues to improve. However, one thing that we do have going in our favor is that because our medium is place-based, it already has an extra degree of specificity that broadcast TV and even cable lack. Can we use the fact that our screens are in stores to better connect with this key demographic during this very important time of year (in the retail calendar, anyway... down here in Florida I'm personally waiting for the beginning of "yay, I can go outside again" season, which usually starts in late October).

I think the answer is yes, provided that the advertisers running content on the screens are willing to do a little more integration work. Many of these companies are already using social networking and word-of-mouth campaigns to build buzz and gain mindshare with 18-24 year olds need to extend these projects into the store on their POP displays, and of course their in-store media. The latter could prove especially beneficial, since they can be updated frequently to reflect the dozens or hundreds of minute changes that often take place in below-the-line efforts like organized word-of-mouth.

I've still yet to see advertisers jump on board with a truly integrated in-store advertising campaign, but as they continue to work harder to reach ever more elusive and media savvy demographics, it seems like it will only be a matter of time before this becomes commonplace.

Tuesday, August 14, 2007

Product packaging takes center stage

I think there's some unofficial rule that says "when the New York Times talks about it, you know it's news." So needless to say, this article about the new importance of product packaging strikes me as something important to talk about. I for one have always been a sucker for packaging. Your company has a reputation for killing puppies and your products could be lethally toxic, but if you put them in a cool, shiny package, I'm going to be drawn to them (thankfully I don't often buy them, but seriously, the packaging can't do all the work).

Apparently Kleenex, Pepsi and a host of other big CPG manufacturers have figured this out, as they're all starting major packaging reworks in an effort to capture the imaginations (and paychecks) of more shoppers. Kleenex is abandoning it's iconic (and cheap to produce) square boxes for a new oval shape hoping to appeal to your inner interior designer. Coors has new beer bottle labels that change color when the beer has reached its ideal temperature (granted you'll still be drinking Coors -- no miracles here). But my favorite example has to be Pepsi, who will be changing the design of its Mountain Dew bottle a dozen or more times this year, all in hopes of attracting more attention on the shelf. Here's my favorite part of the article:

Laurent Nielly, who heads packaging innovation for Pepsi in North America, said young people -- Pepsi’s central audience -- have shorter attention spans than previous generations, so bottles and other containers have to change more often. Pepsi is experimenting with the designs on its Mountain Dew bottles, selling aluminum bottles covered in graffiti-like designs that will be changed 12 times from May to October. The bottles are sold only in eastern Virginia now, but the soda maker may expand the approach if sales of the bottles go well.

If products aren’t spraying consumers, they may someday be talking to them.

Some companies are studying technology to put a computer chip and tiny speaker inside a package. This idea might be particularly useful for big companies like Unilever that want to cross-promote their various brands. So a package of cheese could say “I go well with Triscuit crackers” when a shopper takes it off the shelf. As the costs of the chips come down, marketing executives said this and other technologies would appear more on shelves.

The mental image I get is pretty amusing, but one could also imagine the aisles of your everyday supermarket becoming much more noisy and annoying. Still, the inevitable march of progress suggests that such innovations are a virtual certainty -- at least until customers rebel against those overly-helpful packages of cheese and Triscuits.

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Wednesday, August 08, 2007

In India, chaos equals retail sales

The Wall Street Journal published a really fascinating article about Pantaloon Retail (India) Ltd., India's largest retailer, and their discoveries that western retail innovations don't always translate neatly to other countries with different ideologies and histories. In fact, even simple, seemingly common-sense features like quiet stores, wide, straight aisles and fresh, clean produce (basically the hallmark of a good supermarket here in the US) take on decidedly different meanings in India. Says Kishore Biyani, president of the firm, "The shouting, the untidiness, the chaos is part of the design." The WSJ provides some further explanation:
[When] Mr. Biyani tried that in Western-style
supermarkets he opened in India six years ago, too many customers
walked down the wide aisles, past neatly stocked shelves and out the
door without buying.
Mr. Biyani says he soon figured out what he was doing
wrong. Shopping in such a sterile environment didn't appeal to the
lower middle-class shoppers he was targeting. They were more
comfortable in the tiny, cramped stores -- often filled with haggling
customers -- that typify Indian shopping. Most Indians buy their fresh
produce from vendors who keep vegetables under burlap sacks. Even the dirty, black-spotted onions serve a function. For the average
Indian, dusty and dirty produce means fresh from the farm, he says.

Yet while he has worked hard to de-westernize the customer-facing portion of his operation, Biyani has adopted many high-tech innovations to optimize things behind-the-scenes, using fancy ERP software and just-in-time inventorying to maximize profitability and ensure that his company runs as efficiently as possible.

Interestingly, Biyani notes that while the market-style approach of his grocery stores is designed to appeal to lower- and middle-income Indians (who make up the vast majority of the population), he has had success introducing Western-style stores (with clean floors, air conditioning, and well-merchandised goods) catering to more affluent Indians, so exposure to other cultures -- and probably the "brand image" that those cultures carry -- does seem to play some role in shoppers' expectations of how a store should look, feel and function.

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Tuesday, August 07, 2007

Getting the store ready for pre-shoppers

Just a few months ago I did a blog on pre-shopping, citing a study that suggested around 2/3 of shoppers do some research online before making a purchase in-store. While 66% is certainly nothing to sniff at, compared to the amazing 89% that this Yahoo! study estimates (brought to my attention by this article at Retail Design Diva), it seems like a drop in the bucket. From the study:

  • Consumers exposed to online advertising are more engaged:
    Consumers exposed to display and/or search advertising viewed an
    average of six more pages during the period in which they were
    researching compared to those not exposed to advertising.

  • Almost 90 percent of the incremental sales generated by online
    advertising take place in-store
    : Consumers exposed to online
    advertising spent an incremental six dollars in-store for every one
    dollar spent online.

  • Integrated search and display campaigns have maximum impact:
    Combined search and display ad campaigns resulted in deeper engagement
    for consumers exposed to those ads, leading to increased sales.
In my own blog article on pre-shoppers, I focused on the importance of using in-store displays to better tune the brick-and-mortar shopping experience for pre-shoppers. For example, POP displays and digital signs can encourage a purchase or improve the perception of suitability of a product/brand by using an information-driven approach to allow shoppers to tick off items on their mental checklist. Likewise, making signage that can communicate a message in less than the 3 seconds that P&G estimates is available for a "First Moment of Truth" is essential to entice shoppers who already know most of the brand's promises from their research.

It's pretty hard to simultaneously optimize in-store POP for shoppers who know nothing about a product and shoppers who have done some research, but 90% of incremental sales generated by online ads take place in store, so we know that shoppers are getting armed not only with information, but also brand and product preferences long before they reach the store. One thing's for sure: staying on message for those last few feet and last few seconds before a customer makes a selection in-store will become increasingly more important.

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