Dollar-Store Design

I recently read an article in the New York Times which talked about the success of the Dollar-Store in today’s economy.  Before the market meltdown in 2008, conventional wisdom suggested that dollar-stores were mainly shopped at by poor people.  While 42% of the shoppers at these stores are low-wage earners, and do make up their core constituency, recent growth in the market is from affluent households.  This shift in the type of customer attracted to these stores has caused designers to start to rethink the way they are creating the store layout.

 Current developments suggest that a larger shift in the American consumer market is under way.  The article suggests that financial instability in the market has created a feeling of anxiety within consumers; although affluent households have money now, they feel as though they might not in the future.  While this seems to go without saying, the article suggests that part of the reason for the new segment of shoppers is the fear-induced pleasure in selective bargain-hunting they experience at a dollar-store.   

Traditionally, dollar-stores have been designed in a way that facilitates the idea of bargain –hunting through the layout the stores.  Typically when customers walk in the store cash registers are on the left and all the displayed that bombard you upon entrance, force the customer to go to the right and get right to shopping.  The idea behind this is to get customers in a set routine of going down all the aisles and possibly finding something that they forgot they needed.  And this is easy to do considering all of the displays in the aisle are packed with merchandise which is often piled on the ground and all the way to the ceiling.  This is done to create the sense that everything in the store has just arrived and you are getting it first.  The aisles were even designed to be just big enough to fit two small carts side-by-side to give the impression that the customer is getting lots of product for a little price.

Nowadays, with growth in the affluent buyer segment, dollar-stores are beginning to rethink the way the stores are designed and laid out.  Many large chain dollar-stores are moving towards a uniformity in their design  to take out the hunt and gather feel of the old layout.  Research has indicated that much of the growth within the affluent buyer segment consists of “fill-in trips” to the dollar-store rather than going to a Target or Wal-Mart where they can get lost in the expanse of the store.   To make these trips easier and allow customers to get what they are looking for and get out; many stores are opening up the front of the store rather than herding people as they did before.  Aisles now are going to appropriately spaced to allow for quick in-and-out.  They are also grouping the products together to make sense to the mission-oriented-buyer.    

Chad Lovin

Eye Flavor and Buyer Behavior

     Once a decade certain technologies seem to appear that have the potential to significantly impact the way we do business.  In my lifetime we have gone from buying goods in “mom and pop” shops to eBay auctions to advertisements screened by Google analytics.  The next evolutionary step is here with NEC’s introduction of it’s new “Eye Flavor” technology.  These digital billboards utilize facial recognition software to generate custom advertisements based on your age, gender, and nationality.  Is this new technology an invasion of privacy, pure genius, or a little bit of both? And most importantly, how can this new technology change our purchasing behavior?

http://cnn.com/video/data/2.0/video/tech/2010/07/17/pkg.lah.ads.eyes.cnn.html

     This new technology has significant implications for the effectiveness of marketing in the future.  For the first time companies will have the opportunity to evaluate their marketing efforts in real time to see how consumers are reacting to their messages.  Companies are going to have access to analytics that give them detailed information regarding your level of interest and purchasing behavior.  One blog I came across went as far as to claim that NEC intends to have it so that coupons appear on your smart phone after passing the advertisement as well.  I expect Eye Flavor to revolutionize the way companies spend their advertising dollars in the future.        

     The most significant hurdle that this technology faces is the resistance from the western world.  Currently this technology is used in Japan with little outcry from consumers.  However, many citizens of the western world are most likely going to be concerned that Big Brother is looking over their shoulder.  Is this new service a violation of our civil right to privacy or a useful tool to improve our shopping experience? Concerns that I have moving forward include how do we opt out or in to this new technology?  What if I do not want to be inundated with visual spam?  I would expect this new technology to be closely regulated by the government to prevent wrongful manipulation and distribution of data. While I feel that many people would not be offended by the targeted marketing that Eye Flavor offers, these are significant concerns that NEC needs to overcome moving forward.  

     The minute that Eye Flavor is introduced in the United States it is going to alter the way that I make purchasing decisions.  This new technology reminds me a lot of Amazon.com and the analytics they use to sell to consumers. I am an informed consumer and thoroughly enjoy saving money.  I like the idea that companies can gear sales and advertisements towards my specific needs.  I use amazon.com on a regular basis for this very reason.  Like most major technological advances, it is reasonable to expect the younger generation is going to embrace this new convenience while the older and more cautious baby boomer generation resists as long as possible.  This technology excites me because it has the ability to reduce wasted advertising dollars, improve customer satisfaction, and improve bottom line performance.  That sounds like a “win-win” in my book.   The only reasonable request I have is the inclusion of some form of visual spam filter.  


-Chris Gabriel

The mobile and connected world: challenges and opportunities for marketers

It boggles my mind every time I hear about the speed with which technology is changing our lives. In a little over ten years, mobility and connectivity have become ubiquitous in our society. Not only can we travel to almost any place on this earth, but we can also virtually participate in what is happening in any country in the globe. As we become more and more dependent on these technologies, marketers—including aspiring ones like me—should look closely at the challenges and opportunities that these technologies present. 

For the sake of a couple of laughs, take a look at this video that shows in a humorous way how technology has been changing our society:

This summer I had the chance to participate in a webinar on the trends and effects of mobility on people’s shopping decisions offered by two Google executives. They expect that by 2013 more than 50% of web traffic will come from mobile devices. Interestingly, today three times more smart phones are being activated across the globe than babies are born every minute. Furthermore, the trend is for all mobile devices to be connected mostly through wireless technologies. 

Implications for marketers

A couple of weeks ago, I was counting the number of devices in my household that are somehow connected to the web—five in total. I started to ponder how these connected devices were craftily developed to become not only touch points for marketers to communicate their messages, but also gateways to “virtual markets” where I as a buyer can interact with a potentially infinite number of sellers. This is the platform theory that companies like Apple (iTunes), Google, and Amazon are working so hard to create and maintain. Today cell phones, tablets, printers, TVs and even refrigerators are making it easier for all of us to shop at our convenience.

Changes in shopping behavior

The mobile and connected experience is changing our shopping behavior in many ways and I would like to share a few of them:

1. Social Media influence. Yes, we want to show our friends how great a deal we found online. More importantly for marketers to consider is the recent trend for consumers, and especially mobile consumers, to be much less influenced by traditional information sources and instead base their purchasing decisions on reviews coming from friends and families.

2. Price leveling. Mobile devices are putting the power of comparing prices in the palm of consumers’ hands. An increasing number of people can now access mobile coupons, compare prices, and tap into loyalty or similar programs all while standing in store aisles. 

3. Flash deals sites. Another trend empowering consumers is accessing sites that specialize in deep discount promotions. Sites like tanga.com and forums like slickdeals.net are becoming increasingly popular and many more specialized deal sites are springing up every week.

These and a number of other trends have serious implications for marketers, as new technologies seem to put pressures on businesses to gain efficiencies and share those with customers in the form of lower prices or higher quality. The underlining issue of this blog post is to remind us that an increasing number of customers are quickly adopting new technologies when make their shopping decisions. We have a clear example in the adoption rates of mobile devices.

According to Google, last year shoppers spent on average $300 from their cell phones, mostly on entertainment, electronics, and clothing. I’m sure that this number will continue to increase by leaps and bounds in the coming years.

Our challenge as marketers is to adapt to the requirements that mobile consumers present. Adapting to these changes include: 1) building mobile-optimized websites—designing for thumbs and not only for mice; 2) the usage of QR codes on physical products and marketing materials, and 3) understanding and exploiting new dynamics like mobile usage peaks during lunch, nights, and weekends, etc. 

The mobility trend is just the beginning of an era. For a sneak-peak of what is to come take a look at this Microsoft video:

 Many of the technologies presented in the video are actually available today.

Luis De La Cruz

The Luxury of Online Shopping Cart Use

Recently, I read an interesting article1 concerning the manner in which online shoppers interact with shopping carts on internet retail sites.  The article caught my eye as personally, I am very prone to "window shopping"on websites selling luxury items on my one-day wish list. I will typically add items to the shopping cart that I have no intention of buying.  Occasionally, I have been known to go a step further and click purchase--against my better judgment and on a complete impulse.  It's just too easy.  Without the physical interaction of a physical shopping cart, a physical sales representative, and handing over a physical bank card, such transactions create an entirely different range of emotions in my head.  And those emotions signal that I am much more comfortable and susceptible to clicking the PURCHASE button, than I would be to standing before a cash register.  Particularly when PayPal or a similar one click, no need to pull out the wallet system is involved.

The article divided the online shopper's use of the shopping cart function into two linked categories:  organizational/research (goal oriented) and entertainment (experiential).  Entertainment use is basically placing items in the shopping cart as a cure for boredom or with no intention of actually purchasing an item, while organizational/research cart use involves placing items in a cart to narrow down a selection, or compare items side-by-side before committing to a purchase.  One theory proposed in the article is that shoppers who use the cart on the retail website for entertainment purposes are much more likely to then use the cart for further organizational and research purposes, ultimately leading to a purchase. In contrast, passive website browsers who have less active interaction with the internet retail store are more likely to move on without purchase--even though both entertainment cart users and passive website browsers both originally did not intend on purchasing anything at all.  The article suggests that once at the organizational/research stage of use, shoppers experience positive feelings of control and freedom in the browsing experience.  Going further, the authors then draw more hypotheses of some of these same shoppers abandoning their carts due to pricing and security concerns--which apparently is a big problem for online retail.  (Although I would imagine in a specific luxury goods category, the pricing comparison would be less of a factor as many of the prices are stable across vendors--And if a consumer actually considers spending $520 on a pair of shoes, what's another $20 anyway?).  However, what really drew my attention in the reading was the recognition of what I have experienced personally while website browsing.

If you had asked me before why I would tend to "accidentally" buy luxury goods on a whim, I would have reaffirmed the ease of purchase--but honestly, I couldn't put my finger on why I actually did it.  Honestly, the reward is not even is great as an actual physical purchase.  I'm one of those shoppers who experiences elation at the feeling of a large paper bag in my hand--the more structured and strong the handles, the better.  See Burberry bag to the right for the perfect example.  It's sturdy, ties w/ brown ribbon, and gold embossing.  I'm always excited to use the item I just purchased, to look at the item, but really, holding that bag is the trigger to my endorphins.  When I shop online, the thrill just isn't there.  Once I click purchase there's...nothing.  And yet, 9 out of 10 times, I'm much more likely to shell out for something I would never purchase at a physical store.  So, what gives?


Basically, as the article suggested, by placing "dream" items in the online shopping cart, I (or the generic cart using online shopper) invests his or her emotions and time in actively selecting, and interacting with the products.  These feelings of control over what we "hold" for a while in the cart allows us the freedom to try out the idea of purchase, before we commit.  Online browsing becomes an experience and draws us into sealing the deal with a purchase.  If we have five items in our cart, and remove four--we may as well buy the last item since we've been so good and given up the others.  In an actual store--especially one for luxury goods, either we are less likely to place items in the actual shopping cart or the store doesn't even have such things as carts or baskets.  If it does, and we perform the same organization and selection process, we are aware that others could be watching us put back the products we choose not to buy.  This greater sense of embarrassment, guilt, or dissonance between our desires and would-be actions keeps us from picking the products up in the first place.  In the privacy of your home, it is just you, the website, and your computer who are involved in the movement of an item into your cart.  Thus, playing around with the cart contents is almost a game, and making a final purchase is a reward.


Personally, I haven't seen any websites that try to lure you into using their shopping cart features.  However, if I am not alone in my experiences, and the article's authors are correct in their hypothesis, perhaps such an effort is just the next step in experiential marketing--specifically in the luxury goods category, where the lowest price is not the driving factor in purchase.


Natasha Gaggar


1  Close, A. and C. Kukar-Kinney, "The Determinants of Customer's Online Shopping Cart Abandonment," J. of Acad. Mark. Sci., 38: 240-250, 2010.

Five Dysfunctions of the Team

This summer I decided to step outside the realm of what I normally do and read a few books for pleasure.  I use the term pleasure lightly because I am not a person who generally likes to read for fun, I read more for self improvement.  A distinguished professor, who knows my career aspirations, suggested that I read The Five Dysfunctions of the Team by Patrick Lencioni.  So I read the book this summer and I have thoughts about what I read.

The beginning of the book is a fable type story where the new CEO enters a new company in the Silicon Valley.  She has no experience in the tech industry and in fact, she doesn’t even have a lot of general management experience.  Despite all of that, Kathryn (the new CEO) was selected because of her great ability to understand the team concept and get the most out of her people.  As I read further, I imagined myself in her shoes, I would then think about what I would do if I was in that position: hopefully I will be someday. I have been blessed to have a number of leadership opportunities so far in my life, and I’m currently in the most influential leadership position to date.  I like the term President associated with my name J

  In her first few weeks, she did nothing but observe everything to get base line on what was going on.  That’s exactly what I thought she should do.  In organizational behavior class, we learned how easy it can be for a leader to get caught up getting a “quick win” to prove his or her worth to the company.  Throughout the book, Kathryn addresses what she sees as the 5 dysfunctions of the team and how they apply to her current executives.  Some of the key actions she takes in the book are to keep the former CEO on the team, promotes cross functional communication and dependence, and holds a number of leadership retreats to make sure everyone is on the same page.  The most controversial thing in the book is when Kathryn fired her top performer after she realizes that although this employee is extremely talented, she proved that she cannot be a team player and therefore must go.  I thought that this was extremely bold, especially for a new leader in the first few months of tenure.  Her actions over the course of the book served as a guide and taught me the lesson to never be scared to do what you know if right.

Then there are the actual five dysfunctions of the team:

1.       Absence of trust, the appearance of invulnerability.  Makes sense to me, if the team can’t admit their shortcomings with the team, how would anyone get better?

2.       Fear of conflict, artificial harmony.  Avoiding difficult conversations is more detrimental than anything.

3.       Lack of commitment, ambiguity.  It doesn’t matter how well you plan, if the people are ready to do the work, then it is all for not.

4.       Avoidance of accountability, low standards.  If no one is held to the rules, how do you make sure things get done?

5.       Inattention to results, status and ego.  Men lie, women lie, numbers don’t lie. Don’t listen to hype.

The moral of the story is to look to address these five functions and know that it takes time to get there.  I’m glad I read this book.

                The one and only, Ronnie Williamson.

The Potential Value of Interdisciplinary Studies and the Application to Marketing

Based on a book/text I’ve read.

Recently I was sitting through an interactive workshop on “Personal Leadership” when the presenter provided a simple but crucial insight regarding interactions between two people with a pre-established relationship.  The fundamental concept is that in every interaction between those two people each member involved has three (3) options regarding how this interaction can affect the future of the relationship: you can improve it, maintain it, or degrade it¹.

In reading the basic concepts associated with Lean in ensuring that an organization properly captures the true voice of the customer (VOC) and translates that in to fundamental engineering requirements in order to reduce muda (waste) in the process, there is a technique for optimizing the collection of that data known as the Kano model.  This theory claims that products can evoke certain reactions from a consumer placing those products in to one of three (3) categories: dissatisfiers, satisfiers, or delighters².

I believe that these two concepts provide paralleling structures from which one can more effectively target their marketing efforts when going after particular consumers.  Marketers are consistently trying to learn the true desires of their target audience and predicting how these priorities are going to shift or change over time.  In order to do this successfully, a marketer must be in tune with the audience knowing what questions to ask so as to draw the right information.  These frameworks provide examples of potential techniques to allow one to affectively reverse engineer the customer’s wants.

One objective of marketing is to alter the customer’s perception of some aspect of a product so as to create a perceived point of differentiation.  This in turn justifies a higher price-point thereby providing greater margins for the parent organization.  When one is operating at a parity cost structure there becomes a reliance on brands to place value (whether real or perceived) on their products to generate revenue.

I have highlighted these three intertwined and related issues in business which each stem from entirely different functional areas in order to demonstrate the connectivity that exists throughout many of the fundamental topics in B-school.  This may be a motivator in driving you to pursue a greater knowledge base between functional areas to round yourself more as a business leader or this may drive you back to your particular area of concentration, shying away from management and operations entirely. 

Jon Wilson

¹Moss and Williams. (2010). Personal Leadership, Wake Forest University Schools of Business. 
²Pande, P.S. (2000). The Six Sigma Way, McGraw-Hill, New York.

"WE ARE NOT HERE TO MAKE FRIENDS"

Given my recent marketing experience with regards to the basic apparel category (at Hanesbrands, Inc.), I find myself subconsciously observing mass channel shoppers as they peruse aisles of underwear, socks, and hosiery.  Such instances are fairly educational for me (and fairly awkward for those I observe I’m sure), especially an experience from a couple of weeks ago vaguely recounted in the following:

A mother (approx. 35 yrs. old) and her small son (approx. 9 yrs. old) were shopping at a crowded mass retailer for boy’s underwear.  As the mother begins to quickly search through each facing for the correct size and style, the young man sees and begins to speak with another young boy about his age.  As the boys start to speak and laugh, the mother, seemingly flustered, pauses her undergarment search and walks over to her son to firmly direct him back to the cart and underwear shelf.  The boy says something to the effect of “Mom, I was just trying to make friends,” and the mom abruptly response “WE ARE NOT HERE TO MAKE FRIENDS!”  Following the brief exchange, the mother quickly grabs a pack of adequate product and departs (with her son of course). 

I feel sure that I was once that little boy in the store (and still may be) and that many behavioral principles could be extracted from this instance (distraction of children while shopping, etc).  However, after mentally comparing this event to the nonchalant manner in which my wife and I were shopping for electronics in that same store at that same time, I began to realize the vast behavioral differences that exist within consumers while shopping for “wants” vs. shopping for “needs.” 

Within the “back to school” context, the mother from the preceding example was most likely shopping for underwear since it was yet another item on most parents’ 6 mile long back to school list.  Hence, she focused simply on locating and choosing adequate merchandise that meet the needs of her and her child in a manner that was as timely and uninterrupted as possible.  On the flip side, my wife and I spent countless minutes wandering the store on our way to research and possibly purchase the ideal LCD television for our bedroom.  Realizing that numerous opposing forces come into play during any interaction between consumer and product, the buyer’s perception of the product (need vs. want) sets a preliminary tone to their shopping experience and formulates their “tactics” and expectations. 

Companies and marketers must continue to gain an unparalleled familiarity with their respective categories and products, especially whether they are generally considered wants or needs and the environments where these items will be shopped and hopefully purchased.  Such a familiarity will amplify a firm’s ability to price, package, and promote its offerings in ways that will please customers and meet their expectations with regards to the product’s range on the need vs. want spectrum.  As product life cycles continue to shorten and customer preferences shift with unprecedented frequency, the line between needs and wants has become increasingly blurred making the job of modern marketers extremely challenging. 

- Brandon Belk