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increase summer sales
The Business of Retail is Going to be
Brutal in 2008
Creative New Ideas to Beat the Odds
by Pamela N. Danziger
In mid-February, Federal Reserve Chairman Ben Bernanke went to Capitol Hill and gave a guarded assessment of the economy. He forecast “sluggish growth” for the next several months. This means a more competitive market for the nation’s retailers, as shoppers hold back from making discretionary purchases—buying things they don’t really need—in favor of spending their money only for practical, needs-based purchases.
The pain of reduced discretionary spending is already being felt in the luxury sector, where American luxury consumers cut their spending on luxury goods and services more than 20 percent from the first half of 2007 to the second half, according to a recent survey of affluent consumer spending by Unity Marketing, a consumer market research firm in Stevens, Pa.
This year, more than ever, retailers need to be at the top of their game. With shoppers being super-cautious about their spending, retailers need to give them a reason to come shopping—but shopping alone can’t be the reason. Retailers need to draw consumers into their stores by offering an experience that makes shopping there fun, engaging and entertaining. That is the key for retailers to survive a slow market.
Research into the minds of shoppers has shown that two factors are pivotal when it comes to getting people to spend more money when they shop:
1. Increase the amount of time shoppers spend in the store.
2. Increase each shopper’s interaction in the store with the merchandise and the staff.
While conducting research for my latest book, SHOPPING: Why We Love It and How Retailers Can Create the Ultimate Customer Experience, I discovered seven factors—what I call the “Pop Equation”—that extraordinary stores share that makes a special shopping experience for their customers. The book studies how different retailers have used each of those seven factors in the Pop Equation to “make their shops pop.”
Retailers can follow these ideas and strategies in order to get their customers to spend more time in their stores and increase their level of interaction in the stores. And that will mean more sales, more profits and more success.
A “shop that pops” offers shoppers an extraordinary, enhanced shopping experience. It becomes a destination for loyal customers to visit again and again, not because they need to buy anything but because they want the thrill of shopping there once more.
A “shop that pops” thrives because all the while shoppers are getting their experiential thrill, they are also shopping and spending money.
Powered by in-depth research about what shoppers want when they shop,
SHOPPING profiles extraordinary retailers who have overcome obstacles to succeed, such as:
• Tiger Lily, in Charleston, S.C, is a florist shop that has won both local and national awards for their stunning arrangements and superior service. They succeeded only after they rejected what other people told them they needed to do to run a florist shop, like sell balloons, giftware and other nonflower items. Instead, they got rid of all the extraneous nonflower stuff and focused exclusively on delivering to their customers “awesome flowers.” With their new laser focus on flowers, Tiger Lily’s customers responded with passionate loyalty.
• Prairie Edge in Rapid City, S.D., offers authentic Native American arts and crafts with a big vision. Their goal is not only to sell rare and fine
objets d’art but also to preserve the heritage of the native peoples and to provide a fair price to their artisans. Prairie Edge is one of the early pioneers of “fair trade” at retail that makes their customers feel involved in the store’s greater mission.
• Damsels in This Dress, in Worthington, Ohio, has transformed from being just a fashion boutique. They offer their customers more than a new dress: They help their customers discover their own personal style. They bring out the inner diva hidden inside every woman.
The nearly 20 retailers profiled in SHOPPING have learned the secret of successful retailing: It is less about what you sell and more about how you sell it. In other words, it is all about creating a shopping experience for the customer.
Does your shop pop? How well are you doing to create an experience for your customers? How can you enhance the experience of shopping in your store? To find out, go to
www.whypeoplebuy.com/cms/Home_Page/Pams_Books.php, and download the “Shops that Pop” Quiz, with advice about how to make your shop pop.
Pamela N. >Pamela N. Danziger is an internationally recognized expert specializing in consumer insights, especially for marketers and retailers that sell luxury goods and experiences to the masses or the “classes.”
She is president of Unity Marketing, a marketing consulting firm she founded in 1992.
Advising such clients as PPR, Diageo, Waterford-Wedgwood, Lenox, Swarovski, GM, Orient-Express Hotels, The World Gold Council, and The Conference Board, she taps consumer psychology to help clients navigate the changing consumer marketplace.
In recognition of her ground-breaking work in the luxury consumer market, Pam received the Global Luxury Award presented by
Harper’s Bazaar for top luxury industry achievers in 2007.
H Her latest book is SHOPPING: Why We Love It and How Retailers Can Create the Ultimate Customer Experience (Kaplan, $27) is packed with strategies retailers can use to achieve success in a tight retail market, and it is in bookstores everywhere.
Her other books include:
LET THEM EAT CAKE: Marketing Luxury to the Masses as well as the Classes, (Dearborn Trade Publishing, $27, hardcover)
WHY PEOPLE BUY THINGS THEY DON'T NEED: Understanding and Predicting Consumer Behavior
(Chicago: Dearborn Trade Publishing, 2004).
Pam Danziger has appeared on CNN’s In the Money, NBC’s Today
show, CBS’s Sunday Morning, Fox News’ Your World with Neil Cavuto,
ABC News Now, NPR’s Marketplace CNBC, CNN International, CNNfn, and is frequently called upon by the
USA Today, The Wall Street Journal, The New York Times, the
Los Angeles Times, the Chicago Tribune, Women’s Wear Daily and
Forbes for commentary and insight.
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