This will be a monthly perspective on some interesting aspects of human behaviour in commercial spaces. Understanding what drives people to behave in a certain way is the first step towards building a successful shopperoriented business.
People are motivated to behave as they do by structural, cultural and psychological stimuli in the form of spatial characteristics of a retail environment (design, ambient conditions), shopping traditions or rituals and their response to people dynamics (the retailer, other shoppers, sales staff...).
Retailing is not only about putting the right product at the right price in a nicely designed store; it is also about creating the right structural or psychological stimulus to generate a desired response (in purchase or behaviour) from the shopper.
This month’s piece is devoted to an area that is being touted as a 5000 crore opportunity – gourmet retailing. While numerous retail brands have forayed into this area, I am keen to discuss one particular success – Nature’s Basket, a Godrej enterprise.
I am a keen observer (as well as loyal shopper at) of Nature’s Basket in my city, Bengaluru and I see that there is one aspect of shopper psychology in gourmet retailing that Nature’s Basket has tapped into effectively.
The product mix, store location and staff notwithstanding (no doubt they play a crucial role but they are hygiene factors), a big factor in the success of Nature’s Basket (I define success in terms of repeat and regular shopping at these outlets rather than just the sales figures or the count of occasional impulse visits to the store) is how imposing their store is. They are not overwhelmingly large, spread out over multiple f loors, nor do they have stocks piled into the sky. At first glance, Nature’s Basket makes a shopper feel like she has “manageable choice”. This is psychologically important for shoppers of luxury / exotic / gourmet retail.
Gourmet shopping is about sensorial engagement and the see-saw battle between restraint and seduction. It is scientifically proven that indulgence or gourmet shopping tends to release hormones (dopamine, to be precise). These hormones produce a short-lived “high” and it is in this window that most purchases (especially unplanned or out of budget) are made. Like all “highs” this one too has a shelf-life which retailers should be mindful of – the longer a shopper takes to make a gourmet purchase, the more likely this window will pass by without conversion. One big reason for shoppers taking too long to decide is the amount of choice they are presented with. While some choice is liberating, too much choice can be debilitating (The Paradox of Choice - Why More Is Less: Barry Scwartz, 2004). Because when faced with an array of desirable options, shoppers begin to make hypothetical trade-offs where the options are evaluated in terms of missed opportunities rather than potential of the opportunity. Simply put, if you have 115 types of cheese to choose from (a gourmet store launched in Mumbai advertised this recently), first of all, you feel obliged to look at them all (unlike in mass market shopping where you would filter out choices, because gourmet shopping is a new experience, you look at everything). So, even when you chance upon what seems like a good choice, you move on to look at the others before making a final choice. Then as you plough through the 115 types, you begin to wonder about what you are missing out on by not choosing A rather than what makes A a good buy. Every “good” choice you come across is met with a “high” that dies down when you move on to the next choice. Do this enough times and the brain is “full”. The thrill associated with gourmet shopping is quickly satiated, the filter of logic replaces greed, lust and temptation and the next few purchases before check-out are usually “what you really need”. Where the shopper should have bought five products she buys two, where she should have bought a superpremium variant she buys a premium one. We call this outcome the “choice hazard”.
Learning about the “choice hazard” is important because it has an impact on off-take, on the gestation period of the business as well as on the profit. Concept retailing will not achieve exponential growth unless it becomes a regular (even if low frequency) habit for enough shoppers.
The “choice hazard” tells us that while shoppers will always say they want choice, more choice leads to more time and trips to get used to the store, making it more difficult to become a regular habit rather than a special trip. For individual categories too, it takes a few successive buys to make the transition from a guilty pleasure to a discerning necessity.
What shoppers are really looking for is “manageable choice”. The logical question that follows this understanding is – what is “manageable choice”? It depends – on factors such as the how nascent the category is (the newer and more niche the category, the more overwhelming choice can be as you are still learning about the category and like any new student, the more books to read, the more daunting the subject seems, the more difficult it is to the right starting point), the store layout (multiple levels communicate less area to cover than one sprawling level), aisle layout (covering the two faces of a six-feet aisle rather than one face of a twelve-feet aisle seems like less effort because the eye registers less choice in the former layout and turning the bend to go to the other face of the aisle is a physical break that reduces the burden of choice), aisle height (this depends on the average height in a country but in India, six feet high aisles communicate manageable choice because everything is almost within your line of sight). There are many more aspects to “manageable choice” but the point of this article is to establish that unlike mass retailing, gourmet retailing needs to be wary of giving too much choice and letting shoppers leave without fulfilling the potential of the trip.
In these times of spiralling real estate costs and manpower issues knowing that “small is good” is good news, isn’t it?
Tara Prabhakar, Development Director, TNS Retail & Shopper APAC