Archive for November 22nd, 2011

Will retailers that open on Thanksgiving nite score with Xmas shoppers?

November 22, 2011

That’s the question I was asked by a reporter from the Washington Post yesterday

Here’s what I told her:

In general, Christmas shoppers operate against some sort of Xmas spending budget. That’s called a budget effect.

The budget may be conscious or subconscious — it can be explicit (written down in detail) or vague (e.g. spend no more than some amount).

A shopper’s budget typically has some stretch to it, especially if times are good. But, there is likely to be little or no budget stretch in tough times (like now).

One impact of early openings on retailers is a shopping days effect.

You might expect shoppers to expend their full budgets regardless of the number of shopping days available to them. That is, they’ll spend their budgeted amount whether there are 30 shopping days or 32 shopping days until Christmas. It doesn’t always work that way. There is some evidence that some money may end up left in shoppers pockets if they don’t have enough convenient opportunities to spend it.

So, added shopping days — or a part of a shopping day — tends to insure that consumers spend more (or all) of their budget.

The biggest impact on retailers is the market share effect.

Given the budget effect, retailers are fighting for a share of holiday spending budgets that are essentially fixed.

So, it’s to retailers’ individual advantage to get a first mover effect. That is, to have people spend money with them first, perhaps leaving less budget available for competitors.

The bottom line is that overall, sales may increase very slightly since shoppers have an extra opportunity to spend (the shopping days effect).

More important, this year, retailers that open on Thanksgiving night are likely gain share by getting into shoppers wallets sooner than their competitors, making sure that they get their fair share and maybe a little more.

Next year, market shares will likely reset as competitors follow suit and open earlier.

* * * * *

Side note: Many of the retailers opening on Thanksgiving are considered low-end merchants. Think Walmart. Higher-end retailers might tarnish their images by participating in T-day openings.

Let’s see what makes it into print …

>> Latest Posts

Tags:
Posted in Retailing | 2 Comments »

Deep thoughts: PepsiCo plays on our “neurological preferences” … uh-oh!

November 22, 2011

TakeAway: PepsiCo is learning how consumer psychology influences in-store shopping behavior. With these insights, PepsiCo has adjusted the shopping experience – the shape of end caps, design of advertising circulars – to appeal to the differences between male and female shoppers …

* * * * *
Excerpted from cpgmatters.com, “Understanding Consumer Psychology Helps PepsiCo Improve Marketing and Display Tactics in Stores”

So far, PepsiCo’s research has unveiled three key learnings:

  1. The importance of the shopper’s unconscious
  2. Men and women respond differently
  3. Psychology influences behavior across the shopping cycle

PepsiCo’s goal is to understand the unconscious, engage both genders effectively, and develop best practices to ensure that its brands apply what they learn throughout the shopping process …

Take the importance of curvilinear merchandising … PepsiCo’s Frito-Lay brand is using more rounded fixturing in the store, including the configuration aisles and end caps.

“What we’ve found is a neurological preference toward rounded edges,” Michelle Adams, PepsiCo’s VP of customer strategy and shopper insights said. “Innately, humans avoid sharp edges and objects, and hot stoves. It’s a piece of who we are that we never really realized was going on, but is going on subconsciously.”

A design principle that appeals more to the female mind than male is scattering elements in, say a printed circular. “The more you break things up, the more females like it,” Adams said. “Whereas the male brain will gravitate toward the linear, toward block designs, the female brain will go toward angles and curves and different fonts.”

Another key point of differentiation between male and female shoppers is their reaction to “causes” in marketing, merchandising and packaging. Breast cancer and “sustainability” are particularly attractive causes to women.

“It’s not that appealing to sustainability will shut men down,” Adams said. “It just doesn’t get their attention. Men are about assuring that they’ve got the right brands and flavors, that this brand is for him and his family. The other thing is they want assurances around taste.”

Another area where men and women diverge is in the importance of all-natural products to them. However, overall shopper preference for better-for-you snacks has become important enough to Frito-Lay that it has influenced how the brand arranges its shelf space in supermarkets – typically in the front of the aisle and its more conventional products toward the back.

PepsiCo also rallies especially to the concerns of women with back-to-school “solutions” merchandising. “Our angle around back-to-school is to provide easy solutions to the problems that mom has,” Adams said. For instance, Frito-Lay promotes multi-packs of single-serve packages of chips that are handy for school lunches.

“We try to create sections in the store saying to moms: ‘Here’s your lunch solution, your dinner solution and your big-game event solution,’” Adams explained. “And with the brands we have, we can do that. It’s the advantage that PepsiCo has.”

Adams said that PepsiCo brands already have incorporated design changes in circulars based on psychological insights and already have been able to log greater engagement with consumers because of them …

Edit by KJM.

>> Latest Posts

Tags:, ,
Posted in Mktg - Consumer Behavior, Mktg - Consumer Psychology | Leave a Comment »