Retail sales strategies: manipulation or magic?
Retailers employ different strategies to boost sales and profits. The three listed below are interesting for different reasons, but they do raise an interesting ethical dilemma.
Zara (Spanish retailer) turns its stock over every three to four weeks, and new clothes arrive twice a week. Researchers suggest that this quick turn strategy is designed boost profits by an average of 67 percent. The premise of this strategy is that by creating artificial scarcity, consumers are more likely to buy NOW, rather than wait two weeks because the merchandise just won’t be there.
Palmer (writing for http://www.usnews.com) has also cited a few studies that highlight the effectiveness of using sweet scents to lure customers into a store.
Sony Style stores use a sweetish scent (citrus base with vanilla overtones) and Westin hotels use an earthy, musky scent called White Tea. (Spangenberg, found that certain scents—Rose Maroc in men’s clothing stores and vanilla in women’s—increased shopping time, number of items purchased, and amount spent).
Music also has an effect on sales. Maureen Morrin, associate professor of marketing at Rutgers University, found that people who make unplanned purchases tend to buy more in the presence of pleasant background music. (Interestingly, scent and music together decreased spending).
All of this is old hat theory to most retailers. Not that many retailers who don’t actually deal in fragrance or music, ever use it proactively.
The interesting question is whether such tactics are ethical? Is it simply about creating a great shopping environment, or does it border on psychological manipulation? What would consumers do/ think if they knew? When does sell+tell become covert psychological manipulation?
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@Ted I agree – great retailing. But I also think there is a point where stockturns can be too fast? What about the long-term affect of retailers (unintentionally) educating the customer that if you miss out today, there will be something else tomorrow?
The Zara strategy is classic retailing in many aspects. It mirrors the strategies of many “market retailer” of the past, who bought open market goods close to the vest and turned them quickly, usually with very sharp prices. Zara does that with full -margin fashion goods by creating a sense of urgency among their customers; ‘buy now or it will be gone, and you better come back next week to see what’s new.” It’s very hard not to succeed in retail if you’re turning goods as fast as Zara does.
To Richard@ bestmart.info
I think it is pretty rich of you to appropriate a blog post for your own site on the presumption that it would be OK with us. Whilst this is the editor’s final decision, it is a practice that I abhor.
I make my living training people how to ‘manipulate’ a situation @Harald.
And the way I see it is that there IS a line: when something is not in the interest of the customer but only for the store, the line is crossed. So a nice aroma (good for the customer) that increases sales is OK with me too…
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Using scent in retail is not unethical at all.
The goal is to create a pleasant environment that a consumer/shopper can enjoy. Which makes him stay longer and, voila, chances are she going to buy something while she is there.
First, if there were a scent that guarantees sales of a certain product we’d be rich
So we can create the environment, the canvas, but what matters a lot is the skill of the salespeople, merchandising, the design of the store. Second, there are hundreds of books, seminars and classes you can take to learn sales skills. That kind of training is not considered unethical, is it?
Harald