The power of the pink purse

November 22, 2012 Leave a comment

Women are so devious. While the earth’s super powers compete for the position of the world’s largest economy, all the females in the world assemble unassumingly together and steal first place. Still reeling from being blind-sided by a bunch of girls, the world of retail and marketing is collectively sitting back trying to figure out exactly what just happened. With women now officially the largest economy in the world, ad agency creative directors (97% of whom are male) are fumbling through their marketing textbooks for a chapter called “How to market to women”.

With women now controlling $20 trillion in annual consumer spend and $13 trillion in yearly earnings, the words “niche market” are entirely extraneous in this context. And when one considers that the female economy now represents a growth market twice the size of China and India combined, you may find it thoroughly astonishing that 91% of women feel that marketers don’t understand them. In fact, worse than being misunderstood, it appears that many marketers are downright dismissive and indifferent to the opinions of what is now the most valuable and relevant marketing target on earth.

Oft considered the leaders in the art of misunderstanding the fairer sex, the motor industry seemingly gets it wrong more often than not. New research reveals that women may well have mastered the art of stealth-shopping. Why? Because believe it or not women now purchase over 50% of all vehicles in the US, influence 80% of all vehicle purchasing decisions and take ownership of 30 million cars each year. Generally unmoved by speed as a must-have criteria, women have voiced their need for utility and safety above all else when it comes to cars, with pink upholstery being way down on the list – as Honda unwittingly discovered when it launched its specially-for-women-vehicle called “She’s”. In addition to coming in several shades of pink and the inclusion of a heart in the logo, it has pink stitching inside, windows that cut ultraviolet rays to prevent wrinkles and a special air conditioning system designed to improve skin quality. Vital for any modern women, it also boasts pink-gold chrome finishes and a pink key.

Far from being the only industry guilty of trying to dumb-down their products in their well-meaning attempts to reach women, the technology industry has made its fair share of blunders. With women now making 66% of all computer purchases, Dell’s ad agency covered themselves with professional shame when they launched, Della, a laptop specially designed for women. Over and above the excessive and glaringly distasteful use of the colour pink, this she-friendly piece of technology came pre-loaded with exercise tips, calorie counters and easy-to-make recipes, resulting in a deserving admonishment from the New York Times. Also deserving of public reproach is Fujitsu whose advert for their “Floral Kiss” laptop failed dismally in its patronizing attempt to market their wares to a seemingly dim-witted female audience. Elegantly packaged in white and floral pink with a rhinestone encrusted power-plug, the advert shows its female owner using it in the kitchen, at a coffee bar, in her bed, reading her horoscope and trawling through Facebook. Although normal activities for any woman, Fujitsu was lambasted for neglecting to show the woman actually working on her computer.

As marketers come to grips with foibles of the female economy, it’s somewhat understandable that in the rudderless rabble to reach their pink purse-strings certain retailers would commit inexcusable marketing crimes, but surely none can beat the sheer condescension of the “Bic for her” pen. The slim femme-pens come in an assortment of soft, pastel ink colors and feature an attractive barrel design in pink and purple.  Following the release of these purposeless, pastel pens Bic faced the full wrath of women the world over with one writer blogging, “With “Bic for her” my drawings of kittens and ponies have improved, and now that I’m writing my last name hyphenated with Robert Pattinson’s last name, I really believe that someday he’ll marry me. I’m positively giddy.”

With women controlling spending in most categories of consumer spending, it’s almost unfathomable that so many large retailers continue to behave as though women have no say over purchasing decisions. Whether ignorance or arrogance, the statistics really do tell an interesting story of a new and exciting economy that much of the world was too busy to anticipate. In the US, women control 91% of new home purchases, 92% of vacations, 89% of bank accounts, 80% of healthcare and 93% of the food spend, and a whopping overall 85% of the total consumer dollar. With the majority of retrenchments during America’s recession being awarded to men, there are now more women than men in formal employment. American women own 60% of all personal wealth in America, 51% of the stock market and are responsible for 70% of all new business startups.

Juggling motherhood, creating careers and managing households has resulted in the female consumer feeling over-extended whilst at the same time underserved by consumer providers, with healthcare and the financial services industry being ostensibly least understanding of women’s needs. Although statistics might vary between countries and market segments, experts all agree on one thing: the ‘she-conomy’ has arrived and big business has started, albeit slowly, acknowledging that this may well be a case of ‘while the left hand rocks the cradle, the right hand rules the world.’

Have a super day!

Sue

The Fujitsu Floral Kiss laptop complete with rhinestone encrusted power plug.

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Not a penny more

September 27, 2012 Leave a comment

Of all the tactical weapons available to retailers when promoting their wares, the seemingly simplistic ploy of pricing could have more powerful leverage than one would imagine. In the competitive midst of brand power and corporate identity, it appears that there’s more to the humble price tag than meets the eye. While the rational human being is willing to concede that there’s a nonsensical 1c difference between R9.99 and R10.00, retailers know that when it comes to economics consumers have the potential to behave somewhat irrationally when presented with certain triggers. Such as a price tag ending in the digit 9.

Whilst in the first instance retailers use pricing as a direct weapon to influence revenue and profits, they also understand the intrinsic, sometimes incomprehensible, power of pricing to communicate value, product quality and brand attributes. Getting the price ever-so-marginally wrong, albeit in the face of brand-building brilliance, can spell marketing disaster for even the most robust of retailers. In the dog-meets-dog world that is retail marketing, product pricing has evolved into an interesting blend of maths and human psychology, where even the font size on the price tag can send customers into a purchasing frenzy.

The psychology behind product pricing is based on the theory that certain prices can impact consumer emotions and influence, to varying degrees, consumer behaviour. Far from being a coupling of ineffective digits, it’s widely believed that prices ending in .99 can powerfully influence consumer behaviour through a psychological phenomenon called left-digit anchoring. While the thinking, rational human understands that the difference between R8.99 and R10.00 is closer to R1.00 than R2.00, consumers often anchor their focus on the left-hand digit and, through a process of illogical rounding down, believe that the difference is closer to R2.00 than R1.00. Ironically, the illusion is not in the cleverly coupled last digits, but in the first digit.

The influence of fractional pricing extends further in that it leads consumers to believe the product has been marked down to the lowest possible price, explaining why most sale prices end in .99. In fact, an astonishing 60% of prices in advertising materials end in the digit 9, while 30% end in the digit 5, and 7% in the number 0 – drawing researchers to the conclusion that consumers prefer product prices which end in odd numbers.

The psychological relationship between a product’s price-ending and its ability to convert a sale is nothing short of fascinating. While most retailers pitch their regular prices to end in .00 or .50 and their sale prices in .99, Walmart is notorious for ending its sale prices in .98 – a would-be pricing signature of the US retail giant. And while a price ending in .99 may appear attractive when used by popular clothing retailers or large chain stores, this form of price-ending is snobbishly fobbed-off in more sophisticated stores. Pricing trends reveal that high-end clothing stores strongly prefer rounded numbers when it comes to pricing their goods, while sale items are marked with a more dignified and ever-so-subtle .50.

As a mark of distinction and clear separation from the fast-food market, the trend amongst up market restaurants is to eliminate decimal pricing altogether – the theory being that, with the price being less complicated and cluttered, the consumer will focus his attention more on the food and less on the cost. There’s even definitive research that product pricing is more effective when the Rand symbol is not included on the tag – with researchers believing that the Rand symbol establishes an emotional connection between the actual price and the consumer’s pocket, causing the consumer to hesitate longer before making a purchasing decision.

With the retail market swamped by the digits 0, 9 and 5, the digit 7 has been unceremoniously claimed by the on-line market. For some inexplicable reason most on-line prices are set to end with the digit 7. Although widely believed to be a lucky number as well as having biblical significance, there’s no sound research that explains its on-line popularity. And although the digits 3 and 4 are ostensibly the least popular digits when it comes to price-ending, they do serve a small function when sellers want to send a clear message to the consumer that the product has been optimally and exactly priced, with no further room for price reduction.

As unwittingly sensitive as price ending can be, its leverage can be further boosted by what is referred to as price bundling – and stores like Woolworths are becoming masters of this crowd-puller. “Buy bulk and save“, “Two for the price of one” and “Meal for 4” are in effect clever combinations of price ending and price bundling rolled into one pristinely packaged must-have meal. Retailers understand that, when driven by the overwhelming and not altogether rational urge to spend, consumers rarely stand back and do the maths. In the moment of purchase, consumers become emotionally charged by the possibility of a discount, a free item and or an unbeatable bulk purchase, that somehow the maths becomes either secondary or too complicated to unbundle standing up. Unless ofcourse the retailers specifically want you to understand the maths, in which case you can rest assured that the original (usually excessive) price and the unbeatable sale price will be ever-so-conveniently marked, together with the difference between the two prices for those who still can’t do the maths.

As fascinating as pricing strategies can be, the real benefit of understanding how retailers price their products in order to achieve optimal sales is that it makes us more concious and careful consumers. Granted, retailers have a quiver full of tactical pricing arrows available to them that, with years of research and mind-blowing marketing budgets, have the ability to influence consumer behaviour in sometimes frighteningly irrational ways. But consumer education, that powerful tool available to each and every income-earning South African, has innately more power than digit combinations, font sizes and sale banners. Our advice is to enter every store equipped with as much knowledge as possible, remain alert to the pricing weapons wielded by retailers, do the maths standing up and take charge of your purchasing decisions. Spend only what you rationally, consciously and willingly wish to spend, and not a penny more.

Have a super day!

Sue

Up market shops such as Jenni Button and Jimmi Choo never use a .99 on their price tags.

There’s conclusive evidence that printing the price tag without the Rand symbol makes customers feel more at ease when shopping.

The prospect of getting something for free or at half-price can cause people to buy items they don’t necessarily need.

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The great escape

July 17, 2012 Leave a comment

It goes without saying that an economic downturn gives rise to inevitable changes in consumer behaviour, particularly when it comes to the spending habits of the broader consumer market. The mere utterance of the word ‘recession’ invokes images of impoverished widows in breadlines, clutching crumpled coupons. Whilst there’s nothing particularly endearing about forced frugality, it appears that there’s something to be said for human innovation in the face of a financial crisis.

While some tend to face fiscal sobriety with sheer dread, there’s an ever-growing movement of consumers who, intent on embracing the current recession as a glass half full, are successfully revitalizing their lives and careers in a flurry of fresh ideas. Tightening the albeit non-designer belt is no longer considered unthinkable. In fact, it appears that this recession may well be remembered for introducing what some have termed ‘austerity chic’. Gone are the overtly ostentacious displays of wealth and glamour, thankfully to be replaced with tasteful simplicity, a desire for more natural beauty and a broader appreciation that sometimes less really can be more.

One of the more interesting trends in consumer behaviour during times of recession is the need for escapism from their imaginary financial manacles. Feeling tethered by fiscal sobriety, many consumers balk at the thought of literal sobriety as they turn to past-times such as excessive drinking, gambling and a number of more dangerous escapades in their attempts to forget their financial realities. More notably though is an increasingly large group of dexterous consumers who’ve turned to smart-shopping, ‘sell-suming’ and new entrepreunerialism in impressively innovative attempts to cut costs, generate additional income and strengthen their financial positions. These consumers are quite literally getting clever with their money as they consciously choose functionality over frivolity. Not content to be rendered hapless victims of recession, these consumers are redefining brand loyalty as they become more selective about their indulgences and more creative with their money.

And if large retailers think it’s a case of ‘business as usual’, they may need to think again. Recession-hit consumers are now seeking brands that offer an escape from reality, and they’re looking in entirely different places than before. The new, more discerning customer is harder to reach via any single medium as the Internet has quite literally fragmented the customer base through online marketing. Whilst some consumers are consciously cutting back on expenditure, others are being thoroughly intentional about seeking better value for their hard-earned buck.

Although frugality may appear to be standard operating procedure, it’s evident that it now comes hand-in-hand with innovation and a new form of escapism that is somewhat laudable. Shunning luxury restaurants and expensive get-aways, more consumers are regrouping as families and embracing home entertainment as a more affordable and enjoyable form of fellowship. No longer able to justify the costs of overseas travel, consumers are taking to exploring their own countries, embarking on local road-trips and embracing camping (or ‘glamping’) holidays. Dinners at expensive restaurants are being replaced by sunset beach picnics, whilst families are choosing to spend money on communal experiences rather than material purchases. Consumer trends are proving that the term ‘low-cost indulgence’ is not synonymous ‘forgettable experience’ as new and more exciting ways of entertaining, travelling and having fun are continually being defined. Consumers appear to be exerting a larger measure of control over their experiences, leisure activities and entertainment, all of which seems to resonate in the words of Robert Wringham, “When people become dependent upon companies or governments to entertain them, to transport them, to plan their days and to import their goods, they forget what it is to be free, alive and autonomous.”

It certainly appears that this economic downturn has resulted in some commendable consumer behaviour which, while some skeptics may consider it to be a form of escapism, many believe have resulted in a fuller appreciation for experiences rather than material goods, an increase in entrepreneurial innovation and a conscious return to family values. If these are indeed the unintended consequences of the global recession, then it’s evident that it’s not all doom and gloom. Escapism that reinforces innovation, encourages life experiences and values fellowship should be considered somewhat great.

Have a super day!

Sue

Returning to family values as a result of economic recession could be the greatest escape of all.

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On an impulse

May 11, 2012 Leave a comment

If an impulse purchase is defined as “anything that you didn’t intend buying when you walked into the shop”, then pretty much most of what I buy can be classified as an impulse purchase. Let’s get real – our lives are hectic and, whilst the theory behind it is great, one very rarely gets time to sit down and draw up a proper shopping list. Between working all day, playing taxi to 3 super-active boys, cooking dinner each night, doing homework, finding time to exercise and spending time with the family doesn’t leave a  whole lot of time to draw up shopping lists. As most of you can relate to, my regular visit to Woolworths or Pick ‘n Pay looks something more like a trolley dash than a planned shopping expedition. Whilst yanking my trolley (and I always seem to pick the one that veers randomly off to the left!) up and down the aisles, I tend to remember a whole array of items that I completely forgot I needed. The pack of multi-coloured cardboard needed for that school project, the bottle of mint jelly for tonight’s roast lamb, the bunch of flowers for a sick friend, the blue t-shirts that the kids need for  tomorrow’s sports day, and so the list of things that you didn’t know you needed goes. Sound familiar? Ofcourse it does. And the retailers know it, too. Which is why they employ a whole host of tactics that are designed to make us spend more (and unnecessary!)money during our frantic shopping trips.

The truth is that retailers have been cashing in on impulse buying for decades. They employ trained purchasing consultants who study the human psychology of spending, and then put mechanisms in place to ensure that (a) their shops are optimally designed, (b) their products are displayed in the right places and (c) that you are cleverly led through the shop so that all your ‘impulse buying’ mechanisms are on high alert. Have you ever reached for a packet of chips and been surprised to find that there’s a display of chocolates and 2 litre Cokes right next to the chips? Fancy that – exactly what you needed! Cooldrink and chocolates to go with your chips! That’s no coincidence – it’s a well thought out marketing strategy called grouping. Grouping is where retailers group a number of related items together that help to trigger impulse needs. For example, when you’re shopping for braai meat you shouldn’t be surprised to find marinade, braai salt, charcoal, blitz, gas firelighters, cooldrinks, paper plates and paper serviettes well within your reach.

Another tactic employed by retailers is the clever tactic of contrast – and I bet we’ve all fallen for this one! In order to make one product look attractive, retailers often place a similar (but more expensive) item right next to the cheaper item. The presence of the more expensive item makes the consumer feel that the cheaper item offers real value for money. By purchasing the cheaper item you are made to feel as though you are making a rational and logical choice, and not an impulsive one. Clever strategy.

Retailers regularly use the exclusivity tactic – especially when marketing to those people who like to keep up with the Joneses.  By making it clear that there is only very limited stock or that only a certain number of these items have been produced, the consumer is led to feel that he is special for having made this near-exclusive purchase. Once again, this tactic is designed to lead the consumer to believe this his purchase was NOT impulsive, but was a thought-out, rational purchase.

Ever dashed into Woolworths and headed straight for aisle number 2 to quickly pick up some rolls for lunch – only to find that the rolls are not longer displayed in aisle number 2? That’s not the shop simply trying to irritate you. That’s a cleverly designed tactic called organisation where retailers deliberately mix up their products so that consumers can’t find them. They know that, in your hunt for the bread rolls, you are bound to pick up a number of other items that you never knew you needed. Yet again, this tactic has been developed to trigger those impulse shopping neurons.

Imposing time limits on the sale of certain products is another trick used by retailers to trigger impulse shopping. Very often products are marked down to a special rate for only a certain period of time. This tactic leads the consumer to believe that, whilst he may not necessarily need the product, it would be stupid of him not to purchase it at such a good price.

Ever wondered why the sweet aisle near the checkout points (point of sale marketing) are waist-heigh? Well, they might be waist-heigh to you but they’re at eye-level to your child. That’s called positioning - putting the product at exactly the right place for the targeted consumer. Ever noticed how coffee and tea is displayed at eye-level to an adult, but Milo, hot chocolate and Nesquik are displayed at eye-level to a child. It all makes perfect sense!

Retailers also know that one of the key emotions that prevent consumers from making a purchase is guilt. In order to counter buyers’ guilt and remorse, retailers are pretty adept at highlighting the non-economic rewards of buying the product. It’s Mother’s Day and, if you really love your Mother, you’ll buy this gift and spoil her. The retailer is cleverly playing on your emotions by forcing the rational assumption that your love for your Mother should naturally outweigh any guilt that you feel at making the purchase. In order to further alleviate any guilt that you may still feel, the retailer will also go out of its way to offer you credit and a fantastic return policy. Which means that the consumer is receiving a triple marketing whammy: (i) they’re being made to feel guilty if they don’t spoil their Mother, (ii) they’re being offered credit to make the purchase (which means that not having cash is no excuse!) and (iii) their guilt is further alleviated because if your Mom doesn’t like the present, she can just bring it back, right?

The reality, however, is that retailers aren’t going the change or abandon their advertising and marketing tactics out of sympathy for the impulse shopper. In fact, they’re going to spend more money and do more research on how to get you and me to spend more money when we enter their stores. The only way that we’re going to escape the impulse shopping trap is to change our behaviour by being more vigilant and informed when entering a store. Take a look around next time you go shopping. Try to recognise the marketing “traps” before you fall for them. Whilst it’s not always practical to draw up a shopping list and stick to it, be aware of the possible pitfalls. Decide what you’re going to buy for Mom and how much you’re prepared to spend before you enter the store. That way you should avoid being entrapped by the impressive Mother’s Day display and lenient returns policy.

Whilst many people laugh off their impulse buying as a guilty pleasure or a charming personality trait, the reality is that many families suffer as a result of excessive impulse spending. Now, I’m certainly not preaching that we shouldn’t be allowed our luxuries and our indulgences. Ofcourse you are! Just make sure you’ve included “luxury spending” into your budget so you know how much you can indulge. I’d like to encourage you to think seriously about your spending habits. After you’ve been shopping, take out your slip and go through it carefully. Try and identify which items were purchased “unnecessarily” and as a result of clever marketing tactics. Make a mental note and try avoid that trap in the future. Another tip is to pay for your purchases with cash. When you are carrying a limited amount of cash in your wallet you are more likely to control your purchases than if you use your credit card.

My attitude towards shopping is really a matter of ‘forewarned is forearmed’. We don’t all have the time to prepare meticulous shopping lists and precise budgets, but we can equip ourselves with enough knowledge to avoid being taken advantage of as consumers. Yes, we all have needs, desires and longings – and these are exactly the emotions that retailers are trying to trigger and tease when we enter their stores. My advice is to recognise their marketing tactics for what they are. Acknowledge the emotions they are trying to trigger. Remain rational and logical about your purchases. Focus on your greater financial goals – a vehicle upgrade, a weekend away with the family, your child’s upcoming sports tour. Make a conscious decision not to be consumed by the attractive non-economic rewards that are being promised in order to counter your guilt. Taking control of your financial future begins with taking control over every single purchase. In every sense of the word, it pays to be a conscious and clever-thinking consumer.

Have a blessed weekend and a fantastic Mother’s Day!

Sue

Decide now what you’re going to buy Mom for Mother’s Day so that you don’t fall victim to clever in-store marketing tactics!

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