Start with Why - Simon Sinek

 

From TED TALKS series; worth listening;

 

Start with Why - Simon Sinek

 

 

With Respect to Paco Underhill -II

What Do Shoppers Love?

What do shoppers love? A few important things, we've learned, such as:

Touch:  We live in a tactile-deprived society, and shopping is one of our few chances to freely experience the material world firsthand. Almost all unplanned buying is a result of touching, hearing, smelling or tasting something on the premises of a store-which is why merchandising is more powerful than marketing.

Mirrors:  Stand and watch what happens at any reflective surface: We preen like chimps, men and women alike. Self-interest is a basic part of our species. From shopping to cosmetic surgery, we care about how we look. As we've said, mirrors slow shoppers in their tracks, a very good thing for whatever merchandise happens to be in the vicinity. But even around wearable items such as clothing, jewelry and cosmetics, where mirrors are crucial sales tools, stores fail to provide enough of them.

Discovery: There's little more satisfying than walking into a store, picking up the (metaphorical) scent of something we've been hunting for and then tracking it to its lair. Too much signage and point of purchase display takes all the adventure out of a shopping trip; stores shouldn't be willfully confusing or obscure, but they should seduce shoppers through the aisles with suggestions and hints of what's to come.

Talking:  Stores that attract lots of couples, friends or groups of shoppers usually do very well. If you can create an atmosphere that fosters discussion of an outfit, say, or a particular cell phone, the merchandise begins to sell itself.

Recognition:  In that old TV show Cheers, the theme song went, "you want to go where everybody knows your name." This is a battlefield where the small, locally owned store can still best the national chains, and smart stores make the most of this advantage. Given a choice, people will shop where they feel wanted, and they'll even pay a lime more for the privilege. Even the smallest stores ·can build customer loyalty just by keeping track of what people buy and giving price breaks when appropriate. Our studies show that any contact initiated by a store employee-and I mean even a hello-increases the likelihood that a shopper will buy something. If the salesperson suggests a few things or offers information, the chances rise even higher. Of course, shoppers don't love pushy salespeople, so there's a line here.

Bargains: This seems obvious, but it goes beyond simply cutting prices. At Victoria's Secret, for example, underwear is frequently piled on a table and marked five pairs for $20, which sounds like a much better deal than the $5 a pair normally charged.

With Respect to Paco Underhill -I

Paco will be in Turkey for Local Chains Summit  (YerelZincirler Birliği) next week; 15-16 of April, an event to be followed certainly…

Please find some quotations below  from his book “Why We Buy?”

Advice for the Store Staff

Remember that more than 60 percent of what we buy wasn't on our list. This isn't the same as an impulse purchase. It's triggered by something proposing the question "Don't you need this? If not now, then maybe in the near future?" Use this feeling to boost your sales…

Offer help, try to get the stuff your customer needs to carry that limits her / his desire to put on the products, offer to put the coat/bag behind the counter....

Shoppers are more pressed for time than ever. They've grown accustomed to stores where everything for sale is on open display; and they expect all the information they need will be out in the open. Keep in mind while designing in store- signageand visuals.

Smile: Wal-Mart founder Sam Walton's homespun advice to retailers was that if you hire a sweet old lady just to say hello to incoming customers, none of them will dare steal.

Critical location Dressing Rooms : A shopper who talks to a salesperson and tries something on is twice as likely to buy as a shopper who does neither. Not only does shopper conversion rate increase by half when there is staff-initiated contact, it jumps by 100 percent when there is staff-initiated contact and use of the dressing room. 

Store Design & Signage

The Gap, Aeropostale and Anthropologie-all apparel store chains-put their discount sale products in the back left-hand corner of the store. They've trained their most veteran shoppers to visit the remotest corner of the store. Once they've gotten them to the back, their challenge is to make sure the pathway back to the front of the store is well merchandised and that at least some of the signage is facing the customer going back-to-front.

In the retail environment, a chair's main purpose is slightly different: When people go shopping in twos or threes, with spouses or children or friends along for the trip, seating is what keeps the non-shopping party comfortable and contented and cared for and off the shopper's backJ

Retailers should walk every foot of selling space asking this question: Can I stand here and shop without being jostled from behind? Any place where the answer is no is no place for merchandise requiring a careful look.

Aisles must also be wide enough for baby strollers. Adjacencies should be planned rather than accidental

For the most part, the men and women who design clothing stores do everything possible to allow us to touch all that's for sale. But then, when it's time to design the dressing rooms, they show how completely they misunderstand what happens inside that store. Where do they go wrong? They think of dressing rooms as bathrooms without the plumbing. They see them as booths where shoppers can strip, don the garment in question, emerge for a quick, dutiful glance into a mirror and then switch clothes again. They design dressing rooms with all the romance and glamour of changing stalls at public pools. It's the most misguided aspect of store architecture and design, a trade that at its best isn't terribly responsive to retailers or shoppers. They skimp on dressing rooms, I believe, because they don't want to "waste" space by making these rooms too large. They don't want to blow too much of the budget on rooms that will never be photographed by the fancier design magazines. In fact, the dressing room may be more important than the floor of the store. It's a truism that improving the quality of dressing rooms increases sales. It never fails. A dressing room isn't just a convenience- it's a selling tool, like a display or a window or advertising. It sells more effectively than all of those combined, if it's properly used.

Men & Women

86% of women look at price tags when they shop. Only 72% of men do. For a man, ignoring the price tag is almost a measure of his virility. As a result, men are far more easily upgraded than are women. They are also far more suggestible than women. 

Men now do more purchasing than ever before. That figure will continue to grow. As they stay single longer than ever, they learn to shop for things their fathers never had to buy. And because many marry women who work as long and hard as they do, they will be forced to shoulder more of the burden of shopping. 

Here's the actual breakdown of average shopping time from a study, performed at one branch of a national housewares chain:

Woman shopping with a female companion: 8 minutes, 15 seconds 

Woman with children: 7 minutes, 19 seconds 

Woman alone: 5 minutes, 2 seconds, 

Woman with man: 4 minutes, 41 seconds

A good general rule to design future: Take any category where women now predominate and figure out how to make it appealing to men without alienating women.

Competition

Today everybody is competing with everybody else, and so the threat can come from any direction. It is dangerously narrowminded for a store owner to believe that the only competition is from others in his or her category. .In truth, retailers compete with every other demand on consumer time and money. 

if the experience of spending twenty minutes of unused lunch hour browsing in a computer store is more enjoyable than visiting a bookstore, then it becomes likely that some software will be sold-and impossible that a book will be. The era of the visionary retailer or the manufacturing king is over. In the twenty-first century the consumer is king. Just as fashion comes from the street up, the world of retail is about following shoppers where they are going.

Currency Rate Apparel and Non-Food Sales

TL/$ Currency Rate vs Retail Trade Volume 

 Overall trend of TL/$ exchange rate is parallel to apparel&FTW and non-food consumption trade indexes.

Local Fests are important dates to be considered

Christmas and sale periods are always important time frames for the retailers all around the world, the difference in Turkey is that the consumption show a greater jump in Ramadan (Eid) and Sacrifice Fests compared to new years and sale time. It is an important lesson that a multinational operating in Turkey should consider, where all merchandising and window changes are made in parallel to European guidelines and strong focus on holiday windows and neglecting the local fests.  

 

Apparel&FTW sales less affected comp to nonfood sales in FX-rate changes

After 2014 where TL/$ rate has risen faster compared to prior periods, the difference between non-food retailing and apparel retailing changed in favor of apparel retailing, here one can interpret this outcome as after food products, the budgets allocated to apparel and FTW is affected less than other non-food categories in hard-times.

 

Sacrifice Fest & Ramadan Fest

The retail sales jumped during sacrifice and Ramadan fests in the last 5 years however we should consider that the date of the holly fests change and they are always 11 days earlier compared to previous year. Meaning that Ramadan fests move away from the back to school period to the summer season (we have seen this in 2014), where Ramadan fests sales were not as strong as compared to previous years. Likely Sacrifice fests move close to the "back to school" period which means that in 2015 the retail sales in sacrifice fest in 2015 will be much higher compared to Ramadan fest.  Of course this also means that we will be losing one of the special dates out of 3 where sales rocketed; in 2015 back to school and sacrifice will be together and the Ramadan will be lost in the mid of June.

 

Trade indexes from tuik.gov.tr (in constant prices where 2010 average is 100)

Monthly average Fx rate has been calculated from the tcmb.gov.tr time series data

 

2015 Consumer Trends in Key Words

In the age of google the only thing you need to have is the right key words for the search to reach info. Below is a summary from Euromonitor report and Canada International Markets Bureau, demographics trend report. Hope you have further/good readings from keywords.

Top-up Shopping: To buy less but more often.  This is a consumer preference reflected in plans for smaller, neighbourhood stores.

Mobile Shopping :The widespread adoption of smartphones also means that consumers are able to shop anytime, anywhere and are becoming increasingly demanding in terms of convenience.
 Vegan fashion  brands that pride themselves on animal-free designs are being spotlighted by journalists for their style.

Conscious consumption is on the rise

Female empowerment as consumer driver

Social Talent is definitely the new celebrity, this is the result of a total shift in the way a whole generation consumes their entertainment and selects their influencers from the people like me them.

Online megaphone: Consumers notice online reviews and trust them and this is influencing buying decisions.

Pay-as-you-live generation prefers lightweight living: the “sharing economy” is growing and disrupting the way in which individuals think of space and ownership. Consumers are increasingly preoccupied with access rather than ownership. In collaborative consumption, perhaps ridesharing and homesharing are the most visible activities, as more people share their vehicles and homes. More people are “shedding stuff” – downsizing on possessions to embrace lightweight living. Such consumers access documents, music, film and other media digitally and are happy to rent.

Peer marketplaces, where consumers buy from other consumers, democratise luxury services and let consumers buy in occasional work by those with cookery or office skills.

Omnichannel Shopping is important, altough fast pace of growth seen in online sales,  90% of shoppers surveyed would prefer to buy in a brick-and-mortar store across demographic and age groups.

Millennials, young people born roughly between 1980 and the mid-2000s are the first “digital natives” and are seldom out of the news. Millennial traits include a lack of trust in authority and a level of optimism some find ungrounded. Having grown up on free services, games and social networking, brands are finding it harder to sell to them. Millennials are buying fewer cars and homes, despite being immersed in consumer culture, particularly electronics They are using their comfort with technology to locate best prices and learn about trends. They are more socially consicuos but less brand loyal.

Connected health: more consumers are acting on their belief that monitoring their wellbeing digitally will help them stay well. The consumer need to share, benchmark, compete and stay motivated means this tracking and health-promoting activity is spilling over into discussions on social networking, dedicated social networking platforms / apps – some created by brands such as Nike and Adidas – and blogs. This phenomenon is also related to the broader perception of wellbeing.

Down-aging addresses how and why consumers in a particular age group often act in ways that would be expected of their younger counterparts.Mid-life adults and seniors are seeking a return to their youth and engaging in social behaviour that is typically associated with younger generations.

Age blurring : Not only are some age groups acting younger, other age groups are acting older, leading to greater overlap between the desires, experiences, and interests of different age groups.

Agelessness: Similar to age blurring, agelessness goes beyond simply describing a phenomenon of converging interests to suggest that people are no longer limited by their age and, as a result, consumer behaviour is not defined by it.

Advice for the Store Manager

My notes from Smart Retail (Richard Hammond) combined with my comments;

* Be the person whom you, personally, would also like to be served by
* Smile!
* Sales motivation comes from inside, be sure you are feeding your appetite and energy
* Be passionate for the best retail environment ( for customers and for collegues) not just be sales animals...
* You have to create / do something different to be noticed in the multiple store environment
* If possible volunteer for different projects
*Be the contact person of head-office guys, say would be glad to assist, give your personal number when they visit your store
* Specialize in x let head-office guys know you are the best man to do x
* Create your own consumer portfolio, especially if you working in a company targeting the upper tier customers
* Try to understand your customer, and try to solve their problems instead of being sales animals... As the good saying your customer doesn't want a drill but he wants a simple hole on the wall.
* Retailing is as old as human history and it isn’t about inventing brand-new ways of doing things, it’s about creatively applying simple principles; so do “simple” brilliantly.
* Success tip in retail is about trying things: constantly adapting, nudging, and improving parts of the store
* Know and embrace what your brand stands for
* The question is how to create the happy team for best customer service
* Invest in your team, they are the ones who will take you to your next career step

Consumer Debt Trend and Retail Trade Index

All retailers have to keep an eye on how their consumers expenditure preferences change, below you can find the aggregate consumer loans and credit card debt trend from banking regulation and supervision agency. (Dec'12) (bddk.gov.tr)

As seen in the figure Turkish consumers prioritized  Mortgage and consumer loans over credit cards. Credit card debt has fallen in 2014 for the first time in 5 years.

This may be the reason for our unexplained phenomena of decreasing footfall to our stores?

In the table below Retail Trade Index change from Tuik can be found. It is also the year 2014 which has the smallest growth rate vs prior year in the last 5 years.