Monthly Archives: October 2016

The Joy of Shopping

Most people want to experience the joy of shopping. People no longer consume purely for practical purposes. They purchase products and services in the hope of expressing who they are, and in hope of becoming happy. Savvy retailers can help their customers to enjoy their shopping spree.

“If money can’t buy happiness, why does it sometimes feel so good to buy stuff?” asks Kristin Bianco in his personal finance column at FoxNews Network.  Well, there is an answer for Kristin’s question if you search for it at the right place. That place is consumer psychology. Professor Kit Yarrow, professor of psychology and marketing at Golden Gate University in San Francisco, writing in Psychology Today names the good feeling that Kristin experience when buying stuff “retail therapy”. She says a recent study has found that more than half of Americans admit to engaging in “retail therapy.”

So, when your customers feel down, they go shopping to feel better…

Finding the joy of shopping

According to the emotional view of consumer decision-making1, each of us is likely to associate deep feelings or emotions, such as joy, fear, love, hope, sexuality, fantasy and even a little ‘magic’, with certain purchases. Also, scientists2 have found that shopping does make some people feel good. It’s been reported that when a person shops, the brain releases the chemical dopamine. Dopamine is linked to feelings of satisfaction and pleasure and is released when you face new, exciting experiences. So, what do your customers pay for when they want to have “retail therapy”?

Retail TouchPoints reported the results of a recent survey done by Ebates. The results indicate that engagement in retail therapy is often driven by factors such as boredom and seasonal changes. As many as 66% of adults and 75% of teens indicate that shopping is a great cure for boredom, while 45% of adults revealed that the seasonal changes are the biggest motivator to go shopping.

As indicated in the table below (from the Ebates survey), buying clothes is making most of the US adults and teens the happiest.

Top purchases that make US adults the happiest
% of Adults who said this
% of Teens who said this
Clothing 56 68
Entertainment (i.e. books, movies, music) 42 51
Travel 40 43
Tech/ electronics 38 22
Furniture/ Home decor 33 17

If your customers really want to feel happy, they will go on a ‘shopping spree’. WiseGeek describes a shopping spree as “a playful and “devil may care” attitude in a single shopping trip where lots of money is spent. A shopping spree is the action you take to start your ‘retail therapy’.  But what do your customers say about the joy of shopping?

Customer insights about the joy of shopping

Here are some commentary and comments from customer’s experiences about the joy of shopping.

“I think the clothes I buy will make me happier. The storage bins, the throw pillows, perhaps a bottle of nail polish. And while it’s true for a day, it doesn’t bring me real, lasting happiness. It gives me a bit of a happy high: “I love this new dressssss! How cute and stylish am I!?” but then the excitement wears off and I want to buy something else…” writes Ashley in her blog Our Little Apartment“. The comment of Ashley supports the findings of the survey done by Ebates.

Customers, sometimes, are feeling guilty after a shopping spree. Here are some of the comments on Ashley’s blog:

Ashile says: “It is so true that in the moment we think buying some new it will make us happier. But truly, it is only momentary happiness”.

Marta says “We all have wasted money and resources and time on unneeded shopping. You know how I do now? I ask myself “do I REALLY need it?” “Would I come back tomorrow again to buy it?” “Is it likely that I’ll never find such a wonderful cloth again in the world? Ever?” then, I usually realize that I’m not going to buy anything, and I feel sort of liberated.”

Customers are feeling both positive and negative emotions at the same time before, during and after shopping. But what will the customer feels when she visits your shop?

Creating the right environment for joyful shopping

Previous studies have shown that consumers are influenced by their shopping environments which in turn influence consumers’ emotional states and purchases. The negative emotions consumers experience before the shopping process are soon forgotten when consumers immerse themselves in the shopping process and start visiting stores and examining the merchandise3.

It is unlikely that a random purchase at any venue will have therapeutically value for people feeling down. Their shopping experience needs to reward them. Emotional customers seeking ‘retail therapy’ should visit your shop to reward themselves.  There are some obvious things a retailer needs to do to create lasting shopping experiences for their customers.

  • Keep a wide range and a variety of products;
  • Keep products that are in ‘season’;
  • Make sure that there are always some items on promotion;
  • Try to create an atmosphere in your shop that will make the customers feel happy;
  • Provide the customers with excellent, friendly service and make the transactions hassle free;
  • Allow your customers to see, touch, rub, wear, taste and smell the products;
  • Keep your shop clean and tidy at all times;
  • Make sure that your shop is well well-lit and that there are enough cashiers at the pay points;
  • Play music that put customers in a good mood and give them stylish shopping bags when they check out.

Lastly, “What do customers do when they are feeling bored? They surf the internet to do some online shopping (from the Ebates survey).

Concluding

It seems difficult to draw a line between ‘the joy of shopping’ and ‘compulsive buying’. Compulsive buying is described as an ‘addictive disorder’4   whilst the joy of shopping is keeping our shops open. The question that we as retailers need to ask is what to do if we recognize some of our customers as compulsive buyers? Do we have a moral duty to warn them about it? Or to suggest help?

Image: StatusMind.com

Notes:

1Schiffman, L. G., & Kanuk, L. L. (2000). Consumer behavior, 7th. NY: Prentice Hall.

2Comings, D.E., Rosenthal, R.J., Lesieur, H.R., Rugle, L.J., Muhleman, D., Chiu, C., Dietz, G. and Gade, (1996), ‘‘A study of the dopamine D2 receptor gene in pathological gambling’’, Pharmacogenetics,  6 (3):223-34.

3Saraneva, A., & Sääksjärvi, M. (2008). Young compulsive buyers and the emotional roller-coaster in shopping. Young Consumers, 9(2):75-89.

4Dittmar, Helga. (2004). “Understanding and diagnosing compulsive buying.” Handbook of addictive disorders: A practical guide to diagnosis and treatment , 411-450.

Retail and the Internet of Things

The Internet of Things (IOT) may be an opportunity for Bricks and Mortar retailers. The proliferation of connected devices coupled with less-expensive technology platforms can be used by retailers to get customers back into their shops…

Jonathan Gregory, Managing Director – Accenture Strategy says IOT offers retailers opportunities in three critical areas: customer experience, the supply chain, and new channels and revenue streams.

Before discussing the opportunities of IOT, we must first explain what IOT is.

What is the Internet of Things?

There are many complicated, high tech definitions for the IOT. However, Jacob Morgan contributing to Forbes puts it simply – IOT is the concept of connecting any device with an on/off switch to the internet (and/or to each other).

How many things can you think of that has an on/off switch? In your home – TV sets, air conditioners, lights, alarms, stoves, geysers, garage doors – the list is never ending. Now imagine connecting all these devices to your smartphone or, connecting them with each other.  And then connecting everything with other persons…

The IOT is a giant network of connected “things” (which also includes people).  Hence the relationship will be between people-people, people-things, and things-things, suggests Jacob Morgan.

Let’s get back to the opportunities that IOT render for retailers.

What opportunities do the Internet of Things offers retailers?

The author of this blog has previously mentioned the challenge that Bricks and Mortar retailers have to stay competitive in the digital economy (http://bricks2clicks.co.za/retailers-can-remain-competitive-turbulent-times/). How can the IOT help retailers with their activities?

Customer experience

The customers of retail are adopting digital devices at a staggering rate. They are eager users of smartphones, tablets and digital watches.  Digital devices make their lives easier, and they want the same experience from them in shops as what they get at home or at their workplaces.

“The digital transformation of retail is driven by customers” says Tony Stockil, CEO and Founder, Javelin Group. Most customers want to experience shopping as part of their entertainment.  Shopping is now a form of entertainment, available 24/7, wherever people are. Retailers therefore need to ensure that the brand experience is seamless and constant at all touch points.

James Wilson, Baiju Shah and Brian Whipple did an open-source analysis of IOT user behaviour (“How People Are Actually Using the Internet of Things”, HARVARD BUSINESS REVIEW, October 28, 2015). They found that consumers want an IOT that provides personalized services that can be adapted to different contexts.

The data show that the most heavily used IOT programs are ones that make home life easier, more distinctive, and more pleasant. According to the results, customers show a big preference for services that don’t require them to go out of their way to make something work.

The supply chain

Connected devices and products provide retailers with the opportunity to help optimize operations in the face of a more complex supply chain, increasingly important digital channels, and a more demanding customer.  By utilizing the IOT, managers can track inventory more easily, and adjusting pricing in real time using smart tags.

IOT allow small retailers operating an eCommerce channel to automate their warehouses. By upgrading to automate warehouse retailers will be able to process orders rapidly, accurately, and in real time says the OPEX Corporation. The upgrading may put retailer’s service and standards on par with the “big boys” in their retail sector. The cost benefits of a goods-to-person picking system are that it saving time and it is accurate. The system ensures getting the right product at the right time at the right place.

Automated warehouse system

Automated warehouse system

Creating new channels and revenue streams

The power of the IOT lies in the opportunities it presents to retailers to create new revenue streams or build entirely new channels. As such, household appliances, home security and comfort products, even health and wellness products are all becoming part of the IOT ecosystem.

Some retailers are taking further advantage of the wide array of connected products by becoming an integration “platform.” According to Jonathan Gregory, the idea behind these platforms is to make it easier for customers to make all of their in-home devices talk to one another.

Grocery retailers may partner with the suppliers of connected platforms that would give them  direct channel to customers. Subsequently  a potential gold mine of customer data can be created – information associated with almost every aspect of the household, from utility usage to consumption trends.

What are the dangers of the Internet of Things?

Jason Bloomberg, President of Intellyx writing in Wired, gives seven reasons he thinks the IOT is doomed:

  1. Security – with products and people connected, savvy hackers can easily access important information about you and the way you live.
  2. Privacy – it is about ‘Big Data’. Therefore, the more IOT you have, the more Big Data they collect, and the more Big Data they collect, the more they know about how you behave.
  3. Digital fatigue – too much social media, too many smartphones, too many YouTube videos to watch. There are also too many apps to download, too much of everything digital and wired and online.
  4. Ecosystems – with the IOT the battle is starting again to dominate this technology ecosystem. There are many dealers, both large and small,  trying to establish a foothold, hoping to create their own ecosystem.
  5. No Killer App – so far, the IOT has no Killer App. However, the Killer App could be just around the corner. They have a nasty habit of appearing on the market suddenly with no warning.
  6. Enterprises will mess things up – for an enterprise to succeed with the IOT or any other part of their Digital Transformation initiative, there are no shortcuts – only hard work.
  7. Rather put customers in control of the IOT – let the consumer control the security of each device. Let them determine what data the devices upload to the Big Companies.

Are you ready for the IOT?

Customers want IOT programs that make home life easier, more distinctive, and more pleasant. Also,  the IOT gives small retailers the technology to do their logistics more efficiently and cheaper.  Further offer the IOT retailers the opportunity to collect data from their customers at their homes and place of work.

There are however a couple points about the IOT that should be considered before using it:

  • Is the IOT system developed and secured enough to use without facing financial of legal liabilities?
  • Are you certain that by using the IOT it will be done ethically?

Lastly, let’s hope that the IOT will add value to both retailers and their customers not long from now…

How Retailers can Remain Competitive during Turbulent Times

Many retailers find it difficult to remain competitive during times of turmoil. The traditional way to compete is not working and retailers are looking for new ways to survive.

“It is in the turmoil of chaos that we discover what, if anything, we are” – Orson Scott Card.

Being competitive the traditional way

The traditional way for retailers to be competitive is well known.  The best location, the lowest prices, the best trained staff, the best stock and the longest trading hours were adequate to survive and grow.  The list below shows how the face of retail has change over the past century.

The changing face of retail:

  • 1900 – the local corner shop;
  • Up to 1940 – department stores and general merchants;
  • 1940 to 1970 – enclosed malls and mass retailers;
  • 1970 to 1990 – value players, club stores and category killers;
  • 1990 to 2008 – eCommerce;
  • 2008 to present – multi-channel retailing.

The change that retailers had to face between 1900 and 1990 were gradual and was the result industrialization and urbanization. The digitization of the retail industry has however revolutionized the rules and economy of retail and resulted in turmoil.

The turmoil in retail is not necessary bad. Retailers should see it as an opportunity to reinvent themselves, by using the new rules of the industry to their advantage.

Competing in the digital economy

The digital economy helps level the playing field so small retailers can more effectively compete in markets that were previously inaccessible. However, if Bricks and Mortar retailers don’t participate in the digital economy, their businesses will stagnate and decline. You therefore need to be part of the digital economy in order to enjoy its rewards.

Here are two ways for Bricks and Mortar retailers to get their sales back on track:

Create an eCommerce website

An eCommerce website will allow retailers to be found online and to do business anywhere. The Bricks and Mortar retailers are now Bricks and Clicks retailers and can cater for customer in their shop as well as in the digital world.

Create a digital experience for your customers inside your physical store

Most customers that visit Bricks and Mortar retailers are using mobile phones to get product info and compare prices. Retailers can beat their competitors by making it easy for their customers to go online in their shops:

  • Offer a free Wi-Fi service;
  • Place internet access points at places where technical detail and prices comparison are important for customers;
  • Introduce a ‘click and collect’ system at your shop. Customers can order and pay their products online and then collect it at the shop.

By adding the online channel to you retail business and setting up digital gadgets in your shop, you have entered the digital economy.  Maybe the turmoil of the industry has helped you to discover what your business is about…

Visit eBizplan for more on adding clicks to bricks.