Tara Prab­hakar

Point of Purchase - - CONTENTS -

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

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