By John Stanley
By John Stanley
The end of impulse?
As we move out of the recession, consumers have changed. Impulse is now not what they are looking for; shoppers now want information. Here's a look at the new consumer habits.
July 9, 2010 – As retailers we are brought up to believe that there are two types of buying modes: the consumer is either buying a purpose item or an impulse item. Our stores are then laid out strategically to encourage impulse sales, especially as impulse sales are often 60 per cent of total consumer expenditure in many retail operations and these products are often sold at a higher margin.
The recession loomed onto the scene and changed shopping habits. In a recession, impulse sales naturally decrease across the board and this was true of the recession we have just experienced.
As we move out of the recession, consumers have changed. Impulse is now not what they are looking for; they now want information. The game rules have now changed.
Having said that they want information, you may think that this is where your sales team come into their own. Sorry, this is not the case. Our own research in March 2010 indicated that 61.8 per cent of consumers believe product knowledge provided by salespeople has declined in the last five years. Consumers now rarely trust the advice being provided by salespeople.
Research published by David Evans, the CEO of SPOS Group and reported in the May 24th edition of Inside Retailing mentions that the information trend started in the U.S. and the customer wants it next to the product and does not want a salesperson to interrupt their shopping experience.
This means that we need to rethink through our whole merchandising strategy if we are to be in tune with the consumer and grow sales.
Providing information is a delicate balancing act. If you provide too much information you may confuse the consumer, provide too little and it implies you do not know what you are selling. The challenge is getting the balance right.
As a retailer you need to have an information strategy that helps the consumer as well as provides you with the retail high ground as the expert in your catchment area. In today's retail environment, the competition is not just other physical retailers, but online retailers as well.
So what steps can you take to own the high ground in the information stakes? Here's a look:
1. Have a signage strategy that tells the customer what the product is and provide three benefits and the price. This has been a golden rule of retailing for decades and still applies in the social media era.
2. Accept that in today's market, it is the manufacture of producer that is the real hero, not the salesperson. Introduce the supplier into the communications chain. The consumer now wants to know about the maker of the product not the seller. This is a complete turnaround in consumer thinking. They used to put most trust into the salesperson, now it is the producer who gets the credibility. This means you may want to place a picture of the producer next to the product or even details on the producers Facebook page or web page. The provider now needs to be a partner in the supply chain as far as the retailer is concerned. This will result in a whole new thinking process in supply chain management.
3. Leaflets on the product you are selling make sound like a dated idea, but in this information age there is a role for leaflets that explain about the product. These leaflets need to be positioned in holders next to the product.
4. We are in the information age. You may want to provide a YouTube link that explains how to use the product. You may want to place a TV monitor next to the product that explains the attributes of the product. You may wish to use a Q.C. bar code that can be linked to a web page and be downloaded onto the customer’s mobile phone.
5. Displays and merchandising are still important in the process, except the display needs to be more educational and tell the customer how they can use the product in their own home. It may be you have to link a number of products together to tell the story for the consumer.
6. Strategic communication is still part of the game rules, if you place information boards next to all the products on display it is going to confuse the consumer and they will soon get information overload. Decide what you want to sell at any one time, provide the information and rotate it on a regular basis. This will improve the knowledge base of your team, plus, the customer will be provided with a larger knowledge base as when they return you will be exposing them to new information and they are more likely to read and absorb it.
7. Research indicates that when consumers communicate through social media, sales go up. Therefore join in the social media conversation and get them to share their ideas on your social media pages as well. This gives you an opportunity to share knowledge with the consumer.
Is it the end of impulse?
Impulse sales will continue; they are a life blood of retailing. What has changed is the way people are buying impulse lines. It used to be if it looked good they would buy it. In today’s retail world, it is a case of if it looks good provide me with the knowledge and information I require to move from a "looker" to a "buyer".
The role of the salesperson will also change and salesperson make be the wrong language to use in the future. The consumer is now looking for reassurance from a salesperson. The sales patter of old sounds insincere to many consumers and they are most likely to switch off and tell the salesperson they are “just looking".
We are entering a new era of retailing and all retailers need to look at their present retail offer and question whether they are presenting the product in the right way for the new consumer.
John Stanley is WA
Entrepreneur of the Year 2009 and his business JSA is WA Small Business
Champion – Education 2009. He is an acclaimed conference speaker,
retail consultant and author. For more information on how he can help
your business grow, visit his resource-site www.johnstanleyretailguru.com.au or email