We caught up with consumer psychologist Patrick Fagan to explore the love/hate relationship with personalization, how retailers can influence sales figures and why digital technology such as queuing systems and appointment software has the power to build better customer relationships.
Anyone with half a brain knows the psychology of consumer behavior is incredibly complex business.
We might feel like our emotional, mental and behavioral responses are entirely our own, but the truth is that they’re easily swayed.
A 2019 study by the University of Toronto revealed that simply looking at something that reminds us of coffee can stimulate our brains in the same way drinking it does – causing us to become more alert and attentive. Through looking at the effects of priming – subtle cues that can influence our thoughts and behaviors – researchers found people exposed to coffee-related cues perceived time as shorter and thought in more concrete, precise terms.
As you may well already know, brands have been utilizing these cunning little cues to influence our behavior for decades now – but is today’s power-wielding, tech-savvy and ethically-conscious consumer just as easily influenced? And what can retailers learn from behavioral science when it comes to putting their best foot forward?
For some fresh insights into the psychology behind consumer habits and patterns, we caught up with behavioral scientist Patrick Fagan, who is the Co-Founder and Chief Science Officer at behavioral science firm, Capuchin, and part-time lecturer in consumer psychology at both the University of the Arts London and Goldsmiths.
The battle between personalization and trust
While they might not be comfortable admitting it, personalization is something consumers now expect from brands, both online and in-store – and the driving force behind personalization is data.
Data science and behavioral science will have a major impact on the retail sector and its ability to influence future consumer shopping behaviors, argues Fagan.
“Automation, personalization and predictive analytics – they’re all proving to be hugely valuable tools for driving sales,” he says.
“To give a rather crude example, if Alexa hears in your voice that you are feeling down today, and knows from your Facebook account that it’s been a month since you broke up with your partner, while your smart fridge knows you don’t have any ice cream left, they can all predict that you’ll need some ice cream today to cheer you up without you even realizing it.”
However, Patrick is quick to point out that people aren’t entirely naive when it comes to embracing personalization.
“While highly-targeted personalized tactics might be hard to resist psychologically, I suspect people will get smarter and wearier of these approaches in years to come.”
“Trust in brands, institutions and advertising in general could plummet,” he says. “As we enter a “deep fake” age, we could see people turning more to spirituality and tradition (or stability) and away from technology and materialism.”
With stronger data regulations in place and a sturdy push on the consumer’s end for greater transparency, now is the time for brands to establish trust with consumers by ensuring the targeting tactics they employ are ethically aligned with the business itself.
What retailers can do to drive in-store sales
What do modern customers want to see when they enter a store? Are they drawn to new technology or visual displays like moths to a flame? Should you wow them immediately with your best-selling or newest products? Or do they crave warm and friendly human interaction from your store associates?
When targeting consumers in-store, we need to put aside what customers say they want, says Fagan, and focus on what works.
“It’s not important what consumers say they want to see,” says Fagan. “It’s more about what is effective at driving sales. As Henry Ford famously never said: “If I’d asked people what they wanted, I would have built faster horses”.”
According to Fagan, here are the three most important factors retailers should bear in mind when seeking to drive in-store sales:
Physical availability – people are lazy, so make things easy for them to buy. For example, place the highest-margin goods at the front of the store
Salience – people buy whatever grabs their attention, so use POS displays at the start of their in-store journey
Priming – bring certain ideas to mind with subtle cues, like having fresh flowers at the entrance to a supermarket to prime the idea that all the products are fresh.
“Human interaction is also good as it will get people to like the store more (a heuristic called liking),” says Fagan.
Build lasting relationships with attention-grabbing in-store experiences
Many retailers still tend to place in-store experiences in the nice-to-have basket, yet for many modern consumers, in-store experiences play a huge part in the decision to visit your store or to shop online – perhaps even through a competitor.
That’s why leading retailers are investing in creative in-store experiences, such as the new Samsung KX space in London’s King’s Cross, which has VR driving stations, a digital graffiti wall, a digital cockpit showcasing Samsung’s latest smart technology for car interiors, as well as personalized collages and 3D figurines, an AR messaging tree and a wide of events and workshops.
The electronics retailer and manufacturer is using Qudini’s queuing system, appointment booking software and event management software to power these experiences in-store by creating a seamless, engaging and tech-driven experience.
“In-store experiences can nudge sales along,” says Fagan, “but they can also create “flashbulb memories” of brands, forming emotional connections and impressions, which drive future behaviours.”
“For example, if you always went to birthday parties in McDonald’s as a child, that will build memories of McDonald’s as a fun, loving, social place.”
Retailers need to be smarter about how they target consumers, says Fagan, and that means getting to grips with the basics of behavioral science.
“To nudge purchases and influence impressions through both online and offline channels, retailers need to use behavioral science more. When I talk to retailers, I am always surprised by how little behavioral science is being used in-store.”