Do you believe that giving customers too many choices can overwhelm and lead to fewer sales? Here is a university study that explain this kind of phenomenon.

The Famous Marketing Study About Too Many Choices

Here’s how the study worked:

Sheena Iyengar from Columbia University set up a table laden with jams outside of an upscale grocery store in Menlo Park, CA. Over a period of two consecutive Saturdays, research assistants dressed up as store employees and offered samples of either 6 or 24 flavors of Wilkin and Sons Jams, a British jelly purveyor known for exotic flavors.

Prior to this study, the common marketing theory was that more choices are better for customers. People like more options, so providing more flavors should lead to more sales.

The results from this study proved otherwise.

During the time periods when 24 flavors were offered, 60% of people stopped to sample the jams, compared to 40% when only 6 flavors were offered. These numbers seem in favor of more choices, but the important question is this: which group purchased more?

Of the customers who sampled 24 flavors, only 3% purchased, but of the customers who sampled 6, 30% did the same.

If you run those numbers based on 100 people, 60 would stop when 24 flavors were offered, but less than 2 purchase (1.8 to be exact). When 6 flavors were sampled, 40 stopped at the table, and 12 purchased.

This reminds me of  my own experience shopping in Forever 21,an American chain of clothing retailers. I always be attracted to  a large number of choices, but when it comes time to make a purchase, too many options delay my decision marking, I may even give up the purchase. Forever 21 provide a lot of clothes with too much different styles. I always get overwhelmed. I walk in the stores many times,  but I never purchase anything there except last week.

Companies should be aware that giving customers too many choices actually can overwhelm and lead to fewer sales. But what should be the perfect amount of choices? I will talk about it later on.

http://blog.kissmetrics.com/too-many-choices/

Student Price card, also known as SPC card , is a student loyalty discount program in Canada and the USA, offering discounts and deals on items such as fashion, food, shoes, and travel and more.Students show their SPC Card at participating locations to receive instant savings every time they shop. Offers vary by participating partner locations. Most stores offer 10% discount such as ALDO shoes, Club Monaco, Little Burgundy, American Eagle Outfitters, Family Pizza etc.

Will this student loyalty discount program influence your purchase behavior?

Let me tell you a story about my friend,Ci. Last Friday, we went shopping together. We stopped by Forever 21,  an American chain of clothing retailers which is participating partner of this student discount program. Its promotion policy is getting 10% off only when you purchase 40 dollars or above. What we each want to purchase is less than 40 dollars but add them up is above 40 dollars, and we decide pay together. For other people, they may just buy more goods to get that discount which generate higher sales for the company. And my friend told me that she will always purchase goods at those participating partner even though sometime she did not really save a lot money. She is totally get influenced by this student loyalty discount program.

I think SPC card program is a good promotion to attract young customers, it may even encourage these customers become loyal customers of a company. In long term, it benefits a company a lot.

Last weekend, I went grocery shopping with my friend at Safeway.  I saw some white chocolate with almond, and I really wanted them. However, I hesitated to buy it because it’s a private-label brand by Safeway which I have rarely purchased any product from this brand. And I checked other chocolate brands which I am familiar with such as Cadbury, Lindt, Kinder and Nestle etc…Unfortunately, I couldn’t find any other white chocolate with almond. Well, the Safeway brand chocolate is not expensive and I took the “risk” and brought it.

And my friend also had the similar experience. When she looked for some bread for breakfast, she couldn’t make up her mind in terms of the price and brand. I suggested her to buy Safeway brand’s bread because it’s cheaper than other. What she said was “no, Safeway bread doesn’t taste good”. But she never eat any pieces of Safeway bread, she just get the feeling that Safeway bread isn’t good compared to other which brand mainly make baking products.

Have you ever had the similar feeling that private-label product isn’t good? But what are the reasons?

In my opinion, the reason why I hesitated to buy the white chocolate by Safeway because i think Safeway is not professional to make goods, it is just a grocery store which suppose to sell products instead of making goods.Safeway is actually making many different types of goods, drinks, baking products, cleaning products almost everything. Don’t you think such a company had no specialization;therefore, the products are not good as other which mainly produce some types of goods?

But do you know what comes out when I brought the white chocolate by Safeway private brand? It taste very good and the price is cheap compared to other famous chocolate brand. I will definitely buy it again and recommend it to my friends!

In her blog post “We All Love Limited- Edition Products”, Vicky asked if we have ever bought something that was relatively expensive compared with the similar products and sometimes unnecessary or even useless to us. My answer is YES! I am a big fan of Daisy by Marc Jacob. Every year or a period of time, Daisy has some limited Edition products such as necklace, ring, brooch etc. I almost brought every single item of these unnecessary products myself. Once I see the new Daisy product comes out, I will buy it immediately because I am afraid it will be sold out very quickly. This kind of behavior explains the idea of scarcity strategy that Vicky introduced in her blog.

Scarcity Strategy is not limited to those luxury goods, but also apply to other daily products. From my personal experience,  I go grocery shopping with specific needs, but I always come back home with lots of other unnecessary goods which I don’t need in a short period. What happens when I am in the grocery store?  PROMOTION!!! Last time, I went to superstore and I brought 2 bottles of shampoo which don’t really need that much. Here is what happened. I went there and saw a sign ” *** Shampoo $1.99, limited 2 max. This weekend only.” I did not intend to buy shampoo until I came into the store and saw the promotion. I probably won’t buy the shampoo if the promotion is $1.99 with no time and quantity limited because I may think that the promotion may last long, and I can purchase it next time as I don’t need the shampoo right away.  However, with the time limited, I feel like if i miss this promotion, there won’t be one coming up later. But why did I purchase 2 bottles? I could not explain the reason why, I think that’s maybe what the magic about scarcity strategy is!

Tesco Virtual Supermarket In A Subway Station

Have you ever heard about virtual supermarket?  In August 2011,Tesco Homeplus in South Korea opened the world’s first virtual store in the Seoul subway to help time-pressed commuters shop on the go using their smartphones. How does this virtual store work? Firstly,  a large, wall-length billboard was installed in the station, designed to look like a series of supermarket shelves and displaying images and prices of a range of  over 500 of the most popular products with bar codes which customers can scan using the Homeplus app on their smartphones . After the web transaction is completed, the products are delivered right to their doorstep.  “Korean is the second hard working people in the world,for them, grocery shopping once a week is a dreaded task.”  Therefore, Tesco came out with this brilliant idea to sell their products. This strategy makes productive use of commuters’ waiting time, while simultaneously saving shoppers time spent going to the supermarket.

Does this idea sound cool? The answer is definitely yes! I feel very tired after school or work, and I don’t feel like doing anything. How amazing it will be if the products are delivered to my place when I get home.

Reference:

http://www.tescoplc.com/index.asp?pageid=17&newsid=345

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