What Entry Fee Would Shoppers Pay to Enter Your Store?
Imagine if there was a turnstile at the front of your store where the shopper had to pay a fee to enter. How much would they be prepared to pay? Whilst some retailers like Costco have an annual fee as a cost of entry as part of their strategy this hypothetical question is one all retailers should ask themselves on a regular basis. When I run Shopper Psychology training courses for the Boards of retailers all round the world this is the question they find most uncomfortable, yet it is fundamental to their success. Retailers expect shoppers to spend money to drive past alternative stores, expect shoppers to invest time to shop in the store that they could have spent elsewhere, but not all retailers reward the shopper for this cost of entry with an experience that was worth the visit. The experience in the original discount stores was so bad that the prices had to be low to effectively pay the shopper to come in and some higher priced retailers are delivering an experience that justifies this admission fee of paying more and are thriving. But many retailers who are not the cheapest in the market have lines of boring white shelves that offer no point of difference in terms of experience and are therefore not worth their admission fee meaning they face an uncertain future.
There is a myth that the retail of the future is all about ecommerce but this isn’t supported by the facts. JLL research recently reported in Forbes Magazine that there will be just over 4000 net new store openings in the USA this year, so even after all the high-profile bankruptcies there will be a larger number of additional stores available to shoppers. 78% of USA shoppers shop in stores the same amount or more times than a year ago and Euromonitor reports that 89% of global retail sales still occur in stores. So the opportunity for stores is there, if they are built to be worth the visit.
To illustrate how you make a store worth the visit compare ‘Lush’ with ‘the Body Shop’, which
compete in a similar market.
Lush is all about experience; it has testers of products, information delivered in their own unique style and staff with personality who will demonstrate any product for you. Shoppers know they are always worth the visit and the stores are packed.
To me, The Body Shop feels soulless without any real focus for the shopper’s attention and information delivered in a way that doesn’t attract or engage the shopper.
L’Oréal has sold the stores because 'they’re not worth it' and the shoppers agree, as even with 30% off, a free gift and a member of staff outside encouraging people to come in, the store was still empty.
3 ways to make a store worth the visit:
1. Control your price perception
If you are always the cheapest in the market focus on price as your reason for why you are worth the visit. If you are not, highlight your biggest promotions with pictures, which are processed faster and remembered more than words alone. This controls what the shopper focuses on and influences long term price perception. Control the price comparisons to areas where you win like Fotex the premium retailer in Denmark.
2. Be first and best with NEW
Be the first to get new products in-store and support them with enhancements and information at launch to attract the early adopters and then 6 weeks after launch to capture the second wave of trial. New creates excitement, it is something the discounters can’t do well due to their limited range and usually comes with a higher margin. Best of all the shoppers reward you for being worth the visit as 67% of shoppers who repeat purchase a new item buy it where they bought it the first time.
3. Deliver expertise
Sampling of premium products with information and education on why shoppers should trade up is a great way to add expertise. This example from Tesco highlights 3 premium bread options with small pieces to test combined with just enough information to justify the choice. Execution is everything in retail and this example has missing pieces of information (on the 2 right hand products there is no information board). It is important for staff to understand that these elements play a key role in making your store worth the visit. However, it did get me to trade up to chilli bread for the first time which was not something I had ever considered before.
Deliver expertise by creating simple solutions for the shopper that make their lives easier. Only 15% of shoppers enjoy food shopping and the average housewife in the UK has a repertoire of only 9 different meals so its easy to make the store worth the visit. Here Aldi in Germany put a recipe card for a simple meal plus everything you need to make it all in one place. The shopper loves it and the retailer makes more money by trading people up to include fresh herbs and wine in the basket.
Deliver expertise by getting the shoppers to interact with the product. There is a 67% correlation between a shopper touching a product and buying it. Instead of having boring white shelves Albert Heijn in Holland enhance the Premium fragrance of Lenor with testers that encourage interaction and make their store more worth the visit than competitors.
There are many reasons you can be worth the visit including the examples I have mentioned above or for other reasons such as; because your staff are better trained, you have no queues at the check out or your products are of a higher quality.
Look critically at your store and ask how much would shoppers be willing to pay as an admission fee to come into your store. If you can’t instantly set out why you are worth the visit you probably won’t be here in 5 years as ecommerce will steal your shoppers as it offers everything you do but with less effort.
If you want extra ideas and proven ways to use shopper psychology to win in-store and make your store worth the visit get in touch. https://ardurham59.wixsite.com/tonydurhamlimited/contact
If you are looking for speakers or training for your Christmas meetings I still have a few dates left.
Tony Durham
Tony Durham Consulting Limited
https://ardurham59.wixsite.com/tonydurhamlimited
