Using scent, sound and taste to create value

by Melanie McIntosh

Scent

The use of strong scents in stores has become a rather touchy issue, and one that requires that each retailer be attuned to the needs of their target market.

Stores like the Body Shop have been very successful with their wonderfully scented stores and products that you can sample. Department stores traditionally sampled perfumes at the entrance to increase sales of those products. Grocery stores owners know that the smell of fresh bread will entice hungry shoppers to buy.

However, many customers find strongly scented products not only unappealing, but can cause allergic reactions that make it nearly impossible to shop in certain stores.

A pleasing scent can create a wonderful ambience and add to the customers' shopping experience, particularly if it is a sample of one of the products you are selling. In some cases, the best scent may be the absence of any noticeable scent at all, adding to the impression that the store and environment are clean.

When considering whether special touches like scented candles would be appropriate in your store, make sure you consider the preferences and sensitivities of your target market. As with many other issues, if you are unsure, ask your customers.

Scent can also be a major factor in determining which product to buy. Everything from hand lotion to cleaning products are purchased with scent in mind. Many of these products work equally well, so the scent may determine which one is purchased.

Sound

Most retailers understand that music adds to the environment of their stores. People will expect to find classical music in an art gallery or museum shop, enhancing the belief that the shop is filled with merchandise that is high quality, tasteful, elegant and artistic.

In stores that are trendy and have a young target market, music can be a major focal point. In most other cases, music provides a pleasant background. It is important that employees understand that the music is a part of the marketing and is intended to appeal to, or at least not offend, the customers.

Music should add to the ambience of the store, but, unless it is crucial to the product and market, not be so loud to be immediately noticeable. It should cover up the sounds of customers moving about the store, employees working or the conversations of people across the room.

Music stores have found that sound can be sampled, which is a great way to add value for the customer. Any time the customer has a chance to try out a product, they are more likely to buy. How many people buy a CD without sampling it on a headset first?

People are usually afraid of the unknown. Sampling a product before buying helps us overcome this fear, without making a commitment.

Taste

Many retailers don't have the opportunity to offer customers the chance to taste their product. But those in the food industry certainly know the power of free samples.

I can be very thrifty when need be, and pass over many unnecessary luxuries, but when it comes to food, I am easily swayed. My children beg me to take them shopping at Costco just to try all the samples. And of course, the marketing gurus know that my entire shopping excursion will be punctuated with cries of, "Mom! We need to buy this! Please! Can we go by that table again?"

I know many people who are now addicted to those little frozen cream puffs that they innocently tasted at a sample table.

Even if you are not primarily a food retailer, but carry gourmet chocolates at the sales counter, you might try offering small samples occasionally. Perhaps you might host a special event where you offer refreshments to your customers.

Appealing to your customers' senses is about enhancing their experience. The more the customer is actively involved in the experience, the more likely they are to buy from you, and to remember their experience. For this experience to be perceived as added value, it needs to be in tune with the needs and values of your customer, and it needs to relate directly to your product.

This article has been reproduced from http://www.inspire.ca/

Customer Experience Checklist

Here is an interesting checklist to see if you are doing it right.

Customer Experience Checklist

• There is a clear definition of target customers.
• The needs of target customers are well understood.
• There are clear objectives for how the project will impact target customers.
• The experience is designed for every stage of the customer lifecycle, from initial roll-out to ongoing support.
• There is a plan for testing the impact on target customers.
• There are resources and time allotted to iterating on the design to improve customer experience.
• There is a plan for gathering ongoing feedback to monitor the customer experience over time.
• There is a clear definition of success, for both the company and for target customers

Courtesy www.retailcustomerexperience.com

Using Sight and Touch to Enhance Value

by Melanie McIntosh

Value.

We often talk about it, but what does it mean? How do ensure that our customers perceive it?

Value is defined as estimated worth, or the quality of a thing which makes it desirable or useful. When a customer makes a purchase, they estimate that the value of the product is at least equal to the price they are paying.

Everyone wants to get their money's worth. The perceived value of a product must be higher than the sticker value. Pretty basic stuff. No one likes to get ripped off. The hard part is that value is subjective. We have formulas to determine price, but how do we determine value?

The way each person perceives value may vary, but as a retailer, you should have a good idea of what your target market values. Your customers, as a group, may value the quality, aesthetics, or usefulness of your product. Or perhaps your product is one that brings prestige, or respect.

Value may be subjective, but the good news is that you can control many of the factors that affect how your customers perceive it. You need to clearly determine what your target market values, and then you can enhance the perceived value of your product.

Perception is knowledge that is acquired through our senses. To have an effect on the perception of value, appeal to your customers senses: sight, touch, smell, sound and taste.

Sight

Enhance the visual perception through your window and in-store displays, signage, store design, layout and merchandising.

A cluttered environment can convey messages of disorganization, cheap products, poor management. Or in an antique shop, clutter may convey the anticipation of discovery, of finding a treasure of great value.

To portray prestige and quality, products are usually presented in a well-designed environment with out clutter. Perhaps they are displayed with other products or props that are known to be valuable.

Products are also valued for their own visual appeal. Customers buy products that enhance the image they are creating of themselves, their homes or businesses, etc. Find out from your customers what styles of décor or clothing they like. Then tailor your buying to fit the tastes of the customer. Remember - your customers will not necessarily buy the same things you like.

Successful retailers try to determine what style appeals to their target market, and only carry products that fit the market's needs. Less experienced retailers often make the mistake of trying to please everyone. The customer receives a mixed message instead of a clear visual picture of the image or product of the store.

The key to making visual perception effective is attention to detail. All aspects of your business must convey the same message. The impression of a dirty washroom, or a poorly groomed employee can undermine the time & expense poured into merchandising and design.

Touch

Touch is very important to perception. Customers want to touch before they buy. Products need to be accessible to customers to touch, try on, experience.

This is one of the barriers to internet retailing. The customers senses are limited to what they can see, or maybe only read about online. This is one of the factors that limit customers willingness to buy.

The same is true of product packaging. Customers will tear open packages to get a chance to touch the item before they buy it. Research has shown that customers are more likely to buy if they can touch the product first. They want to know the softness of the towel or the weight of the silverware.

Stores that have locked display cases need to focus more energy on sales and service, because customers will refrain from asking for the cases to be opened. Many customers are reluctant to request assistance from the salesperson if they are just looking. The customer may not want to bother the salesperson, or may be trying to avoid an unwelcome sales pitch.

Sample products removed from the packaging, or testers for products like lotions are opportunities for the customer to have a tactile experience of the product.

How often do you purchase a product with out picking it up and examining it from all angles? You usually try on clothes, lie down on a bed or sofa or pick up dishes just to see if they feel right. Usually the less routine the purchase, and the more expensive the item, the more important it is to touch it before buying. When choosing products to sell, be aware of the tactile qualities. If you are selling towels, sell the softest towels you can find. Then emphasize these qualities as features in your selling strategies.

The GAP is an example of a store that enhances its products' visual and tactile perception. The stores are clean, there is no clutter, and everything is visually appealing; from the clothes themselves, to the store design, the fixtures, washrooms, fitting rooms, and even the personal appearance of the employees.

The product is easily accessible to customers and the clothes feel like they are good quality. The fabrics have weight, and are not likely to wear out quickly. Some of the cottons are brushed to feel softer. The clothes are made to fit well, so the customer feels confident.

The clothes are basic, yet also follow fashion trends. It is easy to mix and match items. You don't have to worry about making a fashion 'faux-pas'. Through the visual and tactile appeal of their clothing and stores, the GAP has given their products attributes of quality, comfort, and fashion. The product is perceived as having a wide acceptance and even a certain respect and prestige.

Think about your own business. Make a few quick lists:

What are the values of your target market?

What values are your products aimed at?

What can you do to enhance the perception of these values?

Write down the five headings: Sight, Touch, Smell, Sound and Taste. Under sight and touch write down at least one thing you could do to enhance these senses.

This article has been reproduced from http://www.inspire.ca/

The Lost Art of the Loss Leader

By Dave Furtwengler

During high school I worked in a grocery store that used loss leaders to attract buyers. Once buyers were in the store they would typically buy enough related offerings, with higher margins, to more than offset the loss on the loss leader.

That’s not what I’m seeing today. Today we’re discounting everything during our peak selling seasons. Grocery stores not only offer low prices on turkeys at Thanksgiving, they discount the cranberries, candied yams, pumpkin pie filling, pie crusts and rolls — anything and everything you might need for your feast.

Oh, let’s not forget the pre-meal drinks and snacks. All of the soda, beer, wine, bourbon, scotch and other alcoholic beverages are on sale too. As are the chips, dip, peanuts and pretzels.

This madness isn’t limited to grocery retailers. Years ago I had helped a client purchase a franchise from a well-known chain. He called one day and said "The home office is offering a promotion on our crabmeat sandwich during lent (a period of peak demand) that is basically break even for me. Does that make sense to you?"

Unfortunately it did. The franchisor gets a percentage of the total revenues generated whether the franchisee is profitable or not. Fortunately, the franchise agreement did not require my client to accept this promotion. He held his prices on the crabmeat sandwich while offering other loss leaders. My client generated significantly higher profits for his store using this strategy.

These two examples show that we’ve lost sight of the true purpose of loss leaders. How did this happen? Here are the reasons I hear:

• We’ll lose sales if we don’t match our competitors’ low prices
• Buyers only care about low prices
• We can increase market share with lower prices

Here are the realities:

Buyers, particularly retail buyers, place great value on convenience. If you are the most convenient location and you’re losing sales to a competitor over low prices, you obviously aren’t providing an enjoyable experience. When you lower your prices just 10 percent you increased the number of customers you need from 10 to 11.

Let’s look at these realities in greater detail.

Time is the only non-replaceable commodity any of us has. That’s why buyers go to the most convenient location that has employees who demonstrate some care and concern for their welfare. Which brings us to reality No. 2, the customer experience.

You’re a buyer. You’ve made purchases that cost you more simply because the people at the store greeted you warmly, remembered your name, made you laugh. For a truly great experience you’ve probably driven 10 minutes, 15 minutes or more out of your way and paid a higher price for the exceptional experience. Your customers have as well. Blaming your competitors’ low prices instead of examining gaps in your service level is akin to the child’s excuse — the dog ate my homework.

Speaking of customer experience, if yours isn’t good enough to retain your customers when your competitors lower their prices, how in the world are you going to attract that 11th buyer you need to recoup you the 10 percent discount you gave? Your competitors face the same dilemma. If you’re providing a richer experience than your competitors, their low prices won’t draw your customers away from you, making it nigh on impossible for them to recoup their discount losses.

If the above isn’t enough to get you to reexamine your loss-leader strategy, let me share a news brief with you. During the late-evening newscast on Black Friday the newscaster said that retailers were offering huge discounts in hopes of at least matching the previous years’ sales. How does that compute? Buyers don’t increase their spending budgets when prices drop. If anything, you may have just given them an incentive to hold onto some of that budget.

We wouldn’t be doing justice to this discussion if we weren’t looking at these loss leaders from the buyers’ perspective. When retailers lower prices on everything, instead of just a few loss leaders, how does the buyer react? I doubt that any of you have had a customer come up to you and thank you for the low prices. It’s more likely that they have come to expect that kind of pricing every year during peak demand.

In every human interaction one person is training another how to behave. Because we’ve lost the art of the loss leader we’ve trained our customers to expect low prices on everything they want, when they want it most.

Don’t fall into that trap again. Begin creating customer experiences that make them willing to pay more for both the experience and the convenience you offer. Then hold your prices. You’ll enjoy greater revenues, higher profits and greater customer loyalty.

Reproduced with permission of www.retailcustomerexperience.com

Damas CEO quits

Arabian Business reported today that the managing director and CEO of UAE jewellery retailer Damas International left the company after admitting to being responsible for unauthorised payments worth up to $165m. The company announced that it has accepted Tawhid Abdulla’s resignation.The luxury retailer said in a statement that he had stepped down "due to his disclosure to the Board of what is understood to be unauthorised transactions conducted by him".

Read the full story here.

The 10 rules of Sam Walton

The 10 Rules of Sam Walton:

Rule # 1 COMMIT to achieving success and always be passionate

Rule #2 SHARE your success with those who have helped you

Rule #3 MOTIVATE yourself and others to achieve your dreams

Rule #4 COMMUNICATE with people and show you care

Rule #5 APPRECIATE and recognize people for their effort and results

Rule #6 CELEBRATE your own and other's accomplishments

Rule #7 LISTEN to others and learn from their ideas

Rule #8 EXCEED EXPECTATIONS of customers and others

Rule #9 CONTROL EXPENSES and save your way to prosperity

Rule #10 SWIM UPSTREAM, be different, and challenge the status quo

Mr. Sam followed his rules with passion, rarely deviating from them throughout his life. Each of Sam's 10 Rules is easily understandable by others and can be duplicated by others in their own businesses and personal lives. They do require a high degree of commitment and discipline to successfully implement. Oftentimes it is the breakdown in the execution of personal success strategies like Sam Walton's, not the strategies themselves, which lead to failures. To understand the 10 rules is to understand Mr. Sam's coaching playbook. Entwined in each of his rules are reoccurring themes about leadership, innovation, commonsense, hard work, simplification, the power of positive thinking, and how to treat people. This is why his 10 rules for success and “The Sam Walton Way” are so widely adaptable and applicable for just about anyone.

Extracted from What Can You Learn From “The Sam Walton Way?” by Michael Bergdahl, International Speaker

Retail in 2010

Most retailers in the UAE expect reasonable growth in 2010, according to a new survey. Almost a year ater the financila crisis hit Dubai and after having seen sales drop significantly, 94% of the retailers polled by Emirates Business said that the sector would grow in 2010. Of those, more than half of the retail giants questioned (55.5 percent), said the growth would be between five and 10 percent, the paper reported on Wednesday.

Almost 28 percent said they believed growth would be between 11-20 percent, and 11 percent said they were upbeat and put growth between 21-30 percent.Only five percent said they believed there would be no growth at all next year.

Read the Emirates Business 24-7 report here

"The financial crisis has not really had an adverse effect in the Middle East and other Gulf countries. We, being a homegrown brand, have done quite well as we cater mainly to the local population. As for the international brands, a huge portion of tourist population comprises its customer base and with the fall in tourism, the sales for international brands are bound to decline," - Mohamad Iqbal Yacoobali, General Manager, Shoe Mart.