Merchant Innovation

Why Retail Wishes Every Year Could Be The Year Of The Dog

Yesterday marked the beginning of the Chinese New Year, and this year it’s the Year of the Dog.

The Chinese zodiac is a bit different from its Western counterpart. The Western zodiac is divided into 12 parts, such that the month in which a person is born more or less determines their sign. The Chinese zodiac is also divided into 12 signs, but those signs are associated with an entire year. So, a person born in 2018 is a “dog,” because they were born in the Year of the Dog. For example, Rooster was 2017, Monkey was 2016, Goat was 2015, Horse was 2014, etc.

The year in which one was born determines personality, luck and a variety of other factors. For those born in 2018, it’s said they will be born with traits all human beings value: honesty, friendliness, faithfulness, intelligence and, above all, loyalty — a fact to which anyone who has ever owned a dog can readily attest.

Your spouse may get mad at you, your siblings may fight with you, your children may think you’re hopelessly uncool and your cat may actually be plotting to kill you.

But your dog will always like — no, love — you just the way you are. A dog would never conspire against its owner and, in general, can always be counted on to go to great pains to avoid disagreement. As far as PYMNTS is concerned, every year should be the Year of the Dog.

If we were to take an informal poll, we suspect most retailers would also like it if it were always the Year of the Dog, especially if that meant shoppers would become a bit more doglike in the loyalty department.

 

A Commerce Environment Full of Cats

While the digital age has been profitable for retailers, it’s also made consumers sort of … well, catlike.

Fickle, imperious, purring one minute, off to a new lap the next and, above all, always coming back with the same question: “What have you done for me lately?”

In an attempt to answer that question and hopefully help customers take on a more canine state of mind, retailers have rushed en masse to encourage consumers to become more loyal by building out all kinds of loyalty and rewards programs.

Now, how useful most of these programs are … well, that’s up for debate. As Karen Webster noted a fews years back, most of what passes for a loyalty program in the U.S. these days are “really blunt instrument discount programs wrapped around the word ‘loyalty.’”

Because retailers’ offers tend to be similar, fairly basic and easy to sign up for, consumers tend to collect them indiscriminately, use them once and then forget about them. Far from making customers more loyal, a lot of loyalty programs are so generic they succeed in making customers more fickle — and feline.

So, how to herd the cats and turn them into dogs?

There are good methods and best practices, and we’ve covered those extensively.

And then, there are the out-of-the-box tactics.

For instance…

 

Hugs

Much of modern retail is about personalization and getting consumers to “feel the love.”

Some brands decided to get really literal with that by attracting customers with hugs. Online retailer  Shoptiques once attempted to create some customer loyalty — and brand goodwill — by hiring five models to hang out between SoHo and Columbus Circle in New York City for about a week between 11:00 A.M. and 4:30 P.M. Their job — to offer free hugs to passersby. (Hugs could also be scheduled on Shoptiques’ website.)

“We believe that Free Hugs fits with our motto: Be yourself. Be different,” Shoptiques CEO Olga Vidisheva noted about the promotion at the time. “A hug is so innocent yet so powerful; hugs are about basic human connection, and we want to connect with our customers. Giving hugs will show the city and our amazing customers how much we love and appreciate them!”

Coca-Cola debuted a similar hug-based marketing scheme, although it didn’t involve hugging a person. To get a free soda from a specialty vending machine in Singapore, consumers had to hug the machine.

Did it work? Actually, yes.

The Coca-Cola Company stated the “reaction was amazing — at one point, we had four to five people hugging the machine at the same time as well as each other! In fact, there was a long line of people looking to give hugs.”

 

Mom’s Apple Pie (and French Music)

It’s not surprising the environment of a store affects how much people buy or how often they return. It’s also not surprising that an aesthetically pleasing atmosphere tends to draw more spend or encourage people to come back.

What’s surprising are the elements that do lure people in, make them spend more and encourage them come back.

Want to sell an oven? Pipe the smell of something baking into the store. What to sell some wine? Play French or Italian-sounding music in the background.

According to researcher Martin Lindstrom — who tried this experiment across a variety of stores — putting something in the background, which consumers are barely aware of, can both drive them to spend more in real-time and convince them to return to the store, because they will remember those products more fondly.

The risk with this, notably, is picking something a customer doesn’t like — like a pie smell they don’t enjoy eating. That, of course, has the opposite effect, Lindstrom said.

 

Candy (and Other Treats)

If one can offer a customer candy, one should offer them candy. Especially if that candy is made from chocolate.

Because chocolate does two things to consumers.

First, it lowers their resistance to temptation in general. Consumers who’ve recently eaten a piece of chocolate are more likely to splurge on other items, particularly luxury items. Something about the experience of eating chocolate makes customers both less price-conscious and more likely to believe they deserve an extra treat.

Second, offering chocolate makes customers like the person who gave it to them, which, in turn, makes them more likely to do things to please the person or entity that gave them the treat.

Yes, it’s the same reason one gives a dog a treat when training it to do a trick: The treat makes a dog more likely to do the trick again.

Substitute out the word “trick” for the word “shop” here (and the word “dog” for “customer”), and the basic concepts of loyalty logic are born.

But what if hugs, ambiance and treats all fail?

There’s one really, really out-of-the-box method left to try.

 

Being Really, Really Mean

This tactic is high risk and only works for a certain kind of high-end, luxury retailer with an entrenched reputation for exclusivity. To generate customer loyalty — and persuade shoppers to spend more in-store — retailers can exude the vague impression that the store believes it’s better than the buyer.

Yes, counterintuitive as it may sound, a “snotty, dismissive staff” is the luxury experience some customers are looking for when they shop at brands like Gucci.

“It appears that snobbiness might actually be a qualification worth considering for luxury brands like Louis Vuitton or Gucci,” said Sauder Marketing Professor Darren Dahl. “Our research indicates they can end up having a similar effect to an ‘in-group’ in high school that others aspire to join.”

Believe it or not, a retailer can build brand loyalty by presenting itself as the “cool kids” and then making customers feel lucky for being allowed to eat at their lunch table.

But beware — customers won’t take this kind of treatment from just any salesperson; shoppers have to believe they’re dealing with an “authentic representative” of the brand. And it has the opposite effect for mass-market merchants.

“Our study shows you’ve got to be the right kind of snob in the right kind of store for the effect to work,” said Dahl.

Doglike loyalty is a hard thing to come by — in life, in general and in retail. And sadly, people aren’t dogs, despite our susceptibility to treats. There are no easy generic answers.

But that doesn’t mean creativity isn’t an option. If the best ideas in retail translate into the smell of baked goods, hugs, chocolate and snobby salespeople, well, three-quarters of those ideas sound like a pretty good start to us.

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Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. Check out the latest PYMNTS report on driving gas pump payments to the C-Store

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