Click here to watch a video of Roli’s store

Earlier this year, Ascot retailer Roli Ranger hired a local tradesman to build a set of new display stands for his fruit and veg range. With fresh, daily deliveries from the capital, this is a category that Mr Ranger is rightly proud of and the new stands – which are positioned prominently outside at the front of his store – were designed to look like old fashioned horse-drawn market carts that would be functional, yet unique and alluring. This is a classic example of the innovative ideas which independent retailers across the UK put into practice in their stores on a daily basis, but Mr Ranger’s new display unit also puts him at the frontier of a fascinating and contemporary area of scientific study into how, why and what shoppers buy.

Across the UK and around the world psychologists, market researchers and retail analysts are coming together to further understanding of what exactly happens when shoppers approach and enter a store and, most importantly, how businesses can put themselves in a position to profit from this.

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WHAT YOU NEED TO KNOW ABOUT SHOPPERS

Best-selling author and speaker Paco Underhill provided the world with fascinating insights into retail and consumer behaviour in his first book, Why We Buy. RN caught up with him in his New York office to discover what his research reveals about the customers in your store and what you can do to cash in[/box]

Paco Underhill on…
MISSION SHOPPING
“Almost all convenience store shopping is mission driven, meaning that customers are walking through the door because they need something. The most common need is thirst. Your customer will walk in and go directly to the cooler, pull out their product and only when they’ve fulfilled that purpose do they become a shopper. One of the most critical mistakes that convenience stores make is not managing the sight lines from the back of the store to the front, instead of the front of the store to the back. Almost all are managed this way, even though customers aren’t going to look for other items until they’ve got what they want.”
RN tip: Look at the view from your most popular categories. Could you reposition other products, categories or point-of-sale material so customers don’t miss them as they start browsing?

Paco Underhill on…
WOMEN SHOPPERS
“Historically the convenience store market catered to men. But women, who have a much more acute radar of cleanliness issues, are an increasingly important customer segment. So one of the seminal things in the convenience market is being clean: think ‘white, light, and bright’. One of the most important competitors for your female customers is the pharmacist, which has loyal relationships with women and is now adding convenience items to its range. A critical thing for a convenience store looking to branch out to women is to provide a broader range of dietetic choices such as confectionery. Also, if you are running a convenience store attached to a car park or street, one issue which many men have no feeling for is how safe it feels. A woman might think, “If I’m going to come there at night and park my car, do I feel safe?” This is often a question of lighting.”
RN tip: Talk to your female customers. What are their favourite shops? Is there anything about them (range/look/lighting/security) which you could apply in your own store?

Paco Underhill on…
THE LOCAL ADVANTAGE
“Many global operators of convenience stores ignore walk-up and bicycle traffic. In many communities the places which customers are coming from are local. Having a place to park bicycles – and that can be as simple as having a bicycle rack – will mean you being known as a bicycle-friendly location. Having a bench outside can also boost trade. If a husband and wife walk up to the store and she’s the one who’s interested in buying something, she has a place to park the husband like a pet outside. That bench is a marketing strategy because there isn’t that same incentive to hurry that there would be if he was just hanging out on the outside.”
RN tip: Think about the people who visit your store regularly, but don’t buy much. Could you make them comfortable with seats, and even a cup of tea or old books, so those they shop with have more time to browse?

Paco Underhill on…
SHOPPERS’ BUDGETS
“One of things we recognise globally is that the more upper class the customer base, the more confident people are in their purchase behaviours. The lower you get, the more likely it is that you will see physical debate about a purchase. Think about the amount of care that one customer will take about spending five pounds and then compare that with those customers who don’t give that amount of money as much emotional value.”
RN tip: If your customers look like they’re weighing up every purchase for its affordability, could you help them to understand the value you offer? Costed recipe ideas or Tesco price comparisons could help, even when you’re more expensive.

Paco Underhill on…
WHAT SCARES THE SUPERMARKETS
“The continuing growth of farmers markets has got Tesco, Morrisons and Sainsbury’s all worried. It is so much more fun to go to a farmers market because consumers get to talk to the person who made the product and while you pay a premium, it makes the consumer feel good. When they’ve finished their shopping they can then go online and pick up their basic stuff. Do this and they never have to walk into a big grocery shop ever again. “If 80% of my purchases over a week are routine, why do I have to go to the store to pick them up?”, “Shouldn’t there be an easier faster way to secure them?” These are the questions consumers are increasingly asking themselves.”
RN tip: Could you bring a farmers market atmosphere into your store with staff and products from a variety of local suppliers?

“Retailers have known for a century and a half that the way that you decorate a store affects customers,” says consumer psychology academic Gareth Harvey. “Since the 1970s, however, we’ve started to look at this in a far more systematic way, and how we can actively change behaviour with things like lighting, music and aromas. We’re looking at how this can increase sales and even reduce customer and employee theft.”
The progress made with this research has highlighted many actions that all stores can take to influence consumer spending. From making sure customers see and remember a shop’s best deals to selecting and displaying a range to get maximum sales, independent retailers can benefit from the insights available.
It is already possible to see some understanding of consumers’ minds being deployed in multiples and high street stores.

“An example of successful application of what we are learning about consumers’ brains can be seen in Morrisons,” says Mr Harvey. “It has this ‘high street’ concept at the front of the store so that you’ve got all of the fresh produce as you come in, which is designed to make you to think about freshness. If you were to think about it logically you want these things to be at the end so they don’t get squashed. But seeing the fresh stuff at the start makes you think that everything that they have on offer must be equally fresh.”

Mr Harvey says subtle pointers with merchandising and store design can be very influential: “Morrisons also has all of these individual shop fronts in-store, such as the fishmongers, and consumers almost feel as if they are supporting local trade.”

It is the same principles which make Roli Ranger’s fruit and vegetable cart so successful. Customers walking up to his shop will see the attractively merchandised fresh produce and, according to the theory, this perception will then bleed through to the rest of his store. And it’s not just Mr Ranger: many other retailers are using their store fronts to project the quality of their fresh produce. RN columnist Bintesh Amin says he’s increased sales of flowers by £1,300 this year by moving them to a prominent area, while also noticing how fresh it has made his store feel.

Those examples demonstrate a psychological idea called “priming” in action, which is one of the most exciting areas of studies into shopper behaviour. “If you make people think about one set of things it can influence their subsequent thoughts,” says Richard Sedley, director of strategy at retail consultancy company Foviance.
He describes an experiment where a group is asked to think about their birthday date for a minute before an expensive bottle of wine is revealed.
The group is then asked to say how much they’d be willing to spend on the bottle and the responses closely correlate to how late people’s birthdays are in the month. “I can guarantee that those people whose birthdays are between 1-15 will offer less for that bottle than those whose birthdays are between 16-31,” says Mr Sedley.

Yet, if “priming” is helping retailers such as Roli Ranger and Bintesh Amin to project their stores more positively to customers, it can also have a negative effect, especially in times of recession when consumers are looking for value.

“If you assume people will spend less, what you do to bring them in your store is put cheap prices in your windows, but you have to be careful,” argues Mr Sedley. “If a retailer puts lots of £1.99 prices in the window, is that going to be priming people to look only for the cheaper items? All logic and understanding of human psychology suggests that while you might attract more people, you’ll be getting a lower purchase rate.”

In fact, Mr Sedley believes retailers can benefit from being 100% honest with their customers about their pricing: “Retailers should be putting the prices of their competitors on the shelf, even if they know something is three pounds cheaper in Tesco. What’s three pounds? Consumers will still much rather have the benefit of the product immediately.”

Looking at a shop as a whole, the godfather of this field of study Paco Underhill told RN from his New York office that studying store and customer profiles is also essential if independent retailers are to understand and influence consumer behaviour.

“We have done an enormous amount of research on the convenience sector, including in Britain. If you look at the difference between a convenience store on an urban high street, in a small town or on the side of a road there is a different profile of customer that goes into each of those places.

“If you have a lot of familiar customers you’ll often find that they come in and buy the same things over and over. Part of your challenge is to buy not just the same things, but to add something extra to the mix.

“If you’re operating a convenience store in a petrol station off of one of the major highways, you won’t have seen 97% of the people walking though the door before. The nature of the exchange between you and them is simply transactional.

“Retailers have to look at the profile of customers walking through the door and think about how they will have to adjust their operating culture, their physical culture to better accommodate those.”

He believes that you must tailor your offering to accommodate women, elderly people and local customers, if you want to truly meet your customers’ needs and thereby increase spend.

Consumer behaviour and psychology is a massive field of study where decades have been dedicated to research and analysis.
That’s why RN has worked hard to condense the insights and advice of several leading experts to provide you with some basic knowledge, some weird and wonderful facts and some tips on consumer behaviour and in-store influences on spending patterns to try in your own stores. Put together, the effects could be huge.

“Everyone recognises that the role of a merchant is to win as many small victories as you can and that those small victories add up,” says Paco Underhill. “This is your chance to win just a few more of those battles.”

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MAKE YOUR PROMOTIONS UNMISSABLE
In his book The Art of Shopping Simeon Scamell-Katz explains that, “gondola ends are where retailers do the big promotions”. Consumers become so attuned to this that they can fail to notice or act on them. “We filmed shoppers buying from a gondola end that had an offer of buy one get one free,” explains Mr Scamell-Katz: “Around 80% of the shoppers picked up only one product.”
RN tip: If consumers aren’t taking advantage of a deal, tell them about it. They’ll remember you as the friendly retailer who helped them out and the store that had the great deals in it.

DON’T OFFER TOO MUCH CHOICE
Everyone says they like choice, but in his book Consumer.ology Philip Graves says evidence suggests we can have too much of a good thing. “Social psychologists Lyengar and Lepper carried out an experiment that illustrated how, in practice, more choice isn’t necessarily beneficial. They evaluated reactions to two tasting tables at a supermarket; on one they laid out 24 jams and on the other just six. More people elected to stop for the wider selection (60% versus 40%), but a dramatically higher proportion purchased from the selection of six jams.”
RN tip: Look at categories where you have a wide selection of products. Take all but the bestsellers away and record any dip or boost in sales.

OFFERING CHOICE MEANS OFFERING VARIETY
Choosing between similar items at similar prices can lead to confusion and lost sales. “Where you are potentially asking people to pay just a little bit less for something that is almost the same as the next product up in a range you’re asking them to re-think whether a product is actually worth that price difference,” says Richard Sedley. “You’re making the consumer’s decision harder.”
RN tip: Make sure that “choice” in your shop means offering a selection of price points or value, mid-range and premium lines.

PLAY WITH MUSIC
“In a store selling wine, on one day they played French music and on another comparable day they played German music,” says Richard Sedley. “On the day that they played French music, they had an increase in French wine sales of 6% and when they played the German music, comparable sales went up 7%.”
RN tip: Experiment with your in-store music. You can cater to younger or older customers or create a fast- or slow-paced atmosphere by changing it throughout the day. For specific occasions, could some relevant music get customers in the mood?

MANIPULATE THE SENSES
Gareth Harvey’s research revealed that smells can be used to influence shopper behaviour. “If you are a shop in central London in the rush hour you don’t want people to spend too long in the shop because it will appear too crowded and other people will choose to go next door. A citrus aroma here is energising and customers will rush their way through. Alternatively, if it’s a quieter time of the day you want some customers in store. At this time you want a lavender aroma. The nice thing about using aroma and music is that you can change the ambience of the store as and when it’s appropriate.”
RN tip: Could you change the way your consumers shop with the swapping of two air fresheners? The smell of certain products can also promote sales and a great impression of your store.

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CAUSE HEALTHY PANIC BY LIMITING OFFERS
Convenience stores are missing out because of the way they frame offers, believes Gareth Harvey. The multiples get it right by limiting offers, using ‘the scarcity principle’. “If something is on special offer, just by saying “three per customer” people will think, “Well I want three then, I don’t want to miss out”. The supermarket doesn’t care if they sell all of them to one customer, but by limiting it to three people think “three is the number that I’m expected to take”,” he says.
RN tip: Try testing this principle next time you run a deal. Limit your promotions and let your consumers know how popular they are.

OFFER PREMIUM OPTIONS… EVEN IF THEY DON’T BECOME BIG SELLERSNobel Prize winners Daniel Kahneman and Amos Tversky experimented with how consumers chose products. In his book Consumer.ology, Philip Graves says: “They conducted a number of experiments in which they asked people to make a choice and varied the number of alternatives on offer. In one scenario they contrasted the proportion of people who chose to buy a $240 Minolta camera when it was offered with a cheaper Minolta alternative, and when it was the middle option of three; the proportion choosing the camera increased from 50% to 67%.” Gareth Harvey says the convenience sector can benefit from this too. “If retailers have three types of milk – premium, mid-price and value – the premium is important, not because that many people are going to buy it, but because people think “I’ll go for the medium one”, because they have a frame of reference.
RN tip: Consider trialling more premium lines. Don’t just watch how they sell, look at the effect they have on entire categories.

USE THE FEEL-GOOD FACTOR
“The amount of time people spend touching an object is important and is a good indicator of their interest in it,” says Philip Graves in Consumer.ology. “Researchers found that when people held a product longer they were prepared to pay more for it. People were asked to bid on a coffee mug in an auction after inspecting it for either 10 or 30 seconds. On average the people who had held it longer were prepared to pay 40% more for it.”
RN tip: Installing a “check if I’m ripe” sign on your fruit and veg range might encourage more people to touch your fresh produce. See if sales increase. Could you charge more?

BEWARE OF “CONTAMINATING” UNTIDINESS
Richard Sedley had his own Eureka moment when shopping in a convenience store in Walthamstow, north London. “I noticed someone had decided that they didn’t want the can of tuna they’d picked up and had put it on the confectionery shelf,” he says. Sensing the opportunity for an experiment he pulled out of the queue and noticed that no one bought chocolate for 30 minutes. “I then removed the can and immediately, every minute, people were picking up chocolate.” After checking research papers, Mr Sedley discovered that this phenomena is called “psychic contamination”, where proximity of two differing items affects our perception of them. “I wouldn’t underestimate the importance of keeping your shelves clean and getting your layout right,” says Mr Sedley.
RN tip: Keep your store tidy and check that your categories are positioned next to suitable neighbours.

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