Consumer Experiences 3

Value Megamalls

(Grapevine Mills) oAlso called super off-price centers or super regional specialty malls oCharacteristics •They carry a large variety of value-oriented retailers such as off-price retailers, factory outlets, and large food and entertainment areas. •They are generally on one level, and in an enclosed mall setting.

Category killers

(Michael's, Home Depot, Hobby Lobby, Garden Ridge, Petsmart) oCharacteristics •Huge, single-focus mega stores that specialize in one merchandise category •Sell limited and deep assortments of products with such low prices that competitors cannot compete oStrengths •Provide comparison shop opportunities. •Offer products and services that are complementary to the core category and offer solutions to the customer's problem.

Warehouse Clubs

(Sams club, Costco) oCharacteristics •Membership club stores that distribute packaged and bulk foods and general merchandise in a no-frills environment •They maintain high volumes, low gross margins, limited assortments and offer products in bulk quantities to warehouse members only. •They have little ambience and offer limited customer service yet sell quality, brand-name merchandise at extremely discounted prices.

Off-Price Discounters

(TJ Maxx, Ross, Marshalls, A.J. Wright, DD's Discount) oOriginated from the needs of department stores to unload excess inventory during the 1970's oThey flourished in the 80's during back-to-back recessions and consumer's new demand for off-price goods. oCharacteristics •Offer brand-name merchandise at lower prices than department stores or specialty stores •High volume gained through lower markup and faster inventory turnover. •Attract many fashion-conscious consumers.

Discount Department Stores

(Wal-Mart, Kmart, Target) oCharacteristics •Minimal décor •Utilitarian materials •Floor plans crowded with merchandise; over-assorted? •Located in freestanding buildings or shopping centers on the outskirts of cities (suburbs). oStrengths •Low price •Convenient location •High consumer demand

AIOs

AIOs- Activites, Interests, and Opinions- are most widely used to approach the psychographic research.

Trends that have impacted the growth of value retailing

Demographic Trends oSlow Growth in Disposable Personal Income oIncome Inequality oThe Graying of America •Consumer Patterns oShift in the Meaning of Value: From purchasing cheap merchandise to a new status symbol. oOne-stop shopping oComparison-Shopping oBrand-Consciousness •Retail Trends oPower Retailers •Value retailers who have expanded into several categories, using sophisticated inventory management, finely tuned selection, and competitive pricing. •Wal-Mart and Dollar General are good examples of power retailers oIncreasing Efficiency •Retailers are implementing several strategies increase cost efficiency •Inventory deployment and inventory reduction strategies are being automated and implemented to reduce costs. •More and more retailers, both big and small, are incorporating complex distribution systems into their supply chains.

Merchandise themes

Ethnicity Affluence Craftsmanship Nostalgia Spirituality Holidays

Examples of retailers using entertainment in their experience

FAO Schwartz oConsumers can fill out adoption papers for baby dolls purchased from the store's nursery. oLive dancers performing on the giant piano keyboard Bass Pro Shops oShoppers are engaged with the outside world throughout the store's 280,000 square feet of selling space. oInnovative store design offers numerous interactive experiences for shoppers such as : • Archery ranges • Fish tanks

Know the 5 types of entertainment retail centers

Family Entertainment retail centers High-tech entertainment centers High-impact film venues Entertainment driven retail Night-time entertainment centers

Ibrahim and Wee, what did they suggest?

Ibrahim and Wee (2002) suggested that the entertaining shopping experience is influenced by 3 factors : oRetailer factors : atmosphere, store features, parking oCustomer factors : hedonic or utilitarian orientation oTransport mode : effort, protection, comfort, enjoyment •The shopping experience begins BEFORE the consumer reaches the retail destination.

Definition of "lifestyle"

In terms of marketing, lifestyle describes the behavior of individuals, small groups of interacting people, and large groups of people who act as potential consumers.

Different elements that contribute to the overall retail entertainment mix

Music Lighting Celebrities Sales associates

Lifestyle Retailers

Ralph Lauren, Apple, IKEA, The Gap, Starbucks Coffee, The Container Store, Harley Davidson

VALS; motivations; 8 groups

o3 primary motivations in the VALS system : •Ideas •Consumers motivated by ideals use a belief system when making a purchase & not concerned with others views. •Achievement •Consumers motivated by achievement make decisions on the perceived views/opinions of others •Self-expression •Consumers motivated by self-expression buy products that have any impact on the world around them. oEight VALS groups emerged from these motivations •Innovators, Thinkers, Achievers, Experiencers, Belivers, Strivers, Makers, Survivors

Nostalgia

oA longing for and reflecting on times past. oThis theme often is used in the historic town center oThemes associated with nostalgia and consumption oObject-related experiences are related to past memories. oExamples- cracker barrel

Ethnicity

oA theme that attracts customers through differentiated product assortments. •Examples : oRestaurants or cafeterias offering ethnic-themed cuisines during specified times of the year. oCollege dining halls providing different "ethnic-themed" food stations. oEthnic food festivals within amusement parks. oMass merchant retailers stocking ethnic-themed groceries, apparel, housewares, and in-store circulars targeted at specific consumer groups. oSpecialty stores and/or apparel discounters providing branded apparel lines that attract specific ethnic markets.

Affluence

oAffluent Consumers •More U.S. households have an annual household income of $100K or more. •Many U.S. households can afford to buy more than necessary essentials. •Affulent consumer's consumption refelcts their goals or status o"Veblen Effects" (Bagwell & Bernheim, 1996) •When consumers do not want to pay less for products that signal wealth, even if they have the same functional benefits. oM. Hickens (1999) •Found that increasing numbers of affluent consumers seek out limited-edition objects or experiences. •They desire unique, customized experiences in such areas as automobiles, vacations, entertainment, and cuisine over tangible products.

Celebrities

oCelebrities endorse through a variety of modes. oCelebrity endorsers should have three attributes •Credibility •Attractiveness •Power to successfully influence a company or product image oCelebrity endorsement relies on the symbolic meaning of the endorser. oAlthough the use of celebrities may be attention-getting and/or interesting, most consumers do not find them believable.

Factory Outlets / Outlet centers

oCharacteristics •Combining the status symbol of a designer label with the basic draw of a discount price •Typically located away from the main streets. oStrengths •Viable during both weak and strong economic times •The "treasure hunt" experience by finding brand-name merchandise at reduced prices.

Dollar Stores

oCharacteristics •Extreme value retailers •Offer consumable basic products •Convenient locations •Smaller store formats ( than Discount dept stores) •Low prices oFormats •Dollar stores (Dollar General) •Single-price retailers (Dollar Tree) •Close out chain (Big Lots) oStrengths •Provide quick and easy access in neighborhoods •Increasing shopper penetration •Narrow, focused assortments ; efficient distribution systems ; effective inventory control. •Carry more national brands today

Craftsmanship

oCraft themes used in the market can add value to the shopping experience beyond the actual product purchase. •Examples: Rolex

Sales associate

oImpact of Sales Associates on Consumer Experience oSales associates play an important role in providing positive experience to customers. oPositive experiences with sales associates can enhance the value of shopping at a store. oSales people can communicate the vision and mission of the retailer to consumers and contribute to the value of the total retail entertainment experience

Disadvantages of price promotions

oLeads to declines in profit margins oHas more direct price competition between national brands and their own store brands. oUndermines consumer perceptions of product quality and store image, lowering the probability of future purchases.

Lighting

oLighting plays an important role in attracting customers and selling products. oWhen used properly, lighting sets the stage for a positive retail experience and can stimulate sales. oThe presence of natural light via skylights increases sales. oLighting communicates status level of a retailer : •Soft, natural lighting = used more by prestigious stores •Bright, harsh lighting = used more by discount stores oExamples???? •Ring doesn't sparkle the same outside as it does in the store

Music

oMusic contributes to retail marketing at the point-of-purchase and in advertising. oIt is made up of a complex mix of controllable elements that provide stimuli for moods and emotional reactions oRetail brands sell music that is appealing to their customers' lifestyles oThe rhythm, pitch, volume, and instruments used can impact the shopping environment.

Online Auctions

oOnline auctions enable consumers to find quality products, cheap prices, novelty items, and quick transactions oThe auction-based electronic market represents a change of commerce from business-to-consumer (B2C0 to Consumer-to-Consumer (C2C) oParticipating in online auctions offers a variety of hedonic benefits. •Variety •Explorational search process •Fun and thrill in the bidding process •Boosting ones ego about their competence in taking risks and making decisions

Advantages of price promotions

oProvide greater value via the discount oAttracts consumers to the store. oGenerates additional traffic

Value-Conscious Consumers

oRecession and economic unrest made consumers particularly cautious about how and where they spend their money. oConsumers are on a constant search for low prices and are actively seeking out new formats in order to get a better price

Holidays

oRetailers take advantage of the numerous holiday themes that take place throughout the year to provide customers with new and exciting shopping opportunities. oCostumes can be sold for Halloween, Christmas and other themed events. oColors can be representative of specific holidays such as red for Valentine's Day; green for St. Patrick's Day; red, white, and blue for July 4th, Memorial Day, Veteran's Day, Flag Day

Spirituality

oSpirituality drives consumer's desire for meaning, purpose, and deep life experiences. oThe September 11, 2001 terrorist attack in the U.S. created massive outpouring of spirituality. oAging baby boomers are transiting into new life stages where they are becoming more philosophical and spiritually oriented toward life. oThemed retail blends the elements of entertainment, therapeutics, and spiritual growth into a unique harmony to attract customers and establish relationships with them. oThis interest in spirituality is expected to grow because baby boomers are maturing into the life stage where a focus is placed more on non-material assets such as family, community, and spirituality, instead of material assets. oMany present-day marketing campaigns are aimed at linking goods and services with spiritual values

Family Entertainement retail centers

oTarget market is generally families with young children and residents of the area. oProvide a limited amount of merchandise and or product assortment oKey attractions are family entertainment such as climbing walls, small-scale rides, games, etc. oExamples??? •Chuck E Cheese, Amazing Jakes, Nickel Mania

High-impact film venues

oTarget market: showcase film destination consumer oRetail offerings: restaurants, bars, other forms of entertainment, merchandise oKey attractions: high definition film theater, 360-degree immersion film, film-based stimulator and/ or virtual reality oExamples? •Imax theaters

High-tech entertainment centers

oTarget market: teenagers oRetail offerings: food, beverages, merchandise oKey attractions: sophisticated video games, simulators and virtual reality oExamples ? •Main Event, Dave and Busters

Entertainment driven retail

oTarget market: visitors (tourists) oRetail offerings: food, beverages, merchandise oKey attractions: entertainment

Night-time entertainment centers

oTarget market: visitors of theme parks oRetail offerings: restaurants, nightclubs, entertainment, merchandise oKey attractions: theme based entertainment

Value Retailers

oValue retailers are growing faster than any major retail format oValue stores are raising their standards for convenience, the in-store experience, and assortments to match or outclass their traditional competitors.

Democratization of luxury

•"Democratization of Luxury" Increasing availability of Luxury products and services at lower price points Consumers increasing ability to purchase those products

Cacooning

•"The act of insulating or hiding oneself from the normal social environment due to its perception as being distracting, unfriendly, dangerous, ect. o"Socialized cocoon" Retreating to the privacy of one's home ; a "homebody".Spending time at home instead of going out. o"Armored cocoon" Establishing a barrier to protect oneself from external threats. o"Wandering cocoon" Using technology as a "barrier" to insulate oneself from the environment. Telephones and the internet enable people to maintain contact with others from virtually anywhere

Virtual communities; motivations

•Characteristics of Virtual Communities oVirtual communities do not have the limitations of a physical location oInformation in virtual communities can be spread out to millions of consumers instantaneously. •Motivations of Using Virtual Communities oInformation Exchange oRelationships oSocial support oEntertainment

Challenges for retailers?

•Consumers are less excited about shopping than they used to be. •Over-storing has produced nearly twice as many retail outlets as needed to support the U.S. population. •In this environment, retailers must do more than providing conventional enticements to attract consumers. •The shopping experience itself rather than the procuring of products, per se, is becoming more important to consumers

What has impacted lifestyle?

•Economic Conditions oAs people became more concerned with the preservation of financial and personal assets, there was a renewed interest in products that allowed consumers to conserve money and products that slowed the aging process. •Globalization oA growing homogenization of material culture through the export of American television series, films, rock music, and other products is influencing national or cultural identities. oToday, consumers can buy the same product almost anywhere in the world. •Technology oTechnology impacts on retail with automation and mass production. oTechnology impacts on consumers with reduced time at work and in the home, more home-based activities, an increased reliance on catalogs, professional shoppers, and home automation, and the trend toward "telecommuting."

Societal trends leading to entertainment retailing

•Increase in the number of multi-channel companies •Mass customization- Being able to design your own car online, Ford •Advantages in technology-You can check out what a store has before you actually go in •Shoppertainment- Barnes and Noble book readings •Edutainment- Michael's and their scrapbook/ cake decorating classes

Psychographics

•It is a market tool to identify, understand, and target consumer segments that have a similar set of preferences for their products and services. •Psychographics are linked to lifestyle. •Psychographics allow marketers to understand why consumers buy in addition to who buys. •Many empirical studies have conducted psychographic research to segment a consumer market. •Fashion, home décor, fitness, sports, and the culinary arts are some of the industries currently catering to markets with specific lifestyles. •Accurate psychographic research is important in retaining AND gaining customers. •More research needed to understand the internet customer and how they behave online, what they desire/need, and how they shop.

How are shoppers expecting to be entertained today?

•Most shoppers today expect to be entertained when they visit a retailer through the Music, scenery, interactive experiences.

Evolution of lifestyle retailing

•Post-modern consumer society oPeople are freer to select the set of products, services, and activities that define themselves. oThey create a social identity through these selections oShopping has become more than an acquisition but rather, the purchasing of an identity.

Price Promotion Matrix; Who? What?

•Retail Price Promotion Matrix (Seiders & Voss, 2004) oThe effectiveness of a retailer's price promotion strategy depends on how retail offerings are distinguished based on two fundamental traits : •Assortment overlap = The degree a retailer's assortment is similar to or distinct from another retailer •Assortment life span = The speed at which an assortment loses value or becomes obsolete over time

Lifestyle Retailing

•Segmentation oIndividuals are sorted into groups based upon the things they like to do, how they like to spend their leisure time, and how they choose to spend their disposable income. oMarket segmentation strategies determine the types of products and brands appealing to a designated lifestyle segment. •Positioning oRetailers can position themselves with product or service offerings that are closely associated with the lifestyles of specific consumer segments. oA lifestyle retailer should develop and provide special and identifiable attributes so that its customers can have a unique consumption experience. •Communication oInformation on the lifestyle characteristics of consumer segments is valuable to firms when planning communication strategies. oThe lifestyle analysis of a firm's target market influences media strategy

Tourist shopping behavior

•Shopping is the second largest travel expenditure following accommodation making up almost 36% of a tourist's travel expenses. •Shopping opportunities can even be the primary purpose of tourism travel. •Tourism destinations that are shopping entertainment complexes •The link between tourism and retail is globally acknowledged

Shopping as a leisure activity?

•The shopping experience, rather than the product per se, has become a major emphasis of those responsible for a substantial portion of consumer goods expenditures. •For many consumers, shopping is a leisure activity that is an integral part of their lifestyle.

What is thematic retailing? Influences?

•Thematic Retailing.identifies and develops a story line that promotes a retail identity and brand •Concept and Influences on Consumer Experience oMany consumers seek shopping experiences that provide an escape from the mundane. oRetail can create a world of fantasy for consumers. oRetailers set the stage for consumer experiences using products, services, and entertainment as supporting props in themed retail dramas. oRetailers must build stimulating / pleasing designs, appropriate color schemes, captivating sound systems, and signage into their themed retail mix. oThematic retail environments contribute to the sensory experience because shopping is thought of as a "pleasure-seeking" experience.

What 3 elements are used to attract customers?

•Thematic retailing uses elements of entertainment, education and the consumers' experience to attract customers. •It adds hedonic value to otherwise utilitarian shopping. •It helps differentiate one retail brand from another.

Themed restaurants; characteristics of, challenges?

•Themed Restaurants oRestaurants can add incremental revenue per visit with theme-related merchandise. oThe majority of themed restaurants are visited by tourists as opposed to local residents. oThe key to any resturant's success is repeat business oAfter the novelty is gone, themed restaurants are doomed for failure unless they harness the basics of any restaurant's success―good food and good service. oExamples : Chuck E.Cheese, Medieval Times, Dicks

Perspectives of a bargain?

•Two Perspectives of a Bargain oFrom an economic standpoint, a bargain leads to the objective monetary benefits. oFrom a psychological standpoint, getting a discount or bargain satisfies ego-expressive goals ; attributing it to skill and effort.

TV home shopping personalities and characteristics of this type of format

•Two television shopping formats oTelevision shopping networks (QVC, Shop at home, Shop NBC) oInfomercials •Characteristics of television shopping formats oHave a fun factor. oAre informational oGive products vitality. oViewing these channels is a leisure activity •These two retail venues attempt to develop social relationships with their audiences through warm, friendly, and spontaneous commentators.

Lifestyle trends

•Wired or Wireless Consumers oMore people are using the Internet, cellular phones, or mobile phones for various purposes.(shopping, purchasing, browsing,ect.) oConsumers are increasingly embracing technology that enables them to better control their shopping experience. oMore people are using the internet to make purchases. oGenerations X and Y are the 1st to fully embrace online purchasing. •Self-Expression oFashion used to be dictated by a "dress-to-impress" motivation. oIt has evolved into a "dress-to-express" philosphy. oShopping reflects the shopper's individuality and provides an external validation of his or her lifestyle perspective.