7 Smart Ways Retailers Can Turn “Shoppers” Into “Buyers”

In his article, Create "Choosing" (Not “Shopping”) Experiences in the Harvard Business Review: The Future of Retail, Former Harvard Marketing Professor, John Sviokla tells retailers how they can greatly increase their competitive advantage by examining their sales process and find out if they are encouraging "choosing" behavior, i.e. "buying" -- or simply fomenting increased "shopping." (In an upcoming post I plan to address the value of retail assortments, assortment planning, and pricing with regard to the subject of "choosing" -- and the fact that "consumers who are offered a richer array of relevant choices in a given product category grow engaged and interested in quality"... and don't necessarily look for the lowest prices).    

Anyway, after seeing store after store with sales signs, i.e. 25% discount, 40% off, 75% sale -- Sviokla noted that the retailers had simply stuffed the shelves, windows, and hallways with option after option, but had done nothing to distinguish them. This is as true for websites as it is for stores. He noted that there was no information to help the buyer make a decision, with the result that the retailers were driving more shopping and less choosing, quite the opposite of the effect desired.

In other words, none of the retailers had created a choosing process in which customers’ actions are guided by known principles of behavioral economics that help them make a purchase, not just look around.

 Here are some ways to help your customer choose, and not just shop:

1. Put Reviews Near The Product. It is both common sense and a research fact that ratings and popularity drive increases in sales. Put reviews near the product (yes, online as well as in a store) and watch your sales increase.

2. Get People To Talk. Products tend to move more quickly when people talk about them. As we've seen the ways consumers communicate in social media, information exchange seems to lead to choice making, and stores can facilitate this in simple ways. Examples: A store or site can tell customers what was the best seller that day; something unique about the product; kindle and capture discussions on social media.

3. Give Customers Choices. There is a procedure called, "The Goldilocks Effect" or "Goldilocks Pricing". The more that customers can choose from, the more likely they are to make a "just right" decision for themselves, and it proves not to be just a choice of lowest price.

4. Use The Decoy Effect -- Make it easy for a customer to choose a deal. Sviokla's Example: Economist Magazine offered three subscription choices: ($59 for online version only, $125 for print version only, and $125 for both). Which one would you choose? Sviokla says 84% of purchasers chose the print-and-online option because they (felt that they) got the online for “free.” Nobody bought the $125 print-only option, and 16% went for the online-only offer. When the print-only choice was removed, 68% of purchasers chose the $59 option, only 32% went for the print-and-online bundle, and the average basket was approximately $80. So when the decoy was added, the average sale increased from $80 to $114 dollars. That's what we mean by giving the customer choices!

5. Bundle Creatively To Make & Save Money. Similarly, a merchant who might be considering taking 20% off on a $500 suit could instead ask $500 for the suit, $100 for a shirt; and $500 for the shirt and the suit combined! It's likely that most of those people would have gone only for the shirt if the bundled deal wasn’t offered, but now more people are likely to buy the combo for $500. What a great way to increase average sale per customer -- and keep your numbers up.

6. Encourage Connected Consumers. We've talked a lot about the growth and ubiquity of mobile devices. IPhones, Android phones, and IPads are all tools to help consumers choose because they allow consumers to consider options outside the store, and get valuable information and reviews, which actually serve to help them make a decision rather than be stymied by too many choices, too much information, and then tuning out.

7. Use Pricing As An Indicator Of Quality. Our own guest blogger and pricing expert, Mark Stiving, and an HBR report on the Future of Retailing talk about another set of factors that are important: Customers using price to infer characteristics of the offering (and then buying it at that price). I plan to address this subject in more detail in my next post.


Retailers must design and use processes to help customers make buying choices -- and assiduously avoid stultifying the shopper into just shopping.


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Gilon Miller, CMO

About Author

Gilon is a seasoned marketing, sales and business development executive with over 15 years of experience in the software and Internet business. He is the Founder and CEO of GuruShots. Previously, Gilon was the CMO of Upstream Commerce, VP of Marketing at iMDsoft and Director of Global Marketing at SAP. He earned an MBA at the MIT Sloan School of Management and a BS in Electrical Engineering from Tufts University.
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