The Motivation to Create Extraordinary Windows doesn't Always Work

This is a window of a local menswear brand in Turkey. It was designed like a Bazaar table, which are famous for the freshness, and cheapness in Turkey, So in the first look you may say that they have given the message.  But is that so?

The fruits are so colorfull and takes the attraction not the products on the window. If you don't look carefully you may never see the shirts with the tomatoes or the shoe by the apples.

Since the products are placed at the corners of the bazar table,  the connection of the shirts with pant or shoes couldn't be establised. They have independent appearence on the window.

Putting the shirts, pants and shoes with apples, kills the fashion and newness perception. Anyway it is the same apple for the last million years isn't it?

Wouldn't it be better with to fit the mannequins, as we know, and putting nothing else on the window.

At least we could save the windows cost!
 

Consumer.ology

Please find my highlights from Consumer.ology by Philip Graves

The goals of market research are laudable: the better an organization understands its customers, the more likely it is that it will make good decisions and avoid bad ones. It’s just that the approach has been misguided. It’s no coincidence that fast-food companies often launch healthy products that customers don’t actually buy. In research, McDonald’s McLean, KFC’s Skinless Fried Chicken, and Pizza Hut’s low-cal pizza all appealed to customers, but in restaurants they failed.

It may surprise you to learn that any market research that asks people what they think, what they’ve done, or what they would like in the future is based on belief. Market research is a pseudo science – in fact it’s consumer.ology – and the beliefs under- pinning it are false.  We are Strangers to Ourselves. And the way in which we can be influenced without realizing that our thoughts have changed, while more than a little disconcerting, reveals what is required if understanding what people think is important to you and why the research process is frequently the cause of its own inaccuracy.

What people see, hear, and feel influences their behavior, but they can’t account for what has happened or how it has influenced them. However, this inability to under- stand ourselves doesn’t stop us answering questions in research. Diners at a restaurant in Illinois were given a free glass of wine to accompany their meal. In each case the actual wine used was the same (and inexpensive). However, different bottles were used to signal different wine qualities. Where the wine was perceived (purely from the label) as being better, people rated both the wine and the food as tasting better, and ate more of their meal. In a second study, people given a wine they believed (from the packaging) was from a superior region rated the wine 85% higher and the food 50% higher.14 How many of these peo- ple, if interviewed two weeks later in their local High Street, would have said: “I enjoyed the meal because the wine looked nice”?

Repeated studies might produce similar results, but that doesn’t mean that the original results are accurate. The fact that people react similarly to consistently executed questioning processes doesn’t tell us anything other than that the cause-and-effect relationship of such research is consistent.

Scientific scrutiny should be directed first and foremost at understanding consumers themselves, rather than merely at the process of summarizing their claims. It reveals what drives customer behavior, how anyone can obtain genuine insights into their own customers, and how much weight decision makers should attach to any claimed “consumer insight.”  

The more familiar and efficient the process is (or any one part of it is), the more likely it is to be driven by mental processes outside of conscious awareness. How much of an American consumer’s soda-buying process is not conscious? The consistent branding of the pack, selected from the same point on the shelf in the store that is visited every day or every week – there’s a strong argument to say that the purchase often functions just like that moment of the car journey, passing smoothly without conscious involvement.

Interesting Consumer Insights

  

More Choice – No Choice

Social psychologists Lyengar and Lepper carried out an experiment that illustrated how, in practice, more choice isn’t necessarily beneficial. They evaluated reactions to two tasting tables at a supermarket; on one they laid out 24 different jams and on the other just 6. While more people elected to stop for the wider selection (60% vs 40%), a dramatically higher proportion purchased from the selection of six jams, whereas only 3% did so from the larger choice. Put another way, less than 2% of people will buy from a display of 24 jams, but 12% will if you give them a choice of just six.

Safe Choice rather than best choice

Being mindful that people are primarily focused on not making a bad choice – in other words making a safe choice, rather than necessarily making the best choice. Why do new products often start out with a trial price? Because most marketers realize that a financial discount can not only help get the product noticed on the shelf, but also offset the unconscious risk associated with deviating from the usual choice. While there has been some debate whether what drives this is a fear of risk (loss aversion) or a preference for the status quo over change, the effective result remains the same: people are often very resistant to trying or doing something new, however logically compelling that alternative is. The conscious mind is far more receptive to new concepts than is the unconscious. New things arouse our curiosity. When the fear of missing out overpowers the fear of making a bad choice, people will buy.

Easy usually wins –Mental Fluency

Studies show that thinking uses glucose, so the more thought any activity requires the more tired we will become. We unconsciously like what’s easiest and most familiar; in other words, what our brains can process most fluently.

The crowd matters – social proof

It has even been argued convincingly that our ability to imitate is what distinguishes humans from other creatures.  When it comes to understanding consumer behavior, despite what most of us would like to tell ourselves, at an unconscious level we aren’t individual pioneers, we’re sheep.

What is first matters most – priming

Much as we may all like to pretend that we’re objective, well-balanced, and rational judges of what we encounter, research shows that we’re primed by our first experiences and, from there, go about seeking evidence that will fit with what we’ve decided is right.

Sound

Charles Areni, who specializes in studying the environmental psychology of commercial space, set up a test in a shop that sold wine, playing either top 40 or classical music. He found that people spent more than three times as much on a bottle of wine when classical music was playing compared to when pop music was selected.

Light

It is well documented that light levels have an effect on brain chemistry: light regulates the body clock and is associated with the release of serotonin, which plays an important role in the regulation of mood, anger, and aggression. However, only people who’ve been diagnosed with a condition such as Seasonal Anxiety Disorder might be expected to recognize that they’d feel better if they got more light.

Two marketing professors created four rooms that were identical except for the height of the ceiling, which they set at either 8 or 10 feet. By giving participants different tasks that required different types of mental processing and analyzing the results, they discovered that people in rooms with higher ceilings performed better at tasks requiring relational processing (to do with identifying and evaluating the connections between different sports), whereas when the ceiling was lower participants performed better at item-specific tasks. They also found statistically significant differences in how two products were evaluated.

Price is not as important as we have used to think

A 2001 study based on click-through analysis of North American web users found that only 8% were aggressive price hunters.

Tourism and Shopping : Realize and utilize the potential!

  

First Some Figures;

• Tax free shoppers spend 4 times more than other consumers
• 82% of Chinese travelers see shopping as preferred activity during travel
• Chinese tourists make up 29% of global luxury spending
• 1/3 of Russian travelers see shopping as a must while traveling
• 50% off all luxury goods are bought in connection with travel’ (Bernard Arnault LVMH)

For the brands in luxury segment and also for some specific locations sales to tourist may have a share of 50%. Cities such as London, Paris has always been the example shopping destinations for toursts but are we aware that Istanbul has become one of the top tourist destinations for shopping too? And do we have a clear plan to utilize this potential?

Lets identify our potential custoemr base;

Turkey is the only country that Chinese tourist don’t take a part in top 3.  Visitors from Middle-East and Russia are the top sources of revenue. 

Top 3 Sources of Tourism Revenue

Country	1st	2nd	3rd
Turkey	Iran	Saudi Arabia	Kuwait
Germany	China	Switzerkand	Russia
UK	China	Kuwait	Saudi Arabia
France	China	Egypt	Russia
Austria	China	Russia	Serbia
Italy	Russia	China	Egypt
Netherlands	China	Russia	Kuwait
Spain	China	Russia	Egypt

Below you can see the year to data fo tourism revenue shares by source countries. The trend shows that Middle –East visitors will be even more dominating the Turkish marketplace in the coming years.

	2015 YTD  Sales Amount%	% Change vs 2014
Iran	14	45
Saudi Arabia	14	115
Kuwait	8	55
Azerbaijan	7	-6
China	6	177
Russia	6	-19
Qatar	4	105
Turkish	4	20
Egypt	2	19
UAE	2	77
Kazakhstan	2	-5
USA	2	69
Lebanon	2	83
Libyan	2	39
Germany	1	18
Rest	25	32
Total		40

Russian tourist flow has decreased by 40% and revenues has decreased by 20% for all countries, which is an important loss to all host countries. 

What should we do to utilize the Potential?

• Investigate & explore current tourist spend in the stores and the city
• Define target cities (store + nationalities)
• Identify Calendar (important dates for holidays)
• Work on partnerships with tax free suppliers
• Training staff
• Placing Multilingual staff in key locations
• Apply in-store signing + tools (tax-free etc)
• Directly target the tourist present in the focus city via local print and partnerships (hotels, transport etc.)
• Leverage tools via tax free partnership to create more awareness and drive traffic

Is More Choice; No Choice?

Social psychologists Iyengar and Lepper carried out an experiment that illustrated how, in practice, more choice isn’t necessarily beneficial.  

They evaluated reactions to two tasting tables at a supermarket; on one they laid out 24 different jams and on the other just 6. While more people elected to stop for the wider selection (60% vs 40%), a dramatically higher proportion purchased from the selection of six jams, whereas only 3% did so from the larger choice. Put another way, less than 2% of people will buy from a display of 24 jams, but 12% will if you give them a choice of just six.
Ref: Consumerology by Philip Graves

The New Rules Of Retail

Robin Lewis states the 7 trends, that will shape the future of retail as below;

From Needing Stuff to Demanding Experiences: "The thrill of the hunt" offered to brand-savvy bargain hunters at T.J.Maxx and Marshalls, and the Apple Store turning electronics shopping on its head.

From Conformity to Customization: Specialized, personalized and localized niche brands like Nike ID and Keurig single-serve coffee machines begin to gain share from large megabrands, the continued growth of special sizes in apparel and footwear and the rapid growth of 3-D printing

From Plutocracy to Democracy: "Accessible luxury" for all: Missoni at Target, Vera Wang and Rock & Republic at Kohl's, Karl Lager “Lagerfeld at Macy's, Isabel and Ruben Toledo at Lane Bryant and the explosive growth of Michael Kors "affordable luxury"

From Wanting New to Demanding New and Now "What’s new today is cloned tomorrow", favoring fast-fashion brands like Zara and Forever 21 that create two new lines every week, the convenience of e-commerce, free delivery and neighborhood stores

From Self to Community Proliferation of social media, social shopping, community interests such as sustainability, global initiatives like human rights and safety; all are trends, no longer simply commercial promotional gimmicks

From Technology for Work to Technology for Life Technology enabling the blurring of lines between “life” and “work,” people are working during their “off” hours and playing during their “work” hours, getting what they need to get done whenever and however they can, using technology to save time.  

The creation of a new consumer segment, Luxury aspirants, drove the launch of many brands to cater to the up-market “yuppie” core of that segment. Brands such as Coach, Lacoste, Bloomingdales, Cusp (a Neiman Marcus spin-off), Dooney & Bourke, Michael Kors, Tumi, Tory Burch, Bonobos and others have successfully captured the contemporary, young, almost-upscale consumer, called HENRY (having enough, not rich yet).

With these trends in mind; he predicts that the traditional definitions of “retail” and “wholesale” will be irrelevant in the future because only those that transform their business models based on our three strategic operating principles will survive in the future.

The 3 operating principles are;

Neurological Connectivity : Today, as consumers expect the moon and stars "because they can" the retailer or brand must far exceed their expectations. They must co-create, with the customer, an experience that indelibly connects with their mind. It must be a holistic experience, consisting of pre-shopping anticipation, shopping ecstasy and consumption satisfaction, and it must be so emotionally compelling that the customer wants to repeat it upon the mere mention of the brand or retailer’s name.

Preemptive Distribution : This is the necessity of gaining access to consumers in front of the multiplicity of equally compelling products or services by existing precisely where, when and how the consumer wants you. Preemptive distribution relies on speed, agility and the ability to reinforce the neurological connection, or brand promise.  By definition, this requires an integrated matrix of all possible distribution mediums, the most important ones being those driven by the new, rapidly evolving technologies as well as distribution into faster-growing international markets.

Value-Chain Control : No consumer-facing business can achieve the highest levels of a neurological connection and preemptive distribution without complete control of its value chain, from creation all the way to consumption. This control is especially important in those parts of the chain that touch and connect with the consumer: namely, market research, where knowledge about the consumer and his or her dreams is determined; production and marketing, where the dream experience is created; and finally, the point of sale, where the experience must be competently delivered.

The retail or wholesale distinction will no longer be meaningful to consumers. Distinct brand names will provide the only worthwhile definition of value, whether it’s the nameplates of stores or the labels on the products in the store. The new business models for retailers and wholesalers alike will be those that can best implement the three imperative strategic operating principles.

He predicts that 80 to 90 percent of strong brands’ revenues will come from their own retail outlets. Finally, retailers such as Macy’s and others will have some form of leasing space to other strong retail brands, as many European and Asian retailers currently do. Perhaps department stores will invite powerful traffic-creating brands to operate “shops” in those categories in which they have been underperforming. For example, Victoria’s Secret, Soma and other brands might be more compelling in Macy’s historically share-losing intimates space. Not only would the department store gain the synergy of two go-to brands, they would also increase space productivity. And of course, the branded retail “renters” would get immediate preemptive distribution (department-store locations everywhere) for a relatively low capital investment. This synergistic strategy is already being employed by Nordstrom with Topshop, Brooks Brothers and “Bonobos shop-in-shops.

All new business entities will be strategically conceived to provide maximum access to consumers and positioned to gain maximum access for the business. Therefore, they will operate in a multitude of distribution channels (mobile, clicks, bricks and catalogs), with a multitude of different formats (from small, convenient and flexible to larger, all-inclusive destinations), and all will compete in as many consumer, product and retail sectors as the brand or service entity can credibly pursue. However, all retailers will fit into one of our three newly defined sectors;

the Commoditization sector;

the Omni-Brand to Consumer sector; or

the Liquidation sector.

Also, the back-end functions’ operations, production, logistics and distribution will be tightly centralized for maximum-scale leverage and productivity synergies, as well as to support the enormously complex and segmented front ends of their businesses.

Incidentally, this redefinition of retail favors what he defines as the Omni-Brand to Consumer model. Because of its optimum alignment with the New Rules, this model is best positioned among all sectors for preemptive distribution and the delivery of a neurologically connecting experience.

Finally, he predicts that e-retailing in all facets, including mobile commerce and the linkage to stores through omni-channel initiatives, will continue to grow. Every large chain will begin to see its stores as either a distribution center or an experiential palace. There will be no neutral ground. However the players that currently operate exclusively in this space, such as Amazon and eBay, will eventually open brick-and-mortar stores for the purposes of preemptive distribution and enhanced delivery of the neurological experience.  These competitors will also continue to redefine the value chain with a set of capabilities and relationships that will make the realization of same-day delivery a feature in every major metropolitan market and will therefore further challenge those stores without any clear point of differentiation.

He emphasizes the requirement of massive differentiation for a retailer or brand to survive. This differentiation has to exist throughout the entire business model, from sourcing to delivery, and most importantly in the eyes of the consumer. If you are not clearly differentiated, even unique, then you are vulnerable to extinction. The highlights below of the transformed traditional models encapsulate all the foregoing, and essentially represent the New Rules for successful change and the effective implementation of  three strategic operating principles

Rules for Transforming Traditional Retailers

Change the Retail Value Proposition: Become a branded neurological experience, not a store.

Adopt a New Structure: Reorganize around lifestyles.

Accelerate Private/Exclusive Branding or Lease Space to Compatible Brands:  Cede control to other powerful brands, but exercise total control over your own.

Preemptively Access Consumers with:

·         Larger urban “lifestyle experiential emporium”

·         Smaller freestanding neighborhood stores

·         Private branded specialty chains (e.g., INC and Arizona Stores)

·         New channels of opportunity (pop-ups, in-home, etc.)

·         Integration of all distribution platforms (clicks/bricks/catalogs)

·         Investment in new technological channels of distribution.

Rules for Transforming Traditional Wholesalers

Change the Wholesale Value Proposition: Become a portfolio of lifestyle-branded retail specialty chains providing neurologically connecting experiences.

Adopt a New Structure:  Reorganize around preemptive distribution strategies through all possible platforms and mediums (clicks, bricks, catalogs and more), including providing exclusive brands to transformed retailers and selecting compatible transformed retailers to lease space for total management and control of individual brands. Pursue cobranding joint ventures with compatible retail specialty chain brands. Create a clear distribution strategy that has exclusive, segmented product by retail partner and price point.

New Rule for E-Commerce and Mobile Pure-Play Brands

This newest and fastest-growing retail sector, which includes Amazon, Zappos, eBay, flash sites, social networks and the older QVC and HSN, must also transform its models to embody the three operating principles. The most successful brands, such as those just mentioned, are all striving to create great experiences as opposed to simply providing convenience. The newest rule for this sector will be driven by its need for greater preemptive distribution. This will mean faster and faster access through mobile purchasing and rapid delivery. He believes this will ultimately lead to e-commerce expanding its distribution to include brick-and-mortar stores, within which they can better provide the neurological experience, particularly for those products requiring a more high-touch experience such as apparel.

Regardless of operating on all distribution platforms, all will attempt to control, if not own, as much of the value chain as possible, from Amazon’s cloud to eBay’s PayPal payment system. All of this will be further intensified as Google, Facebook and others begin to enter the retail world at scale with even more diverse business models.

At the end of the day, those who succeed will be brand managers whose sole responsibility is to manage and control the preemptive distribution of their neurologically addictive and highly differentiated brand from its creation all the way through to consumption.”

 Source: Lewis, Robin. “The New Rules of Retail.” St. Martin's Press

Turkish E-com Retailing in 4 Slides

A short summary for Turkish Internet Retailing

Sources
TUSIAD Dijital Pazarın Odak Noktası: E-ticaret, Sinan Afra, 2014
Southern Europe Ecommerce Report 2014, www.ecommerce-europe.eu
UNCTAD Information Economy Report 2015

End of Brand Worship Era in Fashion

"It’s not enough to be fashionable – one wishes to appear intelligent as well!"

Chanel, Dior, Gucci and the others will continue to develop luxury as a business. At the same time, we are seeing a complementary reaction, which is that a consumer may accept paying for the latest very trendy Dior bag, that she’s seen in all the magazines and advertisements; but she’ll see no shame in going to Zara and buying a T-shirt for 10 euros, because it’s pretty and it’s a fair quality for the price. Then she may go to another store, a bit more expensive but not as well known, perhaps run by a young designer, where she’ll buy a skirt. And these items, when brought together, reassure her and send a message to others that she’s an intelligent consumer, not dazzled by marketing, in charge of her own image.’

In other words, the era of slavish brand worship is over The designer Alber Elbaz, of Lanvin, recently commented, ‘We’ve reached a turning point. Nobody wears logos any more. People aren’t hesitating to mix Lanvin with Topshop. Everything is becoming more democratic.’ 

From "Fashion Brands", Mark Tungate, 2004