Retail Marketing Strategy: Shopper Emotion is a Priority
9th December 2015 | Constant Berkhout
Constant Berkhout, author of Retail Marketing Strategy: Delivering Shopper Delight, was recently interviewed by Store Check Magazine, discussing how retailers should put the customer at the centre of the business to remain ahead of competition on the high street while fending off online competition as well. The original interview, published in Dutch on the StoreCheck website, can be found here.
What is the premise of your book?
Berkhout: It’s the idea that we urgently need to look at retail issues from the standpoint of the consumer. In recent years, retailers have made much progress in terms of scale. Their use of in-store execution has improved significantly: they know their products well and where they have to present them in the store. But in the future that won’t be enough – soon the shopper will have all of the strings in their hands, including the fact that there are now so many shopping channels.
How can retailers be successful?
Berkhout: They must be simultaneously active in multiple channels. Secondly, they must make the crucial decisions based on facts and evidence, and certainly no longer based on gut feeling. Thirdly, it is essential to consider effective shoppers as people whose emotions should count in the decisions of the retailer. For example, if a new investment is considered, the first questions should not be ‘what will it cost’ or ‘what will the financial benefits for be’. From now on, the shopkeeper must think how this investment can affect the experience of the shopper, i.e. will it make him or her happier?
One of the least enjoyable experiences for the shopper is paying. How can a retailer make it more enjoyable?
Berkhout: A smile or an extra service at the cash register can have a positive impact. If the cashier, for example, noted that a punnet of strawberries is dented and some of the fruit is bruised, they can send for a new punnet. Or imagine that a customer’s toddler needs the toilet – the most normal thing in the world – it would certainly give the shopper a good feeling to know that their child can use a specially equipped customer toilet.
How, ideally, should a retailer of the future deal with the phenomenon of impulse purchases?
Berkhout: Impulse purchases are a myth. Display manufacturers want us to believe that 7 out of 10 purchase decisions are made on the shop floor itself, but that’s not true. Shoppers generally rush through the store and see barely 2% of the offers in any detail. Shopping is, for the most part, routine behaviour. Look, in fact, a supermarket is a very complex environment for our brain. To consider on every product on the shelf is simply impossible. However, it is true that some categories are more impulse-driven than others, which you’d preferably position in the immediate vicinity of the checkout. That’s something that you need to consider when you install self-scanning checkouts.
To what extent should supermarkets employ scent marketing?
Berkhout: Actually, that’s also a myth. It’s not as if odours necessarily have an unconscious influence on our buying behaviour because they have a direct impact on our brain. The reality is a bit more complex. Odours must coincide perfectly with their environment to actually have an impact on unconscious shopper behaviour. In a fashion retailer like Abercrombie & Fitch it can certainly work, but in a supermarket it is less appropriate because there are so many categories together. Details also play a role. If the staff member at the till disrupts the whole area with the strong smell of perfume or aftershave, scent marketing can easily get lost in the fog.
Are retailers adequately willing to exchange data and to help each other out in that way?
Berkhout: I’ve learned that retailers are willing to do so in both the Netherlands and Belgium, but there are also those who deliberately don’t want to. Shopkeepers don’t have enough time and resources to delve into each category, so they could really use the help of their suppliers. On the other hand, they do not have to strive to develop a strategic partnership. For a (brand) supplier it’s logical that they consider one retailer ahead of another. It comes down to doing the right thing for every customer.
How can retailers deal with competition from e-commerce?
Berkhout: Successful providers of e-commerce manage to coordinate an enormous range for the individual shopper. For the average mainstream retailer this is a lot more difficult, partly because it’s now almost impossible to know each customer personally. An exception to the rule is the Finnish chain, Kesko. They manage to tune the product range in each store to local needs, based on automated software. Basically, retailers can evolve into a range that is fixed for 85% and the remaining 15% can be adjusted based on big data. Of course that’s not as easy as it sounds.