The 5 Lessons
The program covered more than these 5 points, but I singled them out because I think they’re the most valuable to online companies.
1: Don’t try to get customers to stay longer
Some retailers assume more time in the store means more money in the cash register. “If we hide the milk in the back of the store,” they think, “then customers might pick up a few other items they didn’t realize they wanted.”
But Herb’s research shows that closing sales faster leads to more sales. That’s because customers pay with three things: money, time and angst. The more time a retailer wastes, the more expensive the trip feels to them.
2: Forget aisle 10!
Herb told us how one retailer did everything in its power to try to grow traffic to an aisle that customers neglected. They handed out coupons, installed a flashing red “police light,” had greeters point customers to the aisle, etc. At the end of it all, they were able to grow that aisle’s traffic by just 2%!
Don’t we all have a section of our business that’s as neglected by customers as that aisle was? So I asked Herb what should be done about it. His response was FORGET ABOUT AISLE 10! You’re better off looking at what’s working and growing it by 10% than moving heaven and earth trying to get the part that’s not working to take off.
3. Forget about what YOU want customers to do
Herb told a story of an award-winning store that wanted its customers to come in from the left, so they made their right door hard to reach. When the store opened, customers were so determined to proceed the way they were comfortable, that even though they entered from the left, they cut through the front of the store to shop the way they wanted.
That was unacceptable to the store’s managers, so they put several pallet displays in the front to keep customers from going right and force them in the direction the store envisioned. Instead of changing course, customers started struggling to maneuver their carts around the pallets.
Successful retailers don’t try to direct traffic. They design stores to fit customers’ existing behavior.
4. Watch your customers shop
I asked Herb why his company watches customers as they shop instead of simply testing promotions and measuring their results on the bottom line. He gave me an example of a lady that his company watched struggle to get an item off the top shelf of a store. The revenues for the day might show that as a successful sale, since she bought the item, but to her, the experience was a failure. And if it’s not fixed, she might not return to the store. And others, who might not be willing to struggle, won’t buy the item.
5. If they buy virtue, offer vice
In the program, Herb talked about “licensing” behavior, where a customer who added a virtuous product to her shopping cart — like broccoli or tofu — might feel she has license to add a vice product — like ice cream or cake. This has tremendous implications for how products are placed along the path a customer takes through the store.
To sell items customers might feel guilty buying, retailers might offer virtuous items first.
Full program includes
– Where supermarkets make their real money. (It’s not what you expect.) And what that can teach YOU about diversifying your company’s revenue.
– How YOU can profit from “the long tail” and “the big head.”
– Why giving your customers more, might mean YOU will earn less.