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March-April 2007

Influencing the Customer's Experience!

Retailers who strive to create a pleasantly memorable environment in their stores find its becoming more complex and sophisticated. While fixtures, props, signage, graphics, and color all play important roles, there are other tools equally as important.

Most of us acknowledge that a store's environment influences customer shopping preferences, but now there is a growing body of research that strongly supports this concept. The research into this probably began with a Journal of Marketing article written by Ronald Milliman back in 1982. The piece, entitled "Using Background Music to Affect the Behavior of Supermarket Shoppers," captured the attention of supermarket retailers back then. Today music affects the environment in stores of all kinds.

MUSIC

Department stores probably were the first retailers to use background music. You may remember when the selection was limited to orchestral music that sounded all the same. In those days it was known as elevator music. I'll never forget the first time I heard a Beatles song played in that sappy "elevator music" style. While it may have satisfied some, it was a sacrilege to those of us who grew up with the music of the sixties and seventies.

Today, Muzak, the company that pioneered background music in stores, offers more than 100 different music mixes plus completely customized mixes for retailers. Drawing from the company's library of more than 1.5 million songs, retailers can have just the right music mix for their customer demographics.

In stores frequented by young customers (late teens and twenties), the music mix is usually contemporary and upbeat like what might be played by a deejay in a club. In such stores as Abercrombie & Fitch, American Eagle Outfitters, and others that serve younger customers, the music is an integral part of the shopping experience. The challenge for every retailer is to have just the right music mix so that it engages rather than annoys the customer.

In the April 2006 issue of The New Yorker, a wonderful article about Muzak tells how the company's approach to background music in stores has changed in recent years. The fellow behind the change is Alvin Collins who, while working on a movie project, tried to find just the right song to play behind a love scene. His goal was to get the audience to cry. After three hours sitting around in the editing studio listening to music, he and his colleagues finally found the song. The music not only got the audience to cry but touched the guys in the studio as well.

Collins believes a store is much like a movie set. The music should create "retail theater." Muzak's approach to store music is now referred to as "audio architecture" with the goal of creating just the right feeling so customers will want to spend time in the store and buy lots of stuff.

The music played in your store is part of your brand positioning, and it shouldn't be left to chance. If you want to connect with your customers on an emotional level, there's nothing more powerful or effective than the right music.

To learn more about how you can use music more effectively in your stores, go to http://www.muzak.com. To read The New Yorker article, "The Soundtrack of Your Life," go to http://www.newyorker.com/archive/2006/04/10/060410fa_fact.

LIGHTING

In some stores lighting has one simple purpose--to illuminate the merchandise. As competition for consumer attention heats up, even those that traditionally use lighting "just for illumination" are beginning to make changes in how they light their stores.

Over the last year supermarket operator Safeway has been reconfiguring and updating its stores to better compete with such retailers as Whole Foods, well known for its pleasant ambiance. Now instead of long rows of fluorescent ceiling lights, Safeway has embraced a new lighting scheme that creates a much more inviting shopping environment.

The old fluorescents were harsh and did little to enhance the look of the merchandise. By replacing the recessed fluorescent fixtures with more indirect lighting, incandescent bulbs, and halogens, the remodeled Safeways have a more intimate feeling in what are often large stores.

The approach to lighting for many retailers is to continuously work on reducing energy costs regardless of the impact it has on the overall look of the store. Unfortunately, this approach usually does little to enhance the merchandise or entice customers to buy. With the right lighting system, any retailer can improve the ambiance of the store, which can keep customers shopping longer and increase sales.

SCENT

Music and lighting are an accepted means to setting the mood in a store. Now, another sense is being employed to connect with customers--the sense of smell. Unlike our ability or inability to remember pictures, sounds, or the printed word, scents can remain with us for long periods of time. Remarkably, smells can trigger strong even nostalgic memories.

Most of us have almost instant recall when exposed to certain scents. It might be the scent of a pie baking in the oven that takes us back to a specific time and place during our childhood. Or it might be the scent of a cigar or pipe that brings back warm memories of our father or grandfather. It might even be the scent of Play-Doh or Crayola's that remind us of our days in elementary school.

The scent in a bakery, candle, flower, or tobacco shop have long provided important connections to customers for these merchants. When I lived in San Francisco, I sometimes walked past a small cookie shop that used a fan in the back to push the smell of chocolate chip cookies baking out onto the sidewalk. I can attest, it helped them sell a lot of cookies.

Using scents can enhance a store's environment, improve ambiance, and provide a more pleasant shopping experience for customers. Among the major retailers that infuse their stores with their own distinctive scent are Victoria's Secret, Abercrombie & Fitch, The Gap, Coach, Bloomingdale's, and Nordstrom.

One of the most interesting experiments regarding scent and how it can be used to maximize sales was done a few years ago in a Las Vegas casino. The researchers infused a pleasant scent into an area with slot machines for several weekends and compared the results with another area in which no scent was used. The total slot machine revenues from the area with the added scent was 41 percent higher than the area without. Although this wasn't necessarily considered scientific research, it certainly got the attention of casino executives. Today every major casino has its own scent designed to keep gamblers in the casino longer.

Our sense of smell may be more powerful than our sense of hearing and sight. Using the right scent in a store is another important tool retailers have to connect with their customers and create an inviting environment where they will linger and shop.

For more information on using scent in your stores, go to www.enviroscent.com or www.brandaroma.com.

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The U.S. Supreme Court Gets Involved

In March, the Supreme Court heard a case that could have a major impact on both manufacturers of consumer products and the retailers who sell those products. The case pits Kay's Kloset, a small store in Flower Mound, Texas, against Leegin Creative Leather Products, makers of the Brighton brand of handbags, belts, and other accessories.

Leegin, not unlike other manufacturers of higher-end consumer products, discourages the retailers with whom it does business from discounting its Brighton line. The objectives of this type of policy are threefold:

1. Consistent pricing in all retail outlets so no retailer has an advantage over another
2. Everyone makes a profit on the line, and
3. The manufacturer doesn't have to spend a lot of time, money, and effort keeping its retailers happy.

While there are plenty of product categories in which discounting is common, in others, including some brands of luggage, golf clubs, and outdoor power tools, consumers generally pay full price. The companies that manufacture such products most often don't sell to mass merchants.

Because of a ruling dating back to 1911 and after years in the lower courts, the battle between this small retailer and Leegin has worked its way up to the Supreme Court. The 1911 Supreme Court ruling forbade manufacturers from requiring retailers to sell merchandise at a minimum or "suggested" retail price. The Court's decision is forthcoming, probably early this summer.

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THE CLOSING OF FORTH & TOWNE STORES

After a short-term experiment selling merchandise designed for women over 40, The Gap is closing its 19 Forth & Towne stores. Experiencing declining sales in Gap and Old Navy stores, company management must focus its efforts on these two brands.

THE CHANGING INTERNET!

Primary users in the early days of the Internet were men, most of whom were younger. In the last few years, this demographic has changed significantly. In recent studies by researchers Arbitron, eMarketer, Mediamark, Nielsen, Harris Interactive, and comScore, women now represent between 51 and 53 percent of Internet users. Having grown by more than 15 percent in just the last five years, the number of women online is expected to continue growing.

ROBBINS BROTHERS DOES IT AGAIN!

A company I've long admired for its innovative approach to retailing and marketing recently caught my attention as I was driving through Palm Desert, California. Robbins Brothers has done a great job attracting customers to its stores in southern California using creative radio spots, but this was the first billboard I'd seen from them. If you want to get the attention of customers today, your marketing MUST be different from anyone else's. I think you'll agree, this billboard is different!

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Into the Future: Powerful Trends Shaping the Future of Retailing

Understanding retail and consumer trends gives retailers the tools they need to prepare for the future. It gives them an upper hand to make sure they are in the right place at the right time with the right merchandise. Success doesn't come by chance.You have to make it happen. And in the retail industry, it means satisfying the wants and needs of consumers. But what they want today is not necessarily what they'll want tomorrow. With an awareness of marketplace and consumer trends, retailers can plan for tomorrow before it's too late.

After extensive research, George Whalin has compiled his findings and put together an energetic, enlightening, and entertaining keynote presentation entitled "Into the Future: Powerful Trends Shaping the Future of Retailing." Some of the trends are real eye-openers, some are even shocking. All of them give retailers the insight needed to attack the future and win!

Time is of the essence. Put this on the agenda of your next convention, conference, trade show, or expo.

For details on this and other convention and trade show topics, go to our web site or call 800-766-1908.

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Seminars and Training Programs for Managers and Associates

Delivering performance-enhancing speeches and seminars for retailers since 1987, George jam-packs his presentations with practical, real-world information. His seminars for managers and associates teach store management skills, customer service improvement, and sales techniques. If you want to improve store productivity and profitability in 2007, we encourage you to call George Whalin. Don't wait, his calendar fills up quickly.

Topics for managers' meetings and corporate conferences:
(Click on a topic for details)

Great Store Managers Make Great Stores!

How to Find an Eagle in a Flock of Turkeys! Finding, Hiring, and Keeping the BEST Retail Employees

Customer Focused Selling

Every Customer Every Day!

For more information go to our web site or call 800-766-1908.

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Resources for Retailers

George Whalin's book RETAIL SUCCESS! is now in its eighth printing. A number of consumer products manufacturers have purchased the book for their retailer customers. Retailers have provided copies for their managers who regularly refer to portions of the book in their managers' meetings. And managers are referring to the book in their daily store meetings. If you haven't purchased a copy yet, what are you waiting for? For multiple copies, call us for volume pricing. For individual copies, there are also some very good deals to be had at amazon.

Go to our web site today where you'll find several other books in addition to RETAIL SUCCESS that George recommends. Check it out often, he keeps adding to the list.

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After a slow start, I am now updating my blog on a regular basis. If you have an opinion or thoughts about any of the topics, I invite you to post your comments at retailerblog.com It's easy to do. And if you have a topic you would like to see addressed and discussed on the blog, send me an e-mail at george@whalinonretail.com.

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In addition to speeches and seminars, George also consults with retailers helping them improve the operation of their businesses. His consulting services include helping retailers with strategic planning issues, marketplace positioning, merchandising and store layouts, developing results-driven marketing and advertising programs, personnel management, and improving store performance. If you need solid, practical, proven insights and ideas to grow and improve your business, call us toll-free at (800) 766-1908.

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We encourage you to pass this publication along to your associates and colleagues. If all or any portion of this newsletter is reproduced in another publication, attribution should read as follows: Copyright 2007. Reprinted with permission from George Whalin's Retail Management E-Letter. To occasionally reprint portions of this newsletter one time, no express permission is required. To reprint in more than one venue or multiple articles, please contact us at 800-766-1908 or info@whalinonretail.com.

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