People shop for a multitude of reasons, it’s no longer as straightforward as they need to make a purchase to fulfill a need, or meet a demand. People shop because they’re happy /sad/ bored/ stressed/ anxious, any number of feelings they seek a distraction to. A US study published in the journal of Psychology and Marketing found 63% of shoppers said they had made a purchase in order to cheer themselves up, and 28% had bought something as a form of celebration. If you can create the right atmosphere to appeal to your demographic, while employing a little psychology, you can unconsciously manipulate consumer behaviour to encourage shoppers to stay in your business for longer and spend more money.
Building the right environment
95% of our decisions are made unconsciously. Big retailers having been attempting to tap into these thoughts for years through the world they present to us on the shop floor. Sights sounds and smells are all employed to engage the senses, spark memories or distract us from our daily grind with the intention of persuading us to part with our cash.
This technique has been used as far backs as the 1980’s when Ronald Milman conducted a study which found the speed of music played in a supermarket had a tangible effect of expenditure; slow music increased spend by 39.2%. Retailers such Abercrombie & Fitch, renowned for their loud music, dark stores and impossibly attractive staff design this environment specifically to attract youthful consumers and repel older ones. Additionally loud, fast music has been found to encourage consumers to make rash purchase decisions, meaning shoppers are prone to buying more expensive brands, making less considerations before heading to the till.
These techniques are also about forging brand identity. Canadian company, Mood media are responsible for perfuming some of our favourite brands so subtly you may never have noticed. They pump in smells for huge companies such as Timberland, Habitat and fashion chain Guess. The purpose of this is so each shop smells appealing to customers, but predominantly so all their retail outlets smell the same. Much in the same way the lighting, layout, and product range will be identical in each store, having the same scent creates continuity which contributes to building the brand.
These methods need not be reserved for corporate chains. Small retailers can utilise these techniques to garner the same effects without huge cost commitments. Questions you should be asking yourself largely revolve around your target demographic. Who are you trying to appeal to and what sensory environment will encourage them to stay in your shop for longer?
Musically-what emotions does your playlist convey? Consider the tempo and style of your music. This is important when defining who you want your brand to appeal to. Similarly, what does your shop currently smell like? Is it appealing? If there is a branded scent you’d like to employ in your shop? If so, what memories and emotions does it evoke? Visually, there are many considerations to make, from the general layout and presentation of your store to your marketing imagery and branding. Build and present images your demographic aspires to that will accurately reflect your brand’s ideals.
The psychology of a bargain
Another surefire way to appeal to a retail therapy shopper is through their love of a bargain. Tempting consumers through price reductions works on multiple levels. Sales inspire a fear of missing out among consumers, which enhances the emotional reaction to the event. This encourages people to buy things they didn’t know they needed until it was reduced. This in turn inspires an element of competition. Shoppers are competing against one another to get the best bargains.
Pricing structures can have a strong effect on how shoppers perceive your products. Price is often used as a means for measuring value. If you have two items, one priced at £75 and one priced at £150, if the more expensive item is then reduced to £100 people will perceive this item the better deal, despite the sale price being more expensive than the standard RRP item. Sales shift the focus on saving rather than spending, meaning customers are prepared to spend more. Consumer psychologist Dr Dimitri Tsivrikos explains, “When we are excited by a bargain, this interferes with your ability to clearly judge.” This makes sales, price reductions and buy one get one free offers prime opportunity to get customers spending.
Retailers also utilise the compromise price effect. This is a means of persuading customers to purchase premium items by placing it next to a very similar item at an inflated price. The customer opts for the less expensive item believing they’ve got a good deal, despite spending a small fortune on a singular item. This technique is often employed in electrical stores selling high-end tech such as computers or cameras, but can be applied to anything.
The oldest trick in the book is the use of 99p pricing, and yet it seems to be as effective as ever. Dr Jane Price, lecturer in psychology at the University of Glamorgan believes it’s because consumers put numbers into categories rather than focusing their real value, such as under £5 or over £10 for example. There's also the additional emotional incentive that they feel they are getting a better value deal. A french study supported this theory selling pizzas at €7.99 and €8. The 99p effect heralded a 15% increase in sales.
The soft sell
Consumers also make purchases as a means to reward themselves. The emotion of feeling like you deserve something encourages you to buy products, removing the guilt associated with spending money. Advertising slogans positioned near key products can help to boost sales of these items. Highlighting the consumer's efforts and providing a justification for buying encourages reward based purchase behaviours. Use of slogans “Go on, you deserve it…” “Why not?” is an effective way of motivating this.
Product placement is also a means of encouraging spend. Placing key items near the point of purchase is one of the most effective ways to increase your spend per head thanks to consumer impulsivity. There are several ways to rouse shopper curiosity on route to the checkout. Consider having display stands intersect the path on the way to the till. This will draw attention to products they’ve missed. Having strategically placed dump bins encourages shoppers to riffle through in search of products they didn't know they needed until they were stood at the till.
Additionally upselling and cross-selling is a good way to generate income from impulsive shoppers. Offer upgrades or other items that will compliment their purchase. Do they need batteries for that electronic item? Protection spray for their shoes? Matching eyeshadow with that lipstick? There’s an unlimited combination of products that can be grouped together to appeal to a shopper indulging in a spot of retail therapy.