Imagine you are standing in aisle looking for a box of chocolates to buy. You don’t know exactly what you’re looking for, but you’ll know it when you see it. How would you prefer the category be sectioned or “blocked” out on the shelf, vertically or horizontally? What would make it easier for you to find your perfect box of chocolates?
According to the latest shopper research, horizontal product blocking is the best option for shoppers in the majority of cases. You might be wondering “why does it matter?” well it’s because of how our brains and bodies have developed. We have two eyes that sit side by side in our heads, meaning that we have better horizontal view than we do vertical. This means it’s easier for us to scan shelves horizontally than vertically, something confirmed in research conducted by Xiaoyan Deng, Barbara E. Kahn, H. Rao Unnava, and Hyojin Lee.
The researchers analysed how horizontal, continuous displays versus vertical displays of alternative products influenced range processing, perceived variety, and subsequent choice. They concluded that horizontal displays are easier to process because of a match between the human binocular vision field (which is horizontal in direction) and the dominant direction of eye movements required for processing horizontal displays.
They also identified that horizontal blocking allows people to browse information more efficiently, which improves mental processing fluency, increases their perception of a wide assortment and ultimately leads to more products being bought.
Horizontal displays are not always preferable however. When shoppers browse horizontally blocked displays they are able to process variety and choice far more effectively, in these instances shoppers find choosing easier and have a higher level of satisfaction and confidence about their purchase decisions.
But what if variety isn’t a positive for that product category? For example, when you’re looking for your favourite brand of hot sauce or mayonnaise?
In situations such as this, vertical blocking actually becomes preferable. The vertical cut-off points created by the end of category blocks increase preferred product visibility – more of the product category can be viewed from one place and specific products are easier to find. So blocking definitely isn’t a case of one size fits all.
Product categories that are regular shopper destinations and “Grab & Go” in nature should be blocked vertically. However, categories that account for a more considered and browse focused shopping experience should be blocked horizontally.
How do you know whether a category is more considered or more Grab & Go? The answer: analyse actual shopping behaviour at the fixture!
For example, here at SBXL we segment shoppers by behaviour: Grab & Go, Considered, along with Experiential, Impulse and Inexperienced too. Each of these modes is determinable by behaviour alone, no subjective shopper interview responses or flimsy, algorithm based formulae; just indisputable, actual behaviour of real shoppers genuinely shopping.
In conclusion, when you want shoppers to browse the category and perceive that there is a wide range, then go for horizontal blocking. But when you want to optimise shopping efficiency by making frequently repeat purchased brands easier to find, then opt for vertical blocking. It’s that simple.
Black Friday, the biggest shopping day of the year, is almost here. Falling on November 24th this year, retailers have been strong to encourage participation in the forthcoming sales. Emails promoting early offers and temporary in-store displays promoting savings are two ways retailers communicate their offers with potential shoppers.
While we can’t predict exactly what will happen this year, in 2016 over the four days between Black Friday and Cyber Monday Britons spent a record £5.8 billion according to The Centre for Retail Research. Though Black Friday shoppers are often depicted as frantic customers, waiting hours before tackling each other for discounted electronics, the psychological reasons for partaking aren’t quite so crazy.
How information is presented to an individual can drastically affect judgments and decision making. This is a concept known as the Framing Effect, where people can reach different conclusions based on how information or a question is presented. Positive frames tend to elicit positive feelings and result in risk taking behaviour. Through the media, Black Friday has been glorified as the best day of the year to shop, associated with huge price cuts not to be missed. When exposed to this positive frame shoppers are more likely to be proactive buyers when sales are started.
Retailers work months in advance to create the perfect advertising campaigns for Black Friday. Teasing offers months in advance and forecasting exact deal dates increases anticipation leading to a stronger desire to purchase. Early anticipation for a positively associated event increases the release of dopamine, a pleasurable reward chemical that will keep shoppers on the edge of their seat!
Likewise, when deals are released, the brains reward system kicks in. Instinctually when we see a sale we’re rewarded with feelings of pleasure and satisfaction because really, who doesn’t love to save money?
Going, going, gone
A key focus of Black Friday is the emphasis on the limited opportunity shoppers have to buy. Why? Because scarcity increases desirability. When an object is scarce humans assume its value is higher. Online deals during Black Friday accomplish this particularly well. Displaying how much stock has gone along with how much is left creates a real sense of urgency.
Commonly referred to as The Fear of Missing Out, the motivation to avoid losses has been shown as more effective than a desire to gain. During Black Friday, visibly seeing what products have already gone coupled with the looming deadline to buy before the day’s end directly targets human beings’ instinctual preference to avoid losses.
The allure of Black Friday bargains speaks to human nature. The build-up to limited time offers drives people to impulsively buy. Keeping a clear head amongst the masses is key to grabbing a real bargain. It will be interesting to see how Black Friday evolves this year. Not only to see the change in spending but also if retailers are able to get shoppers off the computer and into the store.
It’s a simple concept really – everything for £1. Discount stores are becoming increasingly recognised, broadening their appeal to even the richest AB demographic. How exactly can a store offering products at just a pound continue to profit?
Although today pound shops are still known to sell some unusual products, the similarities to any other conventional supermarket is ever growing. Aisles are arranged in a logical order, food and drink to go are available in the nearby fridge, seasonal specials change as in other stores and well known branded products are piled high throughout.
‘It’s only a pound’
When the price is merely a pound, we feel confident in the price and in control of our purchases. You pick up 5 items so know you’ve spent five pounds.
Entering discount shops creates an environment of cheapness, shoppers flock through the doors into an area where everything seems affordable and relax knowing they can afford anything. Studies have shown this triggers chemicals in the brain that create a happy feeling, in turn they are more likely to spend more.
The Perfect Illusion?
It’s virtually impossible to walk through a pound shop without seeing offer after offer. The packaging itself screams a bargain. Get an extra chocolate bar in this pack for free or 50 percent more in this bottle – all to create an illusion of a big saving. Although you may only go in for one item, the vast offers can trigger costly additions to the planned budget. In fact, nearly a third of sales in pound shops come from impulsive buys.
Putting well known branded products at the front of the store creates a feeling of trust and encourages shoppers to enter. It’s almost like they’re entering a normal supermarket, just cheaper. However, as shoppers find themselves deeper in the shop, products found are often “phantom brands” – essentially own-brand products that do not feature the discounters name. Through phantom brands, the discounter avoids potential negative assumptions over quality and adds to the impression of getting a brand at a bargain.
More for Less or Less for More?
Although we feel like we’re getting a great deal, this isn’t always the case. Remember discounters have their own special pack sizes which could see you getting less for your money. That’s not to say pound shops are intentionally misleading shoppers, the size is clearly printed on its products. Nevertheless, shoppers often don’t realise they are buying a smaller version and unwittingly pay more for less.
The pricing strategy to ‘Pile ’em high, sell ’em cheap’ has made its mark in discount retailers everywhere. Consumers spend more than they plan to, impulsively grabbing what they consider to be a bargain. While the one bargain you may set out for is offset by the 7 other items you pick up, discounters are still increasing in profit and continuing to grow ever more popular with shoppers.
Spooky to think it’s already that time of year. Moving ahead of valentine’s day Halloween has become the third largest holiday for retailers, behind Christmas and Easter. To put the growth into perspective the £12 million spend in 2001 increased to roughly £310 million in 2016 (Mintel), but what’s the reason for the growth?
It’s not the price of your product that determines how many people buy it… Rather it’s the price of the other products shoppers see before making their choice!
The perceived value of any product has a lot to do with a psychological principle called anchoring. With anchoring, the first number you see influences any number you see after it.
For example, if you see a bulk display of bourbon whiskey in the supermarket, with each bottle priced at £14.99, and a nearby bottle with a price of £29.99 – then the latter is considered very expensive. However, if the £29.99 bottle is seen in context with a £59.99 bottle then the same bottle of whiskey is seen as much better value.
Anchoring offers and incredible opportunity for brands and retailers. During standard decision-making, shoppers rely heavily on reference prices and other data as comparison points for future purchases.
This process plays an important role on how we understand and assess the price of products – both in brick and motor stores and online. Psychological anchoring is especially applicable to goods that we are either unfamiliar with or where price is less important as to the final purchasing decision.
Imagine that you are buying a new car for £30,000. Then paying a further £230 for a cup holder so you have somewhere to put your coffee while you drive – seems reasonable. But what if you went to your favourite coffee place and paid £2.60 for a skinny latte and they tried to sell you the same cup holder at the same £230 price? In one situation, the costs seem reasonable – in the other it’s incredibly expensive.
Psychological anchoring doesn’t only apply to cost – it can influence wide range of perceptions, including whether an item is good or bad quality or healthy or unhealthy. Anchoring can even dictate as to whether we buy a product at all given the circumstances. You wouldn’t pay £1.50 for a 330ml can of soft drink in a supermarket, but while at a rock concert – with it’s expected increased drink costs – the same price is a bargain. This latter example shows just how powerful a simple anchor can be in influencing our perception of value, and certainly undermines the notion that decision makers are perfectly rational beings.
When it comes to buying groceries, research suggests that we use similar goods as our anchor points. For example, when buying a jar of coffee, we tend to look at the prices of a selection of products to help us work out what price represent good or bad value.
Psychological anchoring causes a strange problem when it comes to the release of entirely new products. Consumers have no point of reference and so aren’t sure what an item is really worth. Brands can take advantage of this and can actually dictate the initial anchor price themselves – often by setting a high anchor price, so that subsequent discounts and special offers make the item appear more of a bargain.
Concepts like psychological anchoring highlight the importance of psychology and behavioural economics within retail. Ask yourself, are you considering engaging a psychologist or a behavioural economist?
When determining how much to charge for our products, we should let psychology and behavioural economics help us. Shoppers don’t see items on a spreadsheet, they see them in-store and online next to other similar products and brands. And it is there and then that they anchor themselves to a perceived value and reference price. With that in mind, how appealing do your products really look?
To find out more about what you can gain from behavioural and psychological shopper insights, talk to our experts on 01543 255 259 or email email@example.com.
Payment technology have more of an effect on people’s economic behaviour than we may expect. What you buy is surprisingly dependent on how you pay for it and how you pay for it can have a detrimental impact on spending habits.
Contactless payments and mobile wallets like Apple pay are threatening the concept of cash entirely. As once paper notes replaced metal coins and electronic banking reduced the need for cheques, contactless payments are now doing the same to cash. If they do succeed in replacing cash payments it could mean a huge change in shopper transaction.
The pain of paying
The benefits are obvious. To shoppers, convenience is key. There’s no need for stacks of cash or a purse full of jingling change. What’s more convenient than paying with a mobile device glued to peoples’ hand, or waving a card and being done with it?
In today’s society, we have instant access to such an extensive array of services and information. People have become accustomed to quick service with immediate results. Contactless payments have understood this and provide the instant gratification humans crave and removing some commerce barriers, making it easier and faster to get what you want.
There’s also a security with contactless that cash doesn’t have. if cash is stolen it’s gone but if a card is stolen a simple phone call to the bank will fix the problem. This security gives the shopper minimal liability.
Overall, the experience itself is a less painful one. Literally handing over a material object has a very different psychological effect than waving a contactless card. The “tangibility of notes and coins creates awareness (conscious/unconscious) that something of value is being exchanged”. Contactless cards and Apple pay are such transparent ways of paying, to the shopper it’s virtually like playing with monopoly money. People don’t feel the immediate loss of money, it just doesn’t seem like a ‘real’ transaction. It’s essentially guaranteed that if you were to ask someone how much they spent via contactless when leaving the shop, they couldn’t tell you.
While people do spend more with cards over cash, they also reach for contactless to pay for even the smallest of purchases our spare change would once have covered. A coffee to go, a bottle of water, even a pack of gum. These small amounts individually may not amount to much but collectively cashless payments could drive society into a state of over consumption, little by little. Impulsive and frivolous spending would increase because the less you think about the purchase, the more likely you are to make the purchase.
So, would a world without cash be all that great? A world where every payment made would be traceable, what you buy, when and where you buy it. A world with over consumption and possible debt?
If you’d like to hear more, we’d love to chat. Contact us on +44 (0)1543 255 259 or email us at firstname.lastname@example.org
The long-awaited iPhone 8 was officially launched Tuesday (September 12) along with an iPhone 8 Plus and the premium iPhone X. Arriving on the iPhone’s 10th anniversary, the smartphone is an upgrade on the iPhone 7 with added features we’ve not seen before.
Last year, fans queued up outside Apple stores five days ahead of the release date. This year a man was spotted camping 10 days ahead. Seeing fans camped outside Apple stores is nothing new, it’s happened every year since the first iPhone launch in 2007. Apple have an immense following and rumour of a new product triggers intense anticipation.
But have you ever wondered why Apple is so successful? Why do people go to extreme lengths for a smartphone? Apple most definitely weren’t the first to invent a portable music device, tablet or smartphone. Yet Apple have a brand loyal following like no other.
So how do they do it?
The want factor
Research has shown people often favour a perceived upgrade without first evaluating the one they currently have. This is a phenomenon known as “comparison neglect” and the launch of the iPhone is the perfect example. The concept is strongly associated with another, known as “planned obsolescence”, where products are produced with a deliberately short lifespan. As soon as a newer version of the product becomes available, the old edition quickly become obsolete.
Are Apple guilty? On a two-year release plan, it’s hard for someone to purchase a new edition before rumours of an upgrade circulate. Along with such swift cycles, the differences are becoming somewhat less apparent. Yet people still throw their money down.
Apple make a notable example and it’s easy to point out the cycle at work, but other manufacturers are just as guilty. Companies’ long term strategies are to keep things fresh and retain long term shoppers. If their products didn’t change and update there would be little room for company growth. Nonetheless, the customer certainly doesn’t have to buy an updated iPhone, or even get a smartphone in the first place. So why do we choose to take a bite out of Apple again and again? It’s more than just manufacturer manipulation.
Evolution – From the seed to Apple
Most people like to believe they make decisions based on rational analysis of available options. However, it’s not so simple. Emotions are hugely influential and in many cases determine our decisions. Cost vs brand name for example. Emotions are the reason we decide to pay more for a brand name even though there are cheaper alternatives.
It’s well documented that emotions are influential in shopping behaviour. Research conducted by the Advertising Research Foundation concluded that the emotion of “likeability” is the measure most predictive of whether an advertisement will increase a brand’s sales. Consequently, Apple have gone beyond just the practical service the iPhone offers. Delving into the far more important emotional connection loyal customers have. Simply put, the richer the emotional content and association, the more likely brands will hold on to that shopper loyalty.
Possibly the most important function of emotion is survival. It’s human nature to choose between fight or flight to ensure self-preservation. In modern society it’s unlikely we will be faced with fighting off vicious wild animals or fleeing from a raging river. More likely, in society today being left out is enough to activate the fight or flight response. “Fear of missing out” (FOMO) can cause physiological stress, not having vital information, and not feeling part of the group is not a feeling people seek out. Some people will double their efforts to actively avoid the feeling of missing out. This insecurity, coupled with aggressive social media, causes us to crave the latest technology. Additionally, through evolution our brains have been wired to meet needs like security and social status. When we’re rewarded with an upgraded phone for example, dopamine is released reinforcing our behaviour and can lead to addiction.
Clearly then, when it comes to continuous phone upgrades there are several factors at play. Whether we buy based on our ancestors before us, or are tempted by recently discovered psychological prompts, there’s no doubt Apple have established a well-structured strategy. Setting an almost impossible precedent to match.
We’d love to hear your thoughts. Are you planning to get the new releases? Do you feel Apple is forcing people into buying upgrades? Get in touch on 01543 255 259 or email email@example.com.
Amidst the joys of summer, it’s hard to think about the looming date of returning to school, but summer is now winding down and that day is fast approaching. As with most holiday seasons, Mother’s Day, Easter and New Year’s for example, retailers are pushing promotions earlier and earlier to secure market share. For the back to school season, some retailers were reeling out their back to school promotions as early as late June.
Listed alongside various other holidays, the back to school season may seem like an odd period for retailers to make effort with. However, looking closer, it’s easy to see the value and opportunity the market holds. School shopping is in fact a big business with pens, folders, bags, gadgets and uniforms being just a few examples of items on everyone’s list. The US back to school market alone is set to grow 14.8% to $74.03 billion in 2017.
Although these back to school supplies are often due to practical needs, needing bigger size shoes for example, there are also underlying psychological needs from both children and parents alike. When we think of the new school year there are various associated emotions. Excitement and anticipation yes, but also anxiety, fear, sadness and stress. Getting new clothes and supplies is often used to raise confidence and increase levels of happiness and excitement.
If an individual is feeling anxious, decisions are often made to avoid perceived threats. When shopping for school for example, the threat of not having what you need or being the only one without the latest trend may be enough to encourage spending. Known as risk or loss aversion in behavioural economics, it’s the idea that people are more worried about losses than gains. Retailers create this illusion by pushing promotions that may scare shoppers into buying for fear of missing out.
Through all this, it’s important to remember who the shopper really is, often that’s the parents.
Surely adults make rational decisions when it comes to shopping? Well in fact parents are just as susceptible to yielding to their psychological needs as their children. While children want to buy to stay connected to their peers, parents want to buy to stay connected to their children; to feel like they have more control when their apart. Using school shopping as a way to give themselves confidence in their child’s school environment, parents often over buy to be assured of their child’s happiness.
As true as when we buy anything, we think about when we might use it in the future. Perhaps parents picture their child on their first day, walking into class and setting on the table all the equipment they could need, perhaps for some, a little too much! Children picture making new friends, having the right clothes, fitting in and feeling included.
Getting school shopping done early is just another way for parents and students alike to feel confident and prepared.
Temperatures this summer may not have stayed where we’d like them to be, but in the UK the few heat waves saw sales for ice cream rise. Competition is high and numbers dwindling nevertheless, in an industry worth 1 billion pounds a year, ice cream vans are still on the streets.
As children, hearing the repetitive chimes of an ice cream van would cause overwhelming excitement. As adults, although the uncontrollable eagerness may have melted away, we are certainly still keen to queue up for an occasional treat.
Classical conditioning, a phenomenon discovered by Ivan Pavlov in his well-known dog experiment. We all know the one, ‘Pavlov’s dog’, involving an automatic response between a ringing bell and a salivating dog. There’s not a better real-world example than the chimes of an ice cream van. Regardless of the reward, dog food or ice cream; or the subject, dogs or children, the chimes are still there.
To children, the sound at first means nothing. Only after they get an ice cream or two will they gradually associate the noise with a reward. Though the association may be simple at first, when discussing adults, there’s more at play. Hearing the chimes transports us back to childhood. Running down the road to chase the van. Reaching up to take the ice cream from the hands belonging to a hero in your eyes. Even licking the melting ice cream off your fingers.
Our senses are incredibly powerful at transporting us to memories far forgotten, whether they’re good or bad, the more emotionally connected we are, the more likely we are to remember them. Ice cream is one of the most nostalgic foods, our ears picking up the chimes from streets away, undoubtedly the happy memories that come along side are a significant influencer to buy or not to buy.
On a sunny day, the biggest limitation of ice cream vans is the price. With a reputation of being expensive, it’s hard for owners to compete with big supermarkets when they can’t buy and sell the produce as cheaply.
Although price isn’t as important as once thought, trust is. Increasing the price of a 99p flake to £1.50 can be seen as a violation of trust and customer loyalty may be lost. Though all isn’t lost, there are advantages the ice cream van has over the supermarkets today. Alongside the important emotional connection, there are a few additional influencing factors worth a mention.
Would you believe there are rules ice cream van owners must adhere to? For example, the chime is to last no longer than 12 seconds and can only be played every 2 minutes. It’s also not allowed to be sounded before noon, or after 7pm. These rules are comparable a concept known as the fear of missing out in behavioural economics. The rule suggests people are more concerned with loses than gains, by this reasoning as the chimes get closer as the van nears, only to fade or stop completely, subconscious panic sets in that you may be missing your chance causing you to rush out in search.
Another advantage is the shear convenience. You’re outside in a park on a hot sunny day, a shop 10 minutes away or a van 10 metres away, what do you do? Most people would pick the van, not necessarily because people are lazy, but because convenience is efficient. In today’s society, people have instant access to a wide variety of services and information. People like quick, it’s a form of instant gratification and the need for it increases each day. Simply put, we value instant gratification over long term gain. Walking those 10 metres to be rewarded quickly outweighs walking 10 minutes for something cheaper.
It doesn’t need to be said that there is a lot of competition for sales. What makes the difference is appealing to the customers real desires. Whether they’d admit it or not, price certainly isn’t everything to the shopper. Decisions often aren’t logical, emotions and social factors are hugely influential. The field is only expanding, with more and more being understood regarding human and social factors in decision making.
We all know that the best shopper research takes place in-store, at the shelves, where the purchasing decisions are made. However, too many researchers focus only on the behaviour of existing category shoppers – those already buying their product.
If you really want to grow your market share – you need to focus on people who don’t buy your product, people who might not even be in the aisle! It’s these shoppers that you really need to convince.
Take chocolate and confectionary for example. According to our studies a typical supermarket welcomes 1,000 shoppers per hour. Of this number, 50 people visit the confectionary aisle, of which only 70% of them buy something – this means that only 35 people out of 1,000 will buy something from the confectionary aisle per hour.
Typical shopper research is conducted in one aisle – analysing just 5% of a store’s footfall. The real kicker is that those being researched are buying confectionary anyway! Too many brands are spending large sums of money to research those already buying from their category – rather than growing their shopper base.
Have you ever sat and thought about why people don’t buy your product? Rather than why they do?
A lot of non-customers are just customers-in-waiting and so there’s always a way to grab more people’s attention and gain their business – whether that’s through increasing your products visibility or by making changes to the product itself; introducing different sizes and types to fit holes in the market.
A great way to increase product visibility is by identifying the needs that your product meets. Then you can identify which other categories meet those same needs and display them nearby. Going back to chocolates, they could be paired with Flowers, Alcohol, Films, Health & Beauty, to name but a few.
Displaying a box of chocolates nearby any of these categories will more directly link them with other needs that consumers are looking to meet. With boxes of chocolates being hidden away with the Wine Gums and Popcorn, shoppers may not make the connection between buying a gift and a box of chocolates for example – they will however think of a bunch of flowers; especially as the flowers display is one of the first things you see in modern supermarkets. Displaying chocolates near the flower display creates that link for the shopper while also increasing product visibility – creating purchasing opportunities outside of the single confectionary category.
This issue isn’t unique to confectionary. There are many products that meet the same needs that are often displayed nowhere near each other, for example:
Potential solutions: Banana, Coffee, Energy Drink, Cereal Bar, etc.
Potential solutions: Vegetables, Whole Foods, Multi-Grain Cereal, Health Snacks, etc.
These sorts of insights can’t be learned from just staying within your own product category – shoppers don’t shop in just one aisle! You could spend your shopper research budget analysing existing category shoppers – searching for insights from existing customers only. Or you could link your brand to an occasion or need and the product will sell itself!
Shopper research agencies like SBXL can also provide much wider, multi-category competitive set insights, helping you deliver significantly more growth by increasing not just loyalty, but category penetration too.