For those of you who are in the retail industry, you may have noticed a recent trend to clean up in-store environments – reduce shelf heights, remove dense ends and dump bins, widen aisles etc. – in order to increase comfort and make the shopping experience less stressful for customers.
The big question then becomes “does clean make customers keen”? According to Walmart, arguably the largest and most successful retailer in the world, clean stores mean fewer beans (on the bottom line).
As reported in the New York Times, Walmart conducted a massive in-store experiment to improve sight-lines, rationalize the overall number of items offered, remove warehouse-like merchandising in centre aisles, and increase the width of core aisles. According to Walmart’s CEO William S. Simon, “(Customers) loved the experience. They just bought less.”
As a result, Walmart reverted back to its original strategy of offering more products, with tighter aisles, more clutter and lots of bargain bins in the hopes that customers would spend more because of a perception “there were bargains to be had”.
If you do a quick search on the internet, there are dozens of experts who subscribe to the view that a larger selection, more bargain bins, and sales signage equates to “better value”. In essence, the more you look like a market stall, the better it is to generate buzz and sales. They argue that if your merchandise is neatly presented on the walls and in well organized aisles, with no point of sale impulse offers and dense ends full of 2-for-1 specials, customers will tend to think your store is expensive (i.e. overpriced) and they will not buy from you.
And if you think about it, you can probably name a whole list of retailers who subscribe to this “clutter is good for business” philosophy and they seem to be successful. But how can we be sure that clutter makes customers keen? Have we been too quick and prematurely jumped to a conclusion that clean is a traffic and transaction turn-off?
Recent empirical evidence from neuroscience and neuromarketing sheds new light on how we think, and more importantly, how we make decisions. In fact, the decision making part of your brain responds strongly to certain stimuli only.
Did you know that your brain consumes 25% of your body’s energy? As a result, you brain wants to conserve energy so you tend to pay attention and be attracted to things that have sharp contrast, high visual appeal, strong emotional cues and a clear beginning vs. end message.
Now what does this mean for you in the context of your shopping environment?
A chaotic, cluttered store is cumbersome for your brain to navigate – you have to work hard mentally to hunt down and search for bargains. It may create some emotional appeal but it is likely perceived as having low contrast, low visual appeal and no clear beginning vs. end. According to neuromarketing studies, shopping in this environment takes time and energy and it also forces your brain to go into “thinking” mode. This is a critical point because thinking is counter-productive to deciding. Thinking takes place in one part of your brain (the neo-cortex), while deciding happens much more quickly (and automatically) in your old or “reptilian” brain.
So what does this neuromarketing research mean for the strategy and conclusions reached by Walmart?
Based on neuroscience, the strongest buying cue that you can give your customers is this – if your store (or business) has incredible bargains, people will buy (and even sift through a maze of clutter) because something is in it for them. The “what’s in it for me” (WIFM) principle is one of the strongest influences on the part of your brain that decides.
However, there is no hard evidence to suggest that clutter makes your customers keen.
Walmart and many others have come to a conclusion based on what they THINK people are doing to reach a buying decision in-store. However, neuromarketing has produced empirical evidence to support the opposite conclusion is more probable. Clutter and chaos create an environment where your customers have to think too hard, which is exhausting for the brain. They will do it if they have to, as long as the perceived bargains and value are very high.
Wouldn’t it make more sense to find another way to communicate good value and service without exhausting your customers and causing them to waste their time?
Wouldn’t you be more likely to get more sales and word of mouth referrals from your delighted customers?
In the end, Walmart may be correct about the fact people buy more in certain circumstances but they are wrong about WHY that is. The best way to create more excitement and sales is to make it easier for your customers to decide. You need to show them what’s in it for them, increase the contrast between your solution and your competitors and communicate a strong, clean visual message that compels them to say “YES”.
Today, I’ve got a major challenge for you. I want you to take a look at what you are currently spending on marketing – whether it’s on brochures, your website, pay per clicks, PR, newspaper, direct mail, social media etc. – and I want you to slash the total budget by 20%. No matter what you are selling and where you are selling it, I guarantee that you won’t miss that 20%. And there is a very good reason for that. 96% of the people who see your message right now, don’t get it anyway. You are spending thousands of dollars each year on sales and marketing materials to increase your sales and the vast majority of your prospects don’t understand your message – so they can’t possibly recall it and buy from you.
So with the money you just saved in your pocket, we are going to take a few minutes right now to re-engineer your message and give you a much better chance of getting through and being understood. The good news is this – it is not going to cost you much to take the time right now to create a message that helps more of your prospects to say “yes”. And if more leads say “yes”, the money you do spend on sales and marketing is going to increase your sales.
To prove my point, I’d like to make you an interesting offer – I can either give you $50 cash right now or a piece of paper where I will write the net present value of a five year annuity at a compound annual interest rate of 10%, adjusted for CPI. Which of these sounds more appealing to you? Which would you rather take right now? Which of these can you take now, put in your wallet or spend it at the shopping centre?
Unless you are one of those very rare individuals who can calculate in your head the value of my second offer, I’m willing to bet you’d rather just take the $50. And that makes a whole lot of sense, because everyone knows what $50 is and what it is worth. There’s nothing confusing about it, is there?
The part of your brain that makes decisions is not interested in working hard to figure out what my message means and what it’s worth. That part of your brain is looking for something that is tangible. And if you’re unsure about whether a message is tangible or not – ask yourself “would a 6 year old understand it?”
Think about it – if I offer you a $50 note or an orange, you don’t have to think very hard about it to figure out what I am offering you, do you? Both of them are equally easy to understand. As soon as you see it, you know what it is and you know exactly what you can do with it. $50 will buy you enough food to cook a meal and the orange is good for you – it’s tasty and you can eat it. There are no directions and no heavy thinking required to make sense of what I am offering you. Your new brain doesn’t have to do any thinking (and wasting time) to get my message.
So what does this mean for you, your message and your customers? If you are making it hard for your customers to understand what you do and whether they are getting a good deal, you need to spend some time right now making your offer more tangible. Ask yourself “does my message include a bunch of big words, fluff and jargon?” Could it be boiled down to something that a 6 year old could understand? What do you need to do to communicate it more clearly to increase your sales – t0 help your prospects to be able to say “yes”? Can you simplify the words that you use or introduce photos or props to get your message across faster?
Now, I think you can guess that coming up with a simple, succinct message is a lot harder than being lazy and throwing together an ad full of useless, complicated information. A good rule of thumb here is to remember that you should be working harder to craft and simplify your message than your prospect has to in order to decipher it. Someone has to do the hard work – either you are committed to doing it before hand or your customer will need to think about it.
Now if you are serious about saving money and you want to increase your sales, you won’t spend another cent until you stop, take a good hard look at your materials and do whatever it takes to make your message tangible. You don’t have to spend more money to chase find customers. What you really need to do is take the complication and confusion out of your message so that more of your prospects can say “yes” now.