Is it all about sweet-talking?

The power of communication is so high that it can work wonders in retailing. Many customers too like sales people talk about products and clarify product features before they buy. In the process, sales personnel understand consumer psychology well. Using the flattering technique, for instance, they may use phrases like “You look slimmer in this dress”, when a lady customer tries out a garment, which may elate her ego a great deal and induce her to buy. “One does not know when we’ll have this in our store again. This is the last piece in our current fast selling collection” may further hasten the customer to buy. This may successfully create a sense of scarcity so that the customer may not want to miss an opportunity to buy. The third psychological tool that retailers may use is the technique of ‘fulfilling an obligation through reciprocity”. This means that a customer may feel obligated to buy for a ‘favor’ received from the sales floor personnel or the retailer, in the buying process. For instance, when the sales person has offered the customer multiple alternatives digging through the stocks for long, the customer may be obligated to buy or for that matter it is commonplace in jewellery stores and saree shops in South India to offer snacks and beverages to customers as they go through the salesperson’s product range presentation and the customers may become hugely obligated to make a purchase. Automobile retailers may adopt the ploy of talking about the “difficulty that they face in holding on to the ‘old’ prices for a long time” that may do the trick with customers often. Traditional retailers understand consumer behavior like the back of their palms and better than their modern counterparts often. So, every customer interaction may result in the achievement of big sales.

Understanding consumer behavioural insights and patterns can help retailers a great deal in the matter of sustaining a long-term relationship with customers while truly helping them buy. Emerging markets like India have a significant growth in consumption and consumers in India are from diverse cultures and behaviours.  They also show different tastes and preferences. In developed economies they may show similar purchase behaviours in larger regions and so various large consumer clusters can show similar behavior. But in India consumer purchasing patterns and behviours are seen to be very diverse. Marketing and retailing organizations cannot operate with the assumed premise that consumers are the same everywhere. While on the aspect of assumption, I am reminded of a story that a Christian writer Bill Bright narrates in one of his articles “There once was a man who was very fond of the famous general Robert E. Lee. Every day the man would take his four-year-old son for a stroll through a nearby park, which had a statue of the general mounted atop his beautiful horse, Traveler. And as they walked, he would say to his little lad, ‘Say good morning to General Lee.’ And they would say good morning each time they walked by. As the days and weeks passed, the boy got used to the ritual of waving his chubby hand and saying, ‘Good morning, General Lee.’ Then one day as they walked past the statue, the boy asked his father, ‘Daddy, who is that man riding General Lee?”

According to recent news reports, Hindustan Unilever, the world’s third largest consumer product marketing firm has established its Consumer Insight and Innovation Center at its Mumbai headquarters recently. The center will facilitate the study of how consumers shop for Fast Moving Consumer Goods (FMCG) in India. The center is Unilever’s first consumer insight study hub in India and its seventh one in the world. It is reported that the center will serve several of its group companies with an understanding of how consumers shop in various formats of traditional and modern retail stores. Shopper insights would be provided by the center to both general stores as well as retail chains. The insight center also will simulate retail environments of supermarkets and neighborhood stores inviting customers to shop the virtual stores. Technical devices are used to track their in-store movements and even the movement of their eyes to map and display spots that attract consumer attention. The center will help retailers especially the neighborhood ones to attain product displays and consumer off-take efficiencies based on a scientific purchase behavior study approach. Based on the center’s insights the company can advise its retailers on how category growth and margin improvements can be achieved. The group companies of Hindustan Unilever will use the shopper insights and data even to plan product packaging and facings for the future. It is said that virtual reality platforms may be used by the center to study the patters of consumer purchases of new products and to study the effect of new in-store promotions. A scientific study of consumer behavior by retailers can go a long way to help customers buy and increase sales in retail at large! As many of us are aware, Paco Underhill studies consumer behavior from a spatial perspective too. In India, my friend Biju Dominic of Finalmile studies consumer behavior from a neurological angle. He says, “Marketers can use neuromarketing to better measure a consumer's preference, as the verbal response given to the question, ‘Do you like this product?’ may not always be the true answer due to cognitive bias.”

The long and short of retailing is surely not about sweet-talking but about truly understanding consumers!

- Dr. Gibson G. Vedamani