In a world where phrases such as ‘the retail apocalypse’ and ‘the death of the high street’ have become commonplace, shopping starts to sound like a bummer. But it’s possible for merchants to bring the fun back to the whole experience if they commit to understanding the psychology behind why we do it in the first place.
By knowing what makes consumers’ synapses tick, retailers can devise a potent formula to lure customers in—and get them to part with their hard-earned cash.
We generally enter a store for one of three reasons: to seek good value, to relish an enjoyable experience or for convenience. Now that e-commerce has largely removed the convenience factor, customers are either searching for a great deal or for something unique. The current retail landscape illustrates this point.
“The value market is growing hugely,” said Garrick Brown, a retail analyst at Cushman & Wakefield. “The U.S. has seen the arrival of 10,000 new dollar stores since 2011—a rate of nearly four a day—while really beautiful experimental stores in big cities are flourishing. It’s everything in the middle that is struggling. To survive, you need to be a discount or a luxury or lead experience store.”
The psychology of the bargain hunt has been well documented. Shoppers want to feel like they’re getting a deal, even when they know the store’s sale price is essentially their everyday price. Take J.C. Penney. The department store chain learned this the hard way. “When J.C. Penney had an overhaul and changed their business plan from offering discounts throughout the year to dropping their overall prices, their sales plummeted,” Brown said. “Why? Clothes cost the same as they had the year before, but the J.C. Penney customer was used to the thrill of getting a bargain and wasn’t happy.”
Ultimately, bargain shoppers need the serotonin rush that comes with a markdown.
For other shoppers, the emotional need is different.
As the number of renters living in ever-smaller apartments skyrockets, cities have turned into a millennial living room. These consumers are looking for something else, whether it’s entertainment, connection or distraction. Young shoppers are far more likely to linger—and therefore shop—in a beautiful, unique environment that offers more than just retail. Successful add-ons include juice bars, coffee shops, yoga studios and nail bars.
Ultimately though, to get shoppers to spend, you have to get them in the doors. Environmental psychologist and the founder of consulting company Envirosell, Paco Underhill says creating arresting window displays is part “art and science.”
“We know that there is a devil and angel in everyone’s head—the angel is saying ‘walk on by,’ but the devil is saying ‘wow, let’s check it out’. We need to get through to that devil,” he said.
Tapping into the voice that says “shop” starts with creating a vignette that speaks to the target consumer through lifestyle imagery: a Christmas party, an office environment or a beach vacation.
“We all still live in uniforms—be it the trendy work uniform of someone who writes for Vogue, the uniform of a corporate lawyer or a well-off mom on weekends,” said Underhill. “Make your window tell the story of their life—the importance is in all the little details—and they’ll come in.”
Once they’re inside, the focus is on getting them to try on a piece of clothing. The moment the customer has looked at themselves in the mirror wearing something, they feel an attachment to it that makes them far more likely to carry through to purchase than if they had merely picked it up on the shop floor. This is more likely to happen if moving from the racks to the changing room is seamless.
“One of the most important things that retailers often forget is where to leave someone,” Underhill said. “This is essential in increasing the conversion rate, as women in particular are far less likely to buy if they feel like they are being rushed.”
Underhill also says retailers can’t forget the shopping companions. Getting everyone in the frame of mind to shop is important, whether it’s the husband tagging along on a lingerie shopping trip or the girlfriends hanging out in the changing room at a department store.
And while the lighting and design of cabins has always been important, today changing rooms can be make or break. Clients spend 20 percent more time in changing rooms than they did a decade ago due to the advent of selfies, Snapchat and Instagram. Customers under 35 are now likely to share an image of themselves in a potential purchase online and wait for the responses before they buy.
“The bonus of this is that the client will spend more time in the piece of clothing…adjusting the lighting to get the perfect picture, waiting for the response and getting more attached to whatever it is they’re wearing,” Underhill said.
Another important factor in converting from browsing to shopping is the sales staff. Retail wages—if you allow for inflation—have declined by 30 percent since the 1980s, which means the levels of service have inevitably dropped off.
“I can see why, with sales as they are, brands just want to pay low wages. But a knowledgeable, friendly, committed sales staff—even if they cost more—is very important in the long term, as once a customer trusts the sales assistant, they are far more likely to buy,” Brown said.
Once we get to the till, the psychology behind plastic versus cash is also well-documented—much like using chips in a casino, buying items with a card or Apple Pay allows the customer to mildly disassociate from the act of paying.
But ultimately all these small adjustments are catering to one overall sensation: the buy high. “It’s all about the sense of adventure—whether that comes from a bargain hunt, or a treasure hunt for a unique piece of clothing,” Brown said. “Too many retailers have forgotten that it’s this sensation that motivates humans to shop at a primal level.”
To read more about what triggers shoppers to spend, read Sourcing Journal’s Consumers, Checkout & Creating Experiences That Resonate report.