Visit our Facebook page and become a fan.
Retailers Use New Tactics to Turn Holiday Browsers into Gift Buyers
Discounting is not the only way to draw customers and influence them to spend this holiday season. Increasingly, smart retailers are using psychology. They’re taking steps in their stores to increase the mood boost people feel naturally when they’re buying for others and turn holiday shopping into a truly pleasurable experience.
Irina Rachow, owner of two Fairen Del stores in the San Diego area, has honed the holiday gift buying experience to a fine art. She sells luggage, handbags, shoes, belts, jewelry, and apparel, and a good percentage of her customers year-round are gift buyers. But during the holidays she estimates 80 percent of the people who walk in her stores are looking for a gift, and she cranks up her shops’ appeal to make sure they enjoy themselves.
Her stores are filled with subtle, appealing holiday touches. She bakes cookies and makes hot chocolate with marshmallows. For significant others who are just along for the ride, she has comfortable couches, magazines, and, on occasion, complimentary wine.
New Gift Buying Behaviors
Back in the good-old days (circa 2006), many holiday shoppers spent freely. They went out with open minds and open wallets and the expectation that, if they didn’t find a perfect gift, they’d just buy an expensive one instead. That’s not happening anymore.
“Aspirational is gone,” says Mike Tesler, founder of consulting firm Retail Concepts. “Before, people would buy something at Target and carry it in a Neiman’s bag. Now they buy at Neiman’s and throw it in a Target bag. And the way people shop for themselves reflects how they shop for others too.”
As much as they may want to be generous this holiday season, a lot of gift shoppers are having a hard time finding the money to do it. Early statistics indicate that this year’s Black Friday sales were up over last year but were not an over-the-top success. According to the National Retail Federation, 212 million shoppers visited stores and websites on Thursday, Friday, and Saturday of Thanksgiving weekend, an increase from 195 million in 2009. And while shoppers spent more on average than they did last year -- $365.34 as opposed to $343.31 -- they are still looking to save.
Tesler says that, for retailers now, this means offering either very low prices or unique products, items that set them apart from the other shops on the block. “People don’t settle anymore. A purchase has to be special.”
It’s Not Just What You Sell But How You Sell It
Pam Danziger is the president of Unity Marketing, a consulting firm that specializes in high-end retail, and the author of Shopping: Why We Love It and How Retailers Can Create the Ultimate Customer Experience. She says retailers must appeal to today’s gift buyers by offering something extra. “You have to recognize that it’s less about the products you sell and more about how you sell them. It’s about making your store a destination, based on the way you make customers feel and the services you provide.”
Like a lot of stores, Fairen Del offers free gift wrapping. But not plain old everyday gift wrapping. The store’s ribbons, wrapping paper, and boxes are custom-designed by local artists. And all gifts are topped with a sparkling bird or fairy. Rachow spends thousands of dollars on the service but says she considers it a better investment than advertising.
To encourage lookers to linger, Fairen Del hands out a gift-suggestions flier, with pictures and prices of items in a range of gift categories, from “hostess and teacher gifts under $25” to “gifts for the technogeek.” “This keeps people in the store much longer, as it helps them remember more people who could use some holiday cheer,” Rachow says. “It breaks the ice and starts the dialogue with customers and turns a browser into a happy purchaser.”
Rachow admits she can’t match the discounts offered by online stores and big-box retailers -- and she doesn’t try. “We can’t compete against that. We’ll never hit that lowest-price type of thing. We want customers who really prefer the experience.”
Gifts that Go the Extra Mile
Most people know that it’s better to give than to receive. But if, say, you’ve been working at a Wall Street investment bank the past few years, there is now scientific proof that giving to others bestows a feeling of good cheer on the giver.
Recently, Harvard business professor Michael I. Norton and two colleagues from the University of British Columbia ran an experiment. They went up to strangers in the street, handed them money ($5 or $20), and requested that they spend it by 5 p.m. that day. They asked half the people to spend the money on themselves and the other half to spend it on someone else. The result, Norton writes in Forbes magazine, was that the people who spent the money on others felt happier than those who spent the money on themselves.
Amy Shoaff has taken this research to heart. The founder of Dot Dot Couture, which sells baby clothing online, she says most of her customers buy her clothes as a gift and most of them know they could easily go to Target and find something similar for a lot less money.
“People need another reason to buy our products,” she says. “Psychologically, we know gift giving makes people happy, so we expanded on that to make shoppers feel even better when they buy from us. We’re going to start donating a percentage of our sales to good causes.”
It took some work to negotiate the legal requirements of the donations process, but Shoaff figures it was time well spent. Like a lot of savvy retailers this holiday season, she knows she needs to do something extra to draw customers to her store, to make them feel good about being there and to keep them feeling good when they leave -- ideally with a purchase in hand.
Wireless Business Solution Zee Tawasha