Welcome to the the Ivey HBA Retail Marketing Management blog. Retail marketing is an exciting, dynamic, important, and very visible aspect of the overall field of marketing. Throughout the year, students will be posting comments regarding contemporary retailing issues. Although this is intended to be used by Bus 4411 students, industry marketing professionals are also invited to join in if they like.

Sunday, March 29, 2009

Learning from Best Buy

As we all know, consumer confidence is down and costs have increased causing many retailers to go out of business. Most importantly consumers are still spending money, but they have changed how they go through the selection process of shopping. Some things still remain true, such as shopping differences between genders and the need for retailers to understand their different purchasing habits. Retailers need to evolve with customers as their priorities change. In order to evolve with customers retailers have been forgetting to get to understand who is actually shopping at their stores, what is important to them and who is affecting their purchasing behaviour. Consumers are changing why they spend money, so successful retailers will be those who build their experience and brand around these key ideas.

In the case of Best Buy they found that the female audience influences 89% of all technology purchases. Women are more demanding of their retail environment, they need to feel respected in order to relax and open up to the idea of making purchases. This caused an in store renovation in Minnesota, as their store tended to cater towards male tendencies. When women are not as comfortable with the items they are shopping for, such as electronics, an environment that reminds them of home resonates well with women. Reducing the amount of metal over heading, painting the interior warmer colours, large mirrors, and clean bathrooms all make women feel at home and respected.

Retailers should make sure to not get stuck in their ways and pay close attention to changes in customer purchasing behaviour. Previously long aisles in big-box retailers such as Best Buy were used to keep customers in store longer by making them committed to walk down an entire 36-foot aisle. Instead Best Buy broke up aisles into shorter runs no longer than 20 feet to allow for more end caps. Just because customers do not get sucked into walking these long aisles does not mean that they will spend less time in store. Women see end caps as interactive stories, so not only will they spend more time in store but they will be more involved in their shopping experience because they can feel an emotional attachment to products.

In such volatile times retailers have to focus on more than the aesthetics and layout of a store. They will be much more successful if they can get shoppers to gain an emotional connection to products within the store. Retailers need to know in what format customers prefer to be educated. Best Buy found that women would go on line to compare prices and read about what they want to buy, so when they enter the store this information is not important to them. Women want to know how they react to the products in store and to be educated through demonstrations. In order to bring both of these features together Best Buy has created experience zones, where model rooms with targeted merchandise are set up in order to allow for live demonstrations that make shoppers feel at home. Women especially will spend money if they can gain a sense of how the product makes them feel, in these economic circumstances it is most important to make consumers purchase now. More stores like Jill’s Table have been letting customers kick the tires or utilize interactive displays that encourage pre-purchase use and testing.

For consumers experience is essential, but the importance of education is shaping how retailers present and extend product knowledge to create greater brand loyalty. Through these experience zones Best Buy is creating an atmosphere for learning and attracting customers. Relationships could be built through programs targeted to encourage loyalty, such as product–solving services and related classes. Even though an in store experience is targeted towards a gender that may dominate the purchasing decisions it does not mean that the other gender has to be excluded. Some segments may not know what they want until it is presented to them, such as the case with men at Best Buy.


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