Consumers Know Your Enemy! Save Money by Learning Retailer Strategies.

January 12, 2007

How would you like to listen in on a retailer’s secrets to getting consumers to spend money? Below is a recent interview with Pam Danziger, a renowned expert in consumer marketing and psychology. The interview was distributed by the Service Core of Retired Executives, a nonprofit organization that offers business advice for entrepreneurs, to help business owners learn from Pam how to be successful retailers.

Not all questions from the interview are included, only the ones I felt gave some insight into shopping from the consumer viewpoint. What consumers can glean from her answers follow each answer in italics.

Q: What’s shaped the changes you see in retailing?
A: The retail shopping experience is so important, because everyone has everything they need and it’s of good quality. From a broader historical perspective, after WWII, Americans acquired a modern standard of living, which included dishwashers, refrigerators and color televisions – there was an incredible accumulation of standard-of-living goods. Today, it’s about comforts of living and luxury experiences.

If we have everything we need, why buy more stuff? How much are you wiling to pay for “comforts of living and luxury experiences”?

Q: How do you appeal to the consumer who has enough stuff?
A: To captivate and acquire customers today, it takes high customer involvement and curiosity. In my book, Shopping, you will find the POP principles – the seven principles to create a shop that pops. You want to transform the shopping experience from ordinary to extraordinary.

Retailers acknowledge that we have enough stuff, now they’re trying to find ways to sell us more! I picture an overweight person gorging at a buffet, then the restaurant owner brings by the dessert menu.

Q: What suggestions do you have about pricing?
A: Don’t compete on price. You can never reduce your price low enough to remain the lowest cost provider. Consumers are savvy. If you deliver the WOW, the value reinforces the price you charge. You have distinguished yourself and your business as unique and valuable, and you can charge more because of the experience.

You may be getting friendly service and a unique experience at your favorite charming boutique but you could probably save a good deal of money by shopping somewhere else.

I think of an article by Anne Kadet in the October 2006 edition of Smart Money magazine entitled “Pottery Barn Unstuffed” that takes a look at whether the furniture sold by Crate & Barrel, Restoration Hardware, and Pottery Barn is really worth the price you pay. In my opinion the article only confirmed what I had thought all along, overrated and overpriced!

Ben

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Ben

Ben Edwards, the founder of Money Smart Life, saved up enough to buy a Nintendo back when he was 12 years old. When he used the money to buy shares of Wal-Mart stock instead, he knew he wasn’t like the other kids… His addiction to personal finance has paid off for his family and now he’s helping you to afford the life that you want. Check him out on the web at Google Plus, Twitter and Facebook.


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