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For Shufersal, the leading food retailer operating supermarkets in Israel, it looks like the sky is the limit. This is a message strongly received from the CEO of Shufersal, Itzhak Aberkohen, in a recent interview given to Globes business newspaper (for its annual publication of consumer-based equity-ranking of brands, July 2017). Shufersal is already a major national retailer, but since the collapse and sell-off of the main competing food chain Mega last year the road ahead is clear more than ever for Shufersal to ride on to stardom. The plans presented by the retailer’s CEO are definitely leading in that direction on different fronts.

  • Note: Shufersal has also been known as ‘Supersol’ but it appears that the retailer is moving to suppress that name in favour of enhancing its Shufersal brand name. The original name chosen for the retailer almost sixty years ago was composed by joining two words: ‘Shufra’ from Aramaic meaning excellent and ‘Sal’ which means basket in Hebrew. The retailer founded the first modern American-style supermarket in Israel in Tel-Aviv in 1958. Israelis frequently name the retailer ‘Supersal’ or ‘Shufersal’. The official choice of ‘Shufersal‘ by the company should make the consumers happy while remaining as true as possible to the legacy name.

The retailing company Shufersal operates over 270 stores. They are divided into multiple sub-chains of different store formats, designed to target different consumer segments or accommodate distinct shopping situations or goals. Three main sub-chains are: “My Shufersal” (the core sub-chain of ‘classic’ supermarkets in neighbourhoods); “Shufersal Deal” (large discount stores); and “Shufersal Express” (small convenience stores in neighbourhoods). Like most food chains, the stores offer in fact not only food and drink products but a larger variety of grocery and housekeeping products, and may sell as well toiletry or personal care products. Shufersal operates in addition a channel for online or digital shopping. It also has its own brand of products carrying the retailer’s name. The CEO seeks to enhance the company’s capacities in these domains, and then extend further. An important aspect in his plan is the digital transformation of the company’s retail operations and services.

  • Note that supermarkets in various countries may selectively add in different times and locations other product ranges (e.g., books and magazines, electric home equipment, housewares).

Shufersal is now on the verge of making a strategic entry into the field of ‘pharma’ retailing with the acquisition of New-Pharm, the second-sized pharma chain in the country. The food retailer already sells toiletry products in its stores, as indicated above, but it has no access to cosmetics (e.g., perfumed lotions, make-up) and non-subscription medications (via pharmacy departments). Taking over New-Pharm would provide it with this capability through the pharma-dedicated and licensed stores. The dominant leader in pharma in Israel is Super-Pharm, which gets the respect of Mr. Aberkohen as a successful and highly professional retail competitor in that field. Shufersal should be able to get better terms for purchasing toiletry products for its supermarkets and other stores, but the addition of cosmetics and pharmaceuticals seems less fitting its current line of business. It makes sense if the retailer had department stores where one of the departments would sell cosmetics, but that is not the case of Shufersal; it would probably have to operate the pharma stores separately. Undertaking the responsibility of operating pharmacies could create even greater complications that may outweigh the benefit of margins from selling OTC medications, nutrition supplements and other devices.

The deal is still awaiting approval of the antitrust supervisor by the end of August 2017. The main obstacle comprises 6-8 flagship stores that the supervisor may not allow the food retailer to have. Aberkohen has said in the interview that the acquisition of the pharma retailer would not be worth it without those stores. There could be additional restrictions due to vicinity of “Deal” stores and “My” supermarkets to some New-Pharm stores.  Aberkohen believes that the increased variety and assortment of toiletry products the company will be able to sell together with the new categories will make an important contribution to its sales potential but will also create a more balanced competitive challenge against Super-Pharm (i.e., as two equivalent retail powers) that will benefit consumers in personal care and grooming. The suppliers are concerned, however, that the bargaining power of Shufersal will become significantly, perhaps exceedingly, stronger in toiletry, and that the retailer will link the trading terms for their presence in New-Pharm stores with presence of their products in the Shufersal stores (Globes [Hebrew], 15 August 2017).

Shufersal’s CEO seems to have little regard for its follower Mega under a new ownership. Most of the chain, neighbourhood supermarkets (“Mega City”, 127 stores), was bought from a holding company (“Alon Blue Square”) in a rather bad state by a medium-sized food retailer of discount warehouse-like stores (“Bitan”) in May 2016. Other discount stores were sold and distributed among some smaller discount retail chains. Since then a few more supermarkets of Mega were apparently sold or closed. Bitan has roughly more than doubled the total number of stores in its ownership since acquiring Mega (on a scale from 70-80 to 180-190). Aberkohen argues that Bitan seems to be taking hold of the operation of Mega City but there is still much work ahead to re-organise its whole retail business. Occasional signs in the stores imply that the new owner is still grappling in effort to manage the additional supermarket chain. There will also come a time to deal with the effort and redundancy of keeping two unconnected brands of the two sub-chains of discount stores and supermarkets (“Bitan Wines” and “Mega City”, respectively).

Mr. Aberkohen has no greater regard for the other discount food retailers (the more familiar and popular of them is “Rami Levy” with 44 stores, increasing by 10 stores in the past year). In his view, Shufersal does not consider itself as opposed to Rami Levy or the other players; it is engaged in its own plans and mission with a focus on innovation. A key to success in the long-term, in his opinion, is an emphasis on managing existing (‘same’) stores and innovation, not adding more and more floor area. He thus maintains that while the competitors, particularly Bitan/Mega, are so busy handling the additional space in new stores, Shufersal will have the time it needs, as a window of opportunity, to create innovation (e.g., Internet, robotics) and gain an advantage of 3-5 years ahead.

  • So far consumers have not gained in terms of cost of shopping from the deal of selling Mega. According to Israeli business newspaper “Calcalist” there are worrying signs to the contrary. Mega under its new ownership has not been pressuring prices downwards (attributed to financial obligations of its owner Nahum Bitan), and Shufersal that had identified this weakness, took the opportunity to raise prices in its stores while gaining in bargaining power vis-à-vis its suppliers. A rise in prices (i.e., index of barcoded products) and an increase in sales revenue in the food retail sector (including non-barcoded outlets) point to a change in trend from 2014-2015.

The CEO of Shufersal is looking forward to digital transformation of retailing and shopping experiences, involving innovation both in online self-service customer-facing platforms and in the preparation and delivery of online orders. He expects great advances in the operation of logistic centres where robots and humans will take part in collating products from shelves for online orders and packing them for dispatch and delivery to customers. Three centres are in development. Enthusiastically, he proclaims that the online apparatus will involve a lot of automation, digital (features) and robotics.

Shufersal is clearly adopting the new language of data-driven marketing, Big Data, and digital automation of interactions with its customers-shoppers. The company is said to pull together to that aim its information systems, supply chain, and data pools from its customer loyalty club and club of credit card holders. This will enable it in the future to customise offers and services much better to its customers. Aberkohen talks of providing services to suppliers based on their platform of big data but he may have to think more in terms of collaboration, especially with the stronger manufacturing suppliers (i.e., sharing data on shopping patterns in exchange for support and aid in resources for analysing the data using advanced tools and methods of data science). Aberkohen believes that in the future we will see fewer stores, and smaller ones, due to transition of shoppers to online ordering and direct delivery to their homes or offices (currently online orders account for 12% of sales at Shufersal).

Moreover, the CEO is expecting a considerable expansion in ranges of products the retailer will make available to its customers via online shopping. This will include also orders from overseas (e.g., through partners in the US). He refrains from likening Shufersal to Amazon but is surely getting inspiration from the international online master. It could relate to: (a) A wide variety of products that a retailer can offer on the Internet (besides, Amazon could be getting more deeply engaged in food retailing with the recent pending acquisition of Whole Foods); (b) Employing robotics and humans in logistic centres; and (c) Advanced and dynamic analytics to customise offers to shoppers.

  • The measure of consumer-based brand equity of Globes/Nielsen is based on three key metrics: willingness to recommend, intention to buy tomorrow, and favourability. The top brand of food chain stores is Rami Levi (discount stores). This position may be credited to the personal character and initiative of Mr. Levi and his high media profile (e.g., proclaiming to fight and act for the good of consumers). Shufersal is in the second-best position in the eyes of consumers. The original brand of Bitan is ranked 7th whereas Mega City has fallen down to the ungracious 11th place (one before last).

Shufersal’s own brand currently captures about 20% of total sales. The CEO aims to increase this share to a level of 40%-50% to be in par with similar retail chains overseas. The retailer will have to walk on a thin rope when cutting down purchases of branded products from national manufacturers without ruining relations with them. Shufersal already offers milk, cheese and meat (beef) under its private label (a precedent in Israel), yet the CEO admits they still value and need their relationship with the leading national producer of these food products (Tnuva). In the past Shuferal has also had a bitter battle with another producer of dairy and other food products (Strauss). Other categories in which the retailer markets under its name include baby diapers and milk formulae; the CEO has the full intention to add more product types to this list and expand the shelf space and volume assigned to Shufersal’s own brand. The proposition according to Aberkohen is to bring quality products at value-for-money. Shufersal has taken additional strategic steps in recent years to tighten their control over the display of products in their stores: assigning their own workers to place most products on shelves in-store instead of allowing representatives of suppliers to do so, and bringing-in most products to stores independently from their logistic centres.

The CEO of Shufersal is cognizant that many consumers do not strive to shop in large discount stores that are usually located at the outskirts of cities or in industrial areas. Often enough consumers prefer convenience to lower cost. People who work long hours, including young adults early in their career, and even students, cannot afford the time or pass over the option of shopping in those stores. It may be added that for older consumers (e.g., pensioners), discount stores may simply be out of reach, especially if one does not drive. Supermarkets in shopping malls (so-called ‘anchors’) are also considered by Aberkohen as obsolete. These consumers-shoppers prefer visiting (at least during the week) a supermarket or even a convenience store in their neighbourhood — they are too pressed in time with duties or other engagements to bother about the somewhat higher cost (Mr. Aberkohen brings his own daughter as an example). Nevertheless, if the neighbourhood stores do not work out as a practical option, they will probably order online.

To top the list of the plans of Shufersal’s CEO, he sees the retailer engaged in a variety of peripheral services consumers may like to have at easy reach such as non-banking financial services (e.g., loans), insurance, travel (including holidays abroad), and optometric (eye-glasses). Some of the services are likely to be made available only online (e.g., insurance, travel), next to additional shopping options Shufersal expects to generate. Although Aberkohen does not refer specifically to the mobile channel, it is reasonable that much of what he describes in relation to an online channel is necessarily applicable these days in a mobile channel.

Shufersal’s CEO has high aspirations for the retail company he leads. Aberkohen’s plans may change not only the consumption culture in the country, as he maintains, but also the nature and character of the company itself. Hence, Shufersal’s management will have to watch carefully what areas it is about to enter and how qualified the company is to make those extensions. They will have to consider, for example, how to integrate the business areas of New-Pharm into the portfolio of Shufersal. They should not underestimate the trouble that discount retailers can cause them. Moreover, as Shufersal makes more moves to fortify its retail business, its management must act with sense and sensibility amid tensions that such moves cause, and are likely to continue to cause, with suppliers as well as consumers. The expansion and addition of products and services for the benefit of consumers is a positive venture, but Shfuersal still has to convince them as such, every day.

Ron Ventura, Ph.D. (Marketing)

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A shopper may well know what types of products he or she is planning to buy in a store, but what products the shopper will come out with is much less sure. Frequently there will be some additional unplanned products in the shopper’s basket. This observation is more often demonstrated in the case of grocery shopping in supermarkets, but it is likely to hold true also in other types of stores, especially large ones like department stores, fashion stores, and DIY or home improvement stores.

There can be a number of reasons or triggers for shoppers to consider additional products to purchase during the shopping trip itself — products forgotten and reminded of by cues that arise while shopping, attractiveness of visual appearance of product display (‘visual lift’), promotions posted on tags at the product display (‘point-of-purchase’) or in hand-out flyers, and more. The phenomenon of unplanned purchases is very familiar, and the study of it is not new. However, the behaviour of shoppers during their store visit that leads to this outcome, especially the consideration of product categories in an unplanned manner, is not understood well enough. The relatively new methodology of video tracking with a head-mounted small camera shows promise in gaining better understanding of shopper behaviour during the shopping trip; a research article by Hui, Huang, Suher and Inman (2013) is paving the way with a valuable contribution, particularly in shedding light on the relations between planned and unplanned considerations in a supermarket, and the factors that may drive conversion of the latter into purchases (1).

Shopper marketing is an evolving specialisation which gains increasing attention in  marketing and retailing. It concerns activities of consumers performed in a ‘shopper mode’ and is strongly connected with or contained within consumer marketing. Innovations in this sub-field by retailers and manufacturers span digital activities, multichannel marketing, store atmospherics and design, in-store merchandising, shopper marketing metrics and organisation. However, carrying out more effective and successful shopper marketing programmes requires closer collaboration between manufacturers and retailers — more openness to each party’s perspective and priorities (e.g., in interpretation of shopper insights), sharing information and coordination (2).

In-Store Video Tracking allows researchers to observe the shopping trip as it proceeds from the viewpoint of the shopper, literally. The strength of this methodology is in capturing the dynamics of shopping (e.g., with regard to in-store drivers of unplanned purchases). Unlike other approaches (e.g., RFID, product scanners), the video tracking method enables tracking acts of consideration, whether followed or not by purchase (i.e., putting a product item in the shopping cart).

For video tracking, a shopper is asked to wear, with the help of an experimenter, a headset belt that contains the portable video equipment, including a small video camera, a view/record unit, and a battery pack. It is worn like a Bluetooth headset. In addition, the equipment used by Hui et al. included an RFID transmitter that allows to trace the location of the shopper throughout his or her shopping path in a supermarket.

Like any research methodology, video tracking has its strengths and advantages versus its weaknesses and limitations. With the camera it is possible to capture the shopper’s field of vision during a shopping trip; the resulting video is stored in the view/record unit. However, without an eye-tracking (infrared) device, the camera may not point accurately to the positions of products considered (by eye fixation) in the field of vision. Yet, the video supports at least approximate inferences when a product is touched or moved, or the head-body posture and gesture suggest from which display a shopper considers products (i.e., the ‘frame’ closes-in on a section of the display). It is further noted that difficulties in calibrating an eye-tracking device in motion may impair the accuracy of locating fixations. The video camera seems sufficient and effective for identifying product categories as targets of consideration and purchase.

Furthermore, contrary to video filmed from cameras hanging from the ceiling in a store, the head-mounted camera records the scene at eye-level and not from high above, enabling to better notice what the shopper is doing (e.g., in aisles), and it follows the shopper all the way, not just in selected sections of the store. Additionally, using a head-mounted camera is more ethical than relying on surrounding cameras (often CCTV security cameras). On the other hand, head-mounted devices (e.g., camera, eye-tracking), which are not the most natural to wear whilst shopping, raise concerns of sampling bias (self-selection) and possibly causing change in the behaviour of the shopper; proponents argue that shoppers quickly forget of the device (devices are now made lighter) as they engage in shopping, but the issue is still in debate.

Video tracking is advantageous to RFID  and product scanners for the study of unplanned purchase behaviour by capturing acts of consideration: the RFID method alone (3) enables to trace the path of the shopper but not what one does in front of the shelf or stand display, and a scanner method allows to record what products are purchased but not which are considered. The advantage of the combined video + RFID approach according to Hui and his colleagues is in providing them “not only the shopping path but also the changes in the shoppers’ visual field as he or she walks around the store” (p. 449).

The complete research design included two interviews conducted with each shopper-participant — before the shopping trip, as a shopper enters the store, and after, on the way out. In the initial interview, shoppers were asked in which product categories they were planning to buy (aided by a list to choose from), as well as other shopping aspects (e.g., total budget, whether they brought their own shopping list). At the exit the shoppers were asked about personal characteristics, and the experimenters collected a copy of the receipt from the retailer’s transaction log. The information collected was essential for two aspects in particular: (a) distinguishing between planned and unplanned considerations; and (b) estimating the amount of money remaining for the shopper to make unplanned purchases out of the total budget (‘in-store slack’ metric).

237 participants were included in analyses. Overall, shoppers-participants planned to purchase from approximately 5.5 categories; they considered on average 13 categories in total, of which fewer than 5 were planned considerations (median 5.6). 37% of the participants carried a list prepared in advance.

Characteristics influencing unplanned consideration:  The researchers sought first to identify personal and product characteristics that significantly influence the probability of making an unplanned consideration in each given product category (a latent utility likelihood model was constructed). Consequently, they could infer which characteristics contribute to considering more categories in an unplanned manner. The model showed, for instance, that shoppers older in age and female shoppers are likely to engage in unplanned consideration in a greater number of product categories. Inversely, shoppers who are more familiar with a store (layout and location of products) and those carrying a shopping list tend to consider fewer product categories in an unplanned manner.

At a product level, a higher hedonic score for a product category is positively associated with greater incidence of unplanned consideration of it. Products that are promoted in the weekly flyer of the store at the time of a shopper’s visit are also more likely to receive an unplanned consideration from the shopper. Hui et al. further revealed effects of complementarity relations: products that were not planned beforehand for purchase (B) but are closer complementary of products in a ‘planned basket’ of shoppers (A) gain a greater likelihood of being considered in an unplanned manner (‘A –> B lift’).  [The researchers present a two-dimensional map detailing what products are more proximate and thus more likely to get paired together, not dependent yet on purchase of them].

Differences in behaviour between planned and unplanned considerations: Unplanned considerations tend to be made more haphazardly — while standing farther from display shelves and involving fewer product touches; conversely, planned considerations entail greater ‘depth’. Unplanned considerations tend to occur a little later in the shopping trip (the gap in timing is not very convincing). An unplanned consideration is less likely to entail reference to a shopping list — the list serves in “keeping the shopper on task”, being less prone to divert to unplanned consideration. Shoppers during an unplanned consideration are also less likely to refer to discount coupons or to in-store flyers/circulars. However, interestingly, some of the patterns found in this analysis change as an unplanned consideration turns into a purchase.

Importantly, in the outcome unplanned considerations are less likely to conclude with a purchase (63%) than planned considerations (83%). This raises the question, what can make an unplanned consideration result in purchase conversion?

Drivers of purchase conversion of unplanned considerations: Firstly, unplanned considerations that result in a purchase take longer (40 seconds on average) than those that do not (24 seconds). Secondly, shoppers get closer to the shelves and touch more product items before concluding with a purchase; the greater ‘depth’ of the process towards unplanned purchase is characterised by viewing fewer product displays (‘facings’) within the category — the shopper is concentrating on fewer alternatives yet examines those selected more carefully (e.g., by picking them up for a closer read). Another conspicuous finding is that shoppers are more likely to refer to a shopping list during an unplanned consideration that is going to result in a purchase — a plausible explanation is that the shopping list may help the shopper to seek whether an unplanned product complements a product on the list.

The researchers employed another (latent utility) model to investigate more systemically the drivers likely to lead unplanned considerations to result in a purchase. The model supported, for example, that purchase conversion is more likely in categories of  higher hedonic products. It corroborated the notions about ‘depth’ of consideration as a driver to purchase and the role of a shopping list in realising complementary unplanned products as supplements to the ‘planned basket’. It is also shown that interacting with a service staff for assistance increases the likelihood of concluding with a purchase.

  • Location in the store matters: An aisle is relatively a more likely place for an unplanned consideration to occur, and subsequently has a better chance when it happens to result in a purchase. The authors recommend assigning service staff to be present near aisles.

Complementarity relations were analysed once again, this time in the context of unplanned purchases. The analysis, as visualised in a new map, indicates that proximity between planned and unplanned categories enhances the likelihood of an unplanned purchase: if a shopper plans to purchase in category A, then the closer category B is to A, the more likely is the shopper to purchase in category B given it is considered. Hui et al. note that distances in the maps for considerations and for purchase conversion of unplanned considerations are not correlated, implying hence that the unplanned consideration and a purchase decision are two different dimensions in the decision process. This is a salient result because it distinguishes between engaging in consideration and the decision itself. The researchers caution, however, that in some cases the distinction between consideration and a choice decision may be false and inappropriate because they may happen rapidly in a single step.

  • The latent distances in the maps are also uncorrelated with physical distances between products in the supermarket (i.e., the complementarity relations are mental).

The research shows that while promotion (coupons or in-store flyers) for an unplanned product has a significant effect in increasing the probability of its consideration, it does not contribute to probability of its purchase. This evidence furthermore points to a separation between consideration and a decision. The authors suggest that a promotion may attract shoppers to consider a product, but they are mostly uninterested to buy and hence it has no further effect on their point-of-purchase behaviour. The researchers suggest that retailers can apply their model of complementarity to proactively invoke consideration by triggering a real-time promotion on a mobile shopping app for products associated with those on a digital list of the shopper “so a small coupon can nudge this consideration into a purchase”.

But there are some reservations to be made about the findings regarding promotions. An available promotion can increase the probability of a product to be considered in an unplanned manner, yet shoppers are less likely to look at their coupons or flyers at the relevant moment. Inversely, the existence of a promotion does not contribute to purchase conversion of an unplanned consideration but shoppers are more likely to refer to their coupons or flyers during unplanned considerations that result in a purchase.  A plausible explanation to resolve this apparent inconsistency is that reference to a promotional coupon or flyer is more concrete from a shopper viewpoint than the mere availability of a promotion; shoppers may not be aware of some of the promotions the researchers account for. In the article, the researchers do not address directly promotional information that appears on tags at the product display — such promotions may affect shoppers differently from flyers or distributed coupons (paper or digital via mobile app), because tags are more readily visible at the point-of-purchase.

One of the dynamic factors examined by Hui et al. is the ‘in-store slack’, the mental budget reserved for unplanned purchases. Reserving a larger slack increases the likelihood of unplanned considerations. Furthermore, at the moment of truth, the larger is the in-store slack that remains at the time of an unplanned consideration, the more likely is the shopper to take a product from the display to purchase. However, computations used in the analyses of dynamic changes in each shopper’s in-store slack appear to assume that shoppers estimate how much they already spent on planned products in various moments of the trip and are aware of their budget, an assumption not very realistic. The approach in the research is very clever, and yet consumers may not be so sophisticated: they may exceed their in-store slack, possibly because they are not very good in keeping their budget (e.g., exacerbated by use of credit cards) or in making arithmetic computations fluently.

Finally, shoppers could be subject to a dynamic trade-off between their self-control and the in-store slack. As the shopping trip progresses and the remaining in-store slack is expected to shrink, the shopper becomes less likely to allow an unplanned purchase, but he or she may become more likely to be tempted to consider and buy in an unplanned manner, because the strength of one’s self-control is depleted following active decision-making. In addition, a shopper who avoided making a purchase on the last occasion of unplanned consideration is more likely to purchase a product in the next unplanned occasion — this negative “momentum” effect means that following an initial effort at self-control, subsequent attempts are more likely to fail as a result of depletion of the strength of self-control.

The research of Hui, Huang, Suher and Inman offers multiple insights for retailers as well as manufacturers to take notice of, and much more material for thought and additional study and planning. The video tracking approach reveals patterns and drivers of shopper behaviour in unplanned considerations and how they relate to planned considerations.  The methodology is not without limitations; viewing and coding the video clips is notably time-consuming. Nevertheless, this research is bringing us a step forward towards better understanding and knowledge to act upon.

Ron Ventura, Ph.D. (Marketing)

Notes:

(1) Deconstructing the “First Moment of Truth”: Understanding Unplanned Consideration and Purchase Conversion Using In-Store Video Tracking; Sam K. Hui, Yanliu Huang, Jacob Suher, & J. Jeffrey Inman, 2013; Journal of Marketing Research, 50 (August), pp. 445-462.

(2) Innovations in Shopper Marketing: Current Insights and Future Research Issues; Venkatesh Shankar, J. Jeffrey Inman, Murali Mantrala, & Eileen Kelley, 2011; Journal of Retailing, 87S (1), pp. S29-S42.

(3) See other research on path data modelling and analysis in marketing and retailing by Hui with Peter Fader and Eric Bradlow (2009).

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One of the more difficult and troublesome decisions in brand management arises when entering a product category that is new to the company: Whether to up-start a new brand for the product or to endow it with the identity of an existing brand — that is, extending a company’s established brand from an original product category to a product category of a different type. The first question that would probably pop-up is “how different is the new product?”, acting as a prime criterion to judge whether the parent-brand fits the new product.

Notwithstanding, the choice is not completely ‘black or white’ since intermediate solutions are possible through the intricate hierarchy of brand (naming) architecture. But focusing on the two more distinct strategic branding options above helps to see more clearly the different risk and cost implications of launching a new product brand versus using the name of an existing brand from an original product category. Notably, the manufacturers, retailers and consumers, all perceive risks, albeit from the different perspective of each party given its role.

  • Note: Brand extensions represent the transfer of a brand from one type of product to a different type, to be distinguished from line extensions that pertain to the introduction of variants within the same product category (e.g., flavours, colours).

This is a puzzling marketing and branding problem also from an academic perspective. Multiple studies have attempted in different ways to identify the factors that best explain or account for successful brand extensions. While the stream of research on this topic helpfully points out to major factors, some more commonly agreed upon, a gap remains between the sorts of extensions predicted to succeed according to the studies and the extensions performed by companies that happen to succeed or fail in the markets in reality. A plausible reason for missing the outcomes of actual extensions, as argued by the researchers Milberg, Sinn, and Goodstein (2010), is neglecting the competitive settings in categories that are the target of brand extension (1).

Perhaps one of the most famous examples of a presumptuous brand extension has been the case of Virgin (UK), from music to cola (drink), airline, train transport, and mobile communication (ironically, the origin of the brand as Virgin Music has since been abolished). The success of Virgin’s distant extensions is commonly attributed to the personal character of Richard Branson, the entrepreneur behind the brand: his boldness, initiative, willingness to take risks, and adventurism. These traits seem to have transferred to his business activities and helped to make the extensions more credible and acceptable to consumers.

Another good example relates to Philips (originated in The Netherlands). Starting from lighting (bulbs, now more in LED), the brand extended over the years to personal care (e.g., face shavers for men, hair removal for women), sound and vision (e.g., televisions, DVD and Blue-Ray players, originally in radio sets), PC products, tablets and phones, and more. Still, when looking overall at the different products, systems and devices sharing the Philips brand, they can mostly be linked as members in a broad category of ‘electrics and electronics’, a primary competence of the company. As the company grew with time, launched more types of products whilst advancing with technology, and its Philips brand was perceived as having greater experience and good record in brand extensions, this could facilitate the market acceptance of further extensions to additional products.

  • In the early days of the 1930s to 1950s radio and TV sets relied for operation on vacuum tubes, later moving to electronic circuits with transistors or digital components. Hence, historically there was an apparent physical-technological connection between those products and the brand’s origin in light bulbs, a connection much harder to find now between category extensions, except for the broad category linkage suggested above.

Academic research has examined a range of ‘success factors’ of brand extensions, such as: perceived quality of the parent-brand; fit between the parent-brand and the extension category; degree of difficulty in making an extension (challenge undertaken); parent-brand conviction; parent-brand experience; marketing support; retailer acceptance; perceived risk (for consumers) in adopting the brand extension; consumer innovativeness; consumer knowledge of the parent-brand and category extension; the stage of entry into another category (i.e., as an early or a late entrant). The degree of fit of the parent-brand (and original product) with the extension category is revealed as the most prominent factor contributing to better acceptance and evaluation (e.g., favourability) of the extension in consumer studies.

Aaker and Keller specified in a pioneer article (1990) two requirements for fit: (a) the extension product category is a direct complement or a substitute of the original category; (b) the company, with its people and facilities, is perceived as having the knowledge and capability of manufacturing the product in the extension category. These requirements reflect a similarity between the original and extension product categories that is necessary for successful transfer of a favourable attitude towards the brand to the extension product type (2). A successful transfer of attitude may occur, however, also if the parent-brand has values, purpose or image that seem relevant to the extension product category, even when the technological linkage is less tight or apparent (as the case of Virgin suggests).

  • Aaker and Keller found that fit, based especially on competence, stands out as a contributing factor to higher consumer evaluation (level of difficulty is a secondary factor while perceived quality plays more of a ‘mediating’ role).

Volckner and Sattler (2006) worked to sort out the contributions of ten factors, as retrieved from academic literature, to the success of brand extensions; relations were refined with the aid of expert advice from brand managers and researchers (3). Contribution was assessed in their model in terms of (statistical) significance and relative importance. The researchers found  fit to be the most important factor driving (perceived) brand extension success in their study, followed by marketing support, parent-brand conviction, retail acceptance, and parent-brand experience. The complete model tested for more complex structural relationships represented through mediating and moderating (interacting) factors (e.g., the effect of marketing support on extension success ‘passes’ through fit and retailer acceptance).

For brand extensions to be accepted by consumers and garner a positive attitude, consumers should recognise a connectedness or linkage between the parent-brand and the category extension. The fit between them can be based on attributes of the original and extension types of product or a symbolic association. Keller and Lehmann (2006) conclude in this respect that “consumers need to see the proposed extension as making sense” (emphasis added). They identify product development, applied via brand (and line) extensions, as a primary driver of brand growth, and thereby adding to parent-brand equity. Parent-brands do not tend to be damaged by unsuccessful brand extensions, yet the authors point to circumstances where greater fit may result in a negative effect on the parent-brand, and inversely where joining a new brand name with the parent-brand (as its endorser) may protect the parent-brand from adverse outcomes of extension failure (4).

When assessing the chances of success of a brand extension, it is nevertheless important to consider what brands are already present in the extension category that a company is about to enter. Milberg, Sinn, and Goodstein claim that this factor has not received enough attention in research on brand extensions. In particular, one has to take into account the strength of the parent-brand relative to competing brands incumbent in the target category. As a starting point for entering the extension category, they chose to focus on how well consumers are familiar with the competitor brands vis-à-vis the extending brand.  Milberg and her colleagues proposed that a brand extension can succeed despite a worse fit with the category extension due to an advantage in brand familiarity, and vice versa. Consumer response to brand extensions was tested on two aspects: evaluation (attitude) and perceived risk (5).

First, it should be noted, the researchers confirm the positive effect of better fit on consumer evaluation of the brand extension when no competitors are considered. The better fitting extension is also perceived as significantly less risky than a worse fitting extension. However, Milberg et al. obtain supportive evidence that in a competitive setting, facing less familiar brands can improve the fortune of a worse fitting extension, compared with being introduced in a noncompetitive setting: When the incumbent brands are less familiar relative to the parent-brand, the evaluation of the brand extension is significantly higher (more favourable) and purchasing its product is perceived less risky than if no competition is referred to.

  • A reverse outcome is found in the case of better fit where the competitor brands are more highly familiar: A disadvantage in brand familiarity can dampen the brand extension evaluation and increase the sense of risk in purchasing from the extended brand, compared with a noncompetitive setting.

Two studies performed show how considering differences in brand familiarity can change the picture about the effect of brand extension fit from that often found without accounting for competing brands in the extension category.

When comparing different competitive settings, the research findings provide a more constrained support, but in the direction expected by Milberg and colleagues. The conditions tested entailed a trade-off between (a) a worse fitting brand extension competing with less familiar brands; and (b) a better fitting brand extension competing with more familiar brands. In regard to competitive settings:

The first study showed that the evaluation of a worse fitting extension competing with relatively unfamiliar brands is significantly more favourable than a better fitting extension facing more familiar brands. Furthermore, the product of a worse fitting brand extension is preferred more frequently over its competition than the better fitting extension product is (chosen by 72% vs. 6%, respectively). Also, purchasing a product from the worse fitting brand extension is perceived significantly less risky compared with the better fitting brand. These results indicate that the relative familiarity of the incumbent brands that an extension faces would be more detrimental to its odds of success than how well its fit is.

The second study aimed to generalise the findings to different parent-brands and product extensions. It challenged the brand extensions with somewhat more difficult conditions: it included categories that are all relevant to respondents (students), and so competitor brands in extension categories are also relatively more familiar to them than in the first study. The researchers acknowledge that the findings are less robust with respect to comparisons of the contrasting competitive settings. Evaluation and perceived risk related to the worse fitting brand competing with less familiar brands are equivalent to the better fitting brand extension facing more familiar brands. The gap in choice shares is reduced though in this case it is still statistically significant (45% vs. 15%, respectively). Facing less familiar brands may not improve the response of consumers to the worse fitting brand extension (i.e., not overcoming the effect of fit) but at least it is in a position as good as of the better fitting brand extension competing in a more demanding setting.

  • Perceived risk intervenes in a more complicated relationship as a mediator of the effect of fit on brand extension evaluation, and also in mediating the effect of relative familiarity in competitive settings. Mediation implies, for example, that a worse fitting extension evokes greater risk which is responsible for lowering the brand extension evaluation; consumers may seek more familiar brands to alleviate that risk.

A parent-brand can assume an advantage in an extension category even though it encounters brands that are familiar within that category, and may even be considered experts in the field: if the extending brand is leading within its original category and is better known beyond it, this can give it a leverage on the incumbents if those brands are more ‘local’ or specific to the extension category. For example, it would be easier for Nikon leading brand of cameras to extend to binoculars (better fit) where it meets brands like Bushnell and Tasco than extending to scanners (also better fit) where it has to face brands like HP and Epson. In the case of worse fitting extensions, it could be significant for Nikon whether it extends to CD players and competes with Sony and Pioneer or extends to laser pointers and faces Acme and Apollo — in the latter case it may enjoy the kind of leverage that can overcome a worse fit. (Product and brand examples are borrowed from Study 1). Further research may enquire if this would work better for novice consumers than experts. Milberg, Sinn and Goodstein recommend to consider additional characteristics that brands may differ on (e.g., attitude, image, country of origin), suggesting more potential bases of strength.

Entering a new product category for a company is often a difficult challenge, and choosing the more appropriate branding strategy for launching the product can be furthermore delicate and consequential. If the management chooses to make a brand extension, it should consider aspects of relative strength of its parent-brand, such as familiarity, against the incumbent brands of the category it plans to enter in addition to a variety of other characteristics of product types and its brand identity. However, the managers can take advantage as well of intermediate solutions in brand architecture to combine a new brand name with an endorsement of an established brand (e.g., higher-level brand for a product range). Choosing the better branding strategy may be helped by better understanding of the differences and relations (e.g., hierarchy) between product categories as perceived by consumers.

Ron Ventura, Ph.D. (Marketing)

Notes:

1. Consumer Reactions to Brand Extensions in a Competitive Context: Does Fit Still Matter?; Sandra J. Milberg, Francisca Sinn, & Ronald C. Goodstein, 2010; Journal of Consumer Research, 37 (October), pp. 543-553.

2.  Consumer Evaluations of Brand Extensions; David A. Aaker and Kevin L. Keller, 1990; Journal of Marketing, 54 (January), pp. 27-41.

3.  Drivers of Brand Extension Success; Franziska Volckner and Henrik Sattler, 2006; Journal of Marketing, 70 (April), pp. 18-34.

4. Brands and Branding: Research Finding and Future Priorities; Kevin L. Keller and Donald R. Lehmann, 2006; Marketing Science, 25 (6), pp. 740-759.

5. Ibid. 1.

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It is usually not a pleasant feeling to be alone in a scary place or event — think of being stuck in a dark elevator or being involved in a car accident. People commonly seek to be with someone for comfort and company. But the companion does not always have to be another person. A research by Dunn and Hoegg (2014) provides corroboration that the need to share fear matters to humans while the identity of the companion, whether a person or an object, is less critical.  More specifically, sharing fear with a product from an unfamiliar brand may facilitate a quick emotional attachment with that brand without requiring to build a relationship over a lengthy period of time (1).

Fear is evoked by the presence or anticipation of a danger or threat. Feeling fear may be triggered by an unfamiliar event to which one is unsure how to respond (uncertainty) or an unexpected event at a specific moment (surprise); experiencing fear is furthermore likely when the event encountered is both unfamiliar and unexpected. It is important to note, nonetheless, that not every encounter with an unfamiliar or unexpected event necessarily leads to  fear. The Amygdala in the temporal lobe of the brain is the “centre” where fear arises. However, the amygdala like other brain structures is responsible for multiple functions. The amygdala is activated in response to unfamiliarity, unpredictability or ambiguity, but not every instance necessarily means the evocation of fear. For example, tension from facing an unfamiliar problem that one is at loss how to solve may not result in fear. Additionally, fear as well as other states of emotion are the outcome of appraisal of physical feelings (e.g., faster heartbeats, startle, warmth), considering the conditions in which they were triggered; it is a cognitive interpretation of their meaning (“why do I feel that way?”). Activation of other brain structures together with the amygdala may influence whether similar feelings triggered by an unexpected event are interpreted, for instance, as fear, anger, or surprise. The context in which an event occurs can matter a lot for the appraisal of emotions (2).

Dunn and Hoegg emphasise the emotional charge of consumer attachment with a brand versus cognitive underpinnings. Brand attachment has often been conceptualised as the product of a relationship between consumers and the target brand built over time. It should take a longer time to achieve a more solid brand attachment because of cognitive processes for establishing brand connections in memory and stronger favourable brand attitudes. However, this explanation is subject to criticism of missing the important role of emotions in bonding between consumers and a brand which does not necessarily require a long time. By focusing their studies on unfamiliar brands, Dunn and Hoegg intended to show that emotional attachment can emerge much more quickly when the consumers are distressed and are looking for a partner to share their fear with, and that partner or companion can be a brand of a given product.

On the same grounds, the researchers chose a scale of emotional attachment (Thomson, MacInnis and Park, 2005 [3]) as more appropriate over a scale that combines emotional and cognitive aspects of attachment and gives greater weight to cognitive constructs (Park, MacInnis et al., 2010 [4]). The emotional scale comprises three dimensions: (a) Affection (affectionate, friendly, loved, peaceful); (b) Passion (passionate, delighted, captivated); (c) Connection (connected, bonded, attached). Nevertheless, in the later research Park and MacInnis with colleagues offer a broader perspective that accounts for two bases of brand attachment: (i) a connection between self-concept and a brand; and (ii) brand prominence in memory.

While ‘brand prominence’ can be regarded as more cognitive-oriented (accessibility of thoughts and feelings in memory), a ‘brand-self connection’ entails the expansion of one’s concept of self to incorporate others, such as brands, within it — and that involves an emotional element. Park and MacInnis et al. emphasise the brand-self connection as the emotional core of their definition of brand attachment, while brand prominence is a facilitator in actualizing the attachment (analyses substantiate that brand attachment is a better predictor than attitudes of intentions to perform more difficult types of behavior reflecting commitment, and the brand-self connection is more essential for driving this behaviour). The three-dimension scale of emotional brand attachment seems very relevant for the research goals of Dunn and Hoegg, even though it is more restricted from a stand-point of the theoretical roots of brand attachment.

The desire to affiliate with others in scaring and upsetting situations is recognised as a mechanism for coping with negative emotions in those situations. Episodes of armed conflict, terrorist attacks, and natural disasters make people get closer to each other, unite and show solidarity. However, the researchers note that the act of affiliation is essential for coping rather than the affiliation target. That is, the literature on affiliation or attachment relates to interpersonal connections as well as attachment to objects (although objects are viewed as substitutes in absence of other persons [pet animals should also be considered]). We can find support for possible attachment to products and their brands in the human tendency to animate or anthropomorphise objects by assigning them traits of living beings, whether animals or humans. Brands may be animated in order to help consumers relate with them more comfortably, making them appear more vivid to them. It is one of the processes that facilitates the development of consumers’ relationships with their brands in use; consumers connect with brands also through the role brands fulfilled in their personal history, heritage and family traditions, and how brands integrate in their preferred lifestyles (5).

Dunn and Hoegg investigate how consumers connect with a brand on occasions of incidental fear. They make a clear distinction between events that may trigger fear (or other emotions) and fear appeals strategically planned in advertising (e.g., in order to induce a particular desired behaviour). Events that incidentally cause fear would be independent and uncontrolled. Additionally, the intensity and range of emotions felt is expected to differ when consumers actively participate in an event and hence experience it directly in contrast to watching TV ads — in direct consumer experiences, emotional feelings are likely to be more intensive and specific.  In a model for measuring consumption emotions developed and tested by Richins, fear is characterised as a negative and more active (as opposed to receptive) emotion, next to other emotions such as anger, worry, discontent, sadness and shame (6).

  • In their experiments, the researchers try to emulate incidental fear by displaying to participants clips from cinema films or TV series’ episodes, and present evidence that manipulations successfully elicited the intended emotions as dominant in response to each video clip. Yet, it remains somewhat ambiguous how real and direct the experience of watching scenes in a film or a TV programme is perceived and felt with regard to the emotions evoked.

The following are more concrete findings from the studies and their insights:

Emotional brand attachment is generated through perception that the brand shares the fear with the consumer — Study 1 confirms that emotional attachment with an unfamiliar brand is generated when a product (juice) by that brand is present and can be consumed during the fear-inducing experience (more than for emotions of sadness, excitement and happiness). But moreover, it is shown that the emotional attachment is mediated (conditioned) by perception of the consumer that the brand shared the fear with him or her.

Humans precede product brands —  Sharing fear with a brand contributes to stronger emotional brand attachment, but only if they still have a desire generated by fear to affiliate with others. If conversely that desire is satiated by a perception of the consumers that they are already socially affiliated with other people, the effect on brand attachment is muted.

  • Note: Participants in Study 2 were asked to perform a search with words related to feelings of affiliation and social connectedness (e.g., included, accepted, involved) to prime affiliation. Given the statements used to measure (non-)affiliation (e.g., “I feel disconnected from the world around me”), it is a little questionable how effective such a priming condition could be (though the authors show it was sufficient). It might have been more tangible to ask participants to think of people dear to them, family and close friends, and write about them.

Balancing negative and positive emotional effects on attitudes — Based on analyses in Study 2 the researchers also suggest that increased positive effect of emotional brand attachment may counterbalance and override a negative influence of ‘affect transfer’ on attitudes due to fear.

Presence of the brand and attention to it are required yet sufficient — Study 3 demonstrates that neither consumption of the product (juice) nor even touching it (the bottle), both forms of physical interaction, are really needed for feeling affiliated and forming emotional attachment — forced consumption in particular does not contribute to stronger perceived sharing or emotional attachment than merely seeing the product when feeling fear, that is making an eye contact and visually attending to the product in search for a companion. (Unexpectedly, in the case of action and excitement, consuming the drink increases emotional attachment.) Study 4 stresses, nevertheless, that the brand must be present during the emotional event for generating increased emotional attachment — having the brand nearby while experiencing the fear is essential for consumers to feel connected with the brand as their sharing partner (tested with a different product, potato chips).

The research paper suffers from a deficit in practice. That is, marketing managers and professionals might be disappointed to discover that it could be most difficult to have any control of those situations of incidental fear and to act on them to their advantage. In order to have any influence on the consumer a company would be required to anticipate an individual event in advance and to find a way to intervene (i.e., make their product present) without being perceived too intrusive or self-interested — two non-negligible challenges. An additional restriction is posed by the relation of the ‘fear effect’ to brands not previously familiar to the consumers.

Let us consider some potential scenarios where brands might benefit and the difficulties that are likely to arise in implementing it:

Undertaking medical treatments or tests — Some treatments can be alarming and frightening on occasion to different patients. A sense of fear is likely to enter already, and perhaps especially, while waiting. It is a opportunity for introducing the brand-companion in the waiting hall; even more so given that patients are usually not allowed to or prevented from using artifacts during the treatment (mostly no food and drinks). First, a company may have a difficulty to obtain access to places where patients wait for treatment. Second, consumers-patients are likely to bring products with them from home to entertain them (of brands they know). Third, patients often arrive with a family or friend companion, thus satisfying their need for affiliation with another person which dominates affiliation with an object. Still, there is room for ingenuity how to locate the brand close enough to the treatment episode (e.g., shops offering books or toys, especially for children, in the premises of a clinic or hospital).

Trekking or hiking in nature — Some routes, particularly in mountainous areas, can be quite adventurous, not to say dangerous. If a brand could find a way to introduce its product just before the consumer starts the hiking trip, it may benefit from being with him or her if fear arises. One problem is that hikers are advised and even required not to embark alone on more dangerous routes. Another problem is that those trekking or hiking sites often offer local brands, that while not being familiar to the consumers they also are not likely to be available to them at home, and thus the opportunity to develop a relationship based on the early emotional attachment is lost.

Offering legal, financial, insurance, and technical services in events of crisis — In various occasions of accidents, malfunctions, and disasters, people need help to cope with the crisis and the negative emotions it may evoke, particularly fear. A service provider would be expected to counsel the customer in his or her distress, and of course propose a solution (e.g. how to fix one’s home after a fire or an earthquake). Unfortunately,  one cannot make an eye contact with an intangible service. The company has to find creative and practical ways to make itself readily visible and accessible to the consumer when needed by offering instruments and cues for making contact (e.g., an alarm and communication device for the elderly and people with more risky medical conditions).

  • Dunn and Hoegg are aware of the limitation of the findings to unfamiliar brands. They reasonably propose that “because fear leads to a general motivation to affiliate, emotional brand attachment would be enhanced regardless of the familiarity with the brand” (p. 165). It should take further research, however, to substantiate this proposition.

Despite the possible difficulties companies will likely need to deal with, the doors are not completely shut to them to benefit from this phenomenon. But they must come up with creative and non-intursive solutions to make their brands and products present in the right place at the right time. At the very least, marketers should be aware of the potential effect of sharing fear with the consumer and understand how it can work in the brand’s benefit. It is worth remembering, after all, the saying “a friend in need is a friend indeed” whereby in some incidents the friend can be a brand.

Ron Ventura, Ph.D. (Marketing)

Notes:

(1) “The Effect of Fear on Emotional Brand Attachment”; Lea Dunn and JoAndrea Hoegg, 2014; Journal of Consumer Research, 41 (June), pp. 152-168.

(2) “What Is Emotion?: History, Measures and Meanings”; Jerome Kagan, 2007; New Haven and London: Yale University Press. Also see: “The Experience of Emotion”; Lisa Feldman Barrett, Bejta Mesquita, Kevin N. Ochsner, & James J. Gross, 2007; Annual Review of Psychology, 58, pp. 373-403.

(3) “The Ties That Bind: Measuring the Strength of Consumers’ Emotional Attachments to Brands”; Mathew Thomson, Deborah J. MacInnis, & C. Whan Park, 2005; Journal of Consumer Psychology, 15 (1), pp. 77-91.

(4) “Brand Attachment and Brand Attitude Strength: Conceptual and Empirical Differentiation of Two Critical Brand Equity Drivers”; C. Whan Park, Deborah J. MacInnis, Joseph Priester, Andreas B. Eisengerich, & Dawn Iacobucci, 2010; Journal of Marketing, 74 (November), 1-17.

(5) “Consumers and Their Brands: Developing Relationship Theory in Consumer Research”; Susan Fournier, 1998; Journal of Consumer Research, 24 (March), pp. 343-373.

(6) “Measuring Emotions in the Consumption Experience”; Marsha L. Richins, 1997; Journal of Consumer Research, 24 (September), pp. 127-146.

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Department stores are competing hard for more than thirty years to overcome the challenges posed to them by shopping centres and malls. They keep refreshing their interior designs, merchandising and marketing methods to remain relevant, up-to-date, and especially reinvigorated for the younger generations of shoppers. Department stores and shopping centres are two different models in retailing for offering a wide array of product categories, and accompanying services, within enclosed built environments — different in requirements and responsibilities of managing them, in their structures, and most importantly with respect to the shopping experiences they create. There is enough room in consumers’ lives for shopping both ways.

Shopping centres may be found in the central areas of cities and on their outskirts, on main roads at city-gates and in suburban neighbourhoods. A shopping mall, according to the American genuine model, is a shopping centre characterised by location outside the city centre, housed in a single- or two-floor building spread over a large area and a large-space parking lot, free of charge. But shopping centres or malls exhibit nowadays such a variety of architectural structures and styles of interior design, at different sizes and locations, that the distinction in terms has become quite vague and less important.

Department stores belong traditionally in city centres. They also are typically housed inPartial back closed windows allows a glimpse into the Coop store their dedicated buildings (e.g., 5 to 7 floors, including one or two underground floors). Each floor in a contemporary store is hosting one or more departments (e.g., cosmetics, accessories, menswear, furniture, electric goods and electronics/digital) or amenities (e.g., restaurants). That was not the case in the early days (1850s-1920s) when the retail space open to the public included only up to three floors and the rest of the building was used for production, staff accommodation, and other administrative functions; the range of products was much smaller. So the department store as we better know it today follows the format redeveloped in the 1930s and further progressed soon after World War II. The styles of interior design and visual merchandising, nevertheless, have certainly changed several times over the years.

There is however another recent format of a department store which resides within a shopping centre. It is a reduced and condensed exemplar of the ‘classic’ department store, probably not how consumers more often perceive and think of such stores. But having a reduced store version is perhaps not a problem inasmuch as its location. Shopping centres invite retail chains of department stores to open a branch as an anchor store in their premises, and it seems as a necessary action by the retailers to maintain visibility and presence amid the threat of the shopping centres posed to them. This venture also allows the retailer to extend and reach shoppers away from city centres. Yet, one may question if it helps and serves the interests of the department store retailer as much as of the proprietor of the shopping centre. Being more limited in space and scope of products, while surrounded by a few hundred other shops and stores under the same roof, the department store could get more easily lost and vanish from shopper attention in the crowded space. It should be much more difficult for the store to remain conspicuous in this kind of environment, especially when shoppers can refer to a selection of specialist shops in any category they are interested almost next door.

When a shopper enters a respectable department store he or she tends to get absorbed within it. The variety of products on display, lights and colours, brand signs, and furnishing and fixtures in different shapes and styles pull you in, making you forget of the outer world. The shopper may find almost anything one needs and seeks, whether it is for wearing, decorating the living room, or working in the kitchen, enough to forget there is a street and other shops and stores out there. Think of stores — just for illustration — such as  KaDeWe in Berlin, Selfridges in London, La Rinascente in Milano, or Printemps in Paris: that is the magic of a department store. Of course there are many other stores of this type from different chains, in different styles and atmospherics (which may vary between departments within the same store), and in some of the main cities in each country. For instance, Marks & Spencer opened its modern flag store in a glass building at the turn of the century in Manchester, not in London. Not long afterwards Selfridges also opened a store in Manchester, and then in Birmingham. Printemps and Galeries Lafayette sit next to each other on Boulevard Hausmann in Paris — both are very elegant though the latter  looks more glittering and artistic,  appearing even more upscale and luxurious than the former. Now Galeries Lafayette is planning its yet most modern concept of a department store to open on Champs Élysées.

That is not the impression and feeling one gets in a shopping centre. Although a centre can be absorbing and entertaining in its own way, usually it would be the centre’s environment that is absorbing as a whole and much less any single shop or store. Even in larger stores the shopper is never too far from being exposed again to other retail outlets that can be quickly accessed. In the shopping centre or mall, a shopper moves around between shops and stores, reviews and compares their brand and product selections, and at any point in time he or she can easily return to “feel free” walking in the public pathways of the centre, eye-scanning other stores. It is a different manner and form of shopping experience for a consumer than visiting a department store.

The rise of branding and consumer brands since the 1980s has also had an important impact on trade, organisation and visual merchandising in department stores, as in other types of stores in general. There is a much stronger emphasis in the layout of floors on organisation by brand, particularly in fashion (clothing and accessories) departments. The course of the shopping trip is affected as a result. Shoppers are driven to search first by brand rather than by attribute of the product type they seek. That is, a shopper would search and examine a variety of articles (e.g., shirts, trousers, sweaters, jackets) displayed in a section dedicated to a particular brand before seeing similar articles from other brands. It can make the trip more tiresome if one is looking for a type of clothing by fabric, cut or fit, colour and visual pattern. But not everything on a floor is always sorted in brand sections, like a shop-in-shop; often a shopper may find concentrated displays of items like shirts or rain coats of different models from several brands. Furthermore, there is still continuity on a floor so that one can move around, take along articles from different brands to compare and fit together, and then pay for everything at the same cashier.

In some cases, especially for more renowned and luxury brands, the shop-in-shop arrangement is formal where a brand is given more autonomy to run its dedicated “shop” (known as a concession), making their own merchandising decisions and employing their own personnel for serving and selling to customers. The flexibility of shoppers may be somewhat more restricted when buying from brand concessions. However, even when some “brand shops” are more formal, much of the merchandising is already segregated into brand sections, and shoppers frequently cannot easily tell between formal and less formal business arrangements for brand displays. The sections assigned toView over terraces in a multi-storey department store specific brands are usually not physically fully enclosed and separated from other areas: some look more like “booths”, others are more widely open at the front facing a pathway. Significantly, shoppers can still feel they are walking in the same space of a department or floor, and then move smoothly to another type of department (e.g., from men or women fashion to home goods). That kind of continuity and flexibility while shopping is not affordable when wandering between individual shops and stores in a shopping centre or mall. The segregation of floor layout into dominant brand sections or “shops” within a department store (and some architectural elements) can blur the lines and make the department store seem more similar to a shopping centre, but not quite. The shopping experiences remain distinct in nature and flavour.

  • “With so many counters rented out to other retailers, it is as though the modern department store has returned to the format of the early nineteenth-century bazaar.” (English Shops and Shopping, Kathryn A. Morrison, 2003, Yale University Press/English Heritage.)

Department stores have gone through salient changes, even transformations, over the years. In as early as the 1930s stores started a transition to an open space layout, removing partitions between old-time rooms to allow for larger halls on each floor. Other changes were more pronounced after World War II and into the 1950s, such as  permitting self-service while reducing the need of shoppers to rely on sellers, and accordingly displaying merchandise more openly visible and accessible to the shoppers at arm’s reach. These developments have altered the dynamics of shopping and paved the way for creative advances in visual merchandising.

Department stores have also introduced more supporting services (e.g., repairs of various kinds, photo processing, orders & deliveries,  gift lists, cafeterias and restaurants). In the new millennium department stores joined the digital scene, added online shopping and expanded other services and interactions with consumers through the online and mobile channels. In more recent years we also witness a resurgence of emphasis on food, particularly high quality food or delicatessen. Department stores have opened food halls that include merchandise for sale (fresh and packaged) and bars where shoppers can eat from freshly made dishes of different types of food and cuisines (e.g., KaDeWe, La Rinascente, Jelmoli in Zürich).

Department stores in Israel have always been in a smaller scale than their counterparts  overseas, a modest version. But they suffered greatly with the emergence of shopping centres. The only chain that still exists today (“HaMashbir”) was originally established in 1947 by the largest labour union organisation in the country. Since the first American-style mall was opened near Tel-Aviv in 1985 the chain has started to decline; as more shopping centres opened their gates the stores became outdated and lost the interest of consumers. By the end of the 1990s the chain had come near collapse until it was salvaged in 2003 by a private businessman (Shavit) who took upon himself to rebuild and revive it.

The chain now has 39 branches across the country, but they are mostly far from the scale of those abroad and about a half are located in shopping centres. Yet in 2011 HaMashbir opened its first large multi-category store in the centre of Jerusalem, occupying 5000sqm in seven floors. It seems the stores have gone through a few rounds of remodelling until settling upon their current look and style. They are overall elegant but not fancy, less luxurious and brand-laden, intended to better accommodate consumers of the middle class and to attract families.

It is rather surprising that Tel-Aviv is still awaiting a full-scale department store. The chain has stores in two shopping centres in Tel-Aviv but none left on main streets. At least in two leading shopping centres the stores have shrunk over the years, and one of them is gone. The latter in particular, located once in a lucrative and most popular shopping mall in a northern suburb, was reduced from two floors to a single floor and gave up its fashion department amid the plentiful of competing fashion stores in the mall, until eventually it closed down. Another store remains near Tel-Aviv in “Ayalon Mall”, the first mall of Israel.

Tel-Aviv has the population size (400,000) and flow of visitors on weekdays (more than a million) to justify a world-class store on a main street. Such a store has also the potential of increasing the city’s attraction to tourists. The detriments for the retail chain are likely to be the high real estate prices, difficulty to find a building suitable for housing the store, and the competition from existing shopping centres as well as from stores in high-street shopping districts. Yet especially in a city like Tel-Aviv a properly designed and planned department store is most likely to be a shopping and leisure institution and centre of activity to many who live, work or tour the city.

Shopping centres and department stores can exist side by side because they are essentially different models and concepts of an enriched retail complex in enclosed environments. Unlike the shopping centre, the department store is a world in itself of retail and not an assortment of individual retail establishments. The department store engages shoppers through  its structure, design and function given the powers the retailer has to plan and manage the large store as an integrated retailing space. Consequently, a department store engenders customer experiences that are different from a shopping centre regarding the customers’ shopping trips or journeys and how they spend their time for leisure in the store. One just has to look at the flows of people who flock through the doors of department stores in major cities, most of all as weekends get nearer.

Ron Ventura, Ph.D. (Marketing)

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The decision of the British people in a referendum on 23 June (2016) to leave the European Union (EU) — known as ‘Brexit’ — promises to emerge as a most profound event in the nation’s recent history. The result of the referendum in favour of Brexit, by a majority of 52% against 48%, was decisive yet not by a large margin; moreover, the striking differences in voting patterns between England and Scotland, and even within England, between London and other parts of the country, invoke deep tensions (In Scotland and London the Remain camp had a clear majority).

The effects of Brexit are still very early to call and are hard to predict because a departure of a member country, let alone the United Kingdom, from the EU has never been experienced so far. The effects also are expected to impact multiple areas, including politics, economics, business, social welfare and standard-of-living. This article focuses on the area of retailing; it reviews and contemplates early assessments of the plausible effects that leaving the EU can have on retailers and consumers in Britain. However, due to the early stage of the process, the ambiguity that surrounds the implications of leaving the EU, and the fact that the new British government is not enacting yet an exit from the EU (i.e., Article 50 of the EU Lisbon Treaty), one should be cautious in taking these assessments as concrete predictions about the (probable) outcomes of Brexit.

Uncertainty mixed with pessimism has claimed an immediate toll on the value of the pound sterling (particularly its exchange rate against the US dollar); stock prices have also moderately declined in London Stock Exchange, but further declines are foreseen as the process unfolds. The devaluation of the British pound is a critical factor whose effect is expected to roll for several more years. Retailers are concerned that rising prices of imported goods (e.g., food, clothing) will deter consumers. In addition, increased cost of imported raw materials and components used in production is likely to contribute to rising prices of local goods, further exerting an inflationary pressure. Positive effects that may arise from this devaluation on exports will be discussed later. The sense of “bad news” is not escaping consumers either, manifested in a quick and rather sharp decline in consumer confidence as reported by GfK marketing research firm. This could mean that consumers become hesitant and more inclined to “wait and see”, thus postponing their more costly purchases, particularly of discretionary and leisure products and services.

The Centre for Retail Research (CRR) considers multiple aspects wherein retailers and consumers are likely to be affected while entering a post-Brexit era. It is suggested that a decline of 5% in the value of the pound against the euro would be enough to compensate for new tariff barriers imposed by the EU, and the steeper decline that already occurred is a very good thing — it would help exports (e.g., e-commerce), transitioning from imports to local production, and tourism. The CRR argues that the pound was already over-priced and needed correction (note that  right after the referendum the pound declined 8% against the dollar and euro, but a slide down occurred earlier, at the beginning of this year, so against values of late 2015 the pound declined by as much as 15%). But there are additional important factors with structural implications that are noteworthy: need to fulfill changing jobs and a drive for automation; need for new worker and consumer protection laws and regulations; re-settling (digital) data protection regulation and mechanisms.

There is broad agreement that in order for Britain to retain relations with the European Single Market, it will have to continue and abide to product and data protection standards of the EU. Britain will also not be able to completely restrict worker migration from the EU. The difference will be, however, that Britain will have to work by those rules but will not have a say about them — a warning the Remain campaigners continue to critically voice. Different models are contemplated for the relations of Britain with the EU in the post-Brexit era, notably by joining Norway in the European Economic Area (EEA) or replicating the special relations of Switzerland with the EU. But the EU council nervously hurried to warn Britain, or any other country that contemplates to follow, that it should not allude itself of receiving an advantageous status as of Switzerland’s.

  • Another avenue for resolution may consider the trade arrangements of Israel as a non-member country with the EU, and its participation in Horizon 2020, a programme for science and technology research and development.

References made in the media to changes in retail sales in June seem too soon and hardly indicative of a real effect of the Brexit decision, primarily given that only ten days remained to the end of the month after the referendum (some sources suggest waiting for July’s figures). Figures also vary, depending on the basis of comparison (e.g., volume or value, last month or same month last year, all or like-for-like [same stores]). For example, sales by volume decreased 0.9% in June compared with May (2016), yet compared with June of last year (2015) they increased 4.3% (by value, sales increased just 1.5% [Britain’s Office for National Statistics (ONS): Retail Industry-Sales Index]). Different figures were published by KPMG consulting firm together with the British Retail Consortium (BRC): Their Retail Sales Monitor shows that sales grew just 0.2% in June year-on-year, but when compared on a like-for-like basis they dropped 0.5%. The BRC-KPMG monitor furthermore indicates that non-food sectors, especially fashion, were hit harder than the food or grocery sector.

Recent observed changes may be attributed at most to so-called ‘Brexit-sentiment’ . If we were to look already for a more reliable indication of an immediate post-referendum shock, the KPMG’s press release reports that sales fell particularly in the last week of June. The Financial Times (13 July ’16) indicates that according to its Brexit Barometer, day-to-day spending “may have bounced back to just slightly below what it was immediately before the June 23 referendum”. The number of visits to stores (‘footfall’) declined in the week immediately after the referendum (10% year-on-year for weekdays – especially on High Street), recovered a little in early July, followed by another a drop in visits. The fluctuations are not consistent and it is hard to conclude a trend at this time. The picture for Saturdays is even less bright: “high-street footfall on Saturdays, the most important shopping day, has now fallen year-on-year for three consecutive weeks”.

The Economist Intelligence Unit published just before the referendum a special, rather negative, report on Brexit (“Out and Down: Mapping the Impact of Brexit”). It relates to key implications of Brexit in regard to retailing: a fall of the pound, inflation in line with rise of import prices, consumer purchasing hesitation, and more complex supply chains for retailers. According to their projection, the year 2017 will be the worst for retailing; recovery will be felt during 2018-2020 as growth of retail sales volume resumes, but it will happen intermittently and sales will not return to the pre-Brexit level.

In order to better grasp how Brexit may change the direction for British economy, and for the well-being of consumers and retailers in particular, it would help to take a little longer look backwards (i.e., as far as 2007) at retail sales and some additional  indicators.

The ONS Retail Sales Index by volume (seasonally adjusted, excluding fuel): After a long period, from 2006 (shortly before the financial crisis) until late 2013, when sales volume (index) was almost stagnant at just about 100, it started lifting since early 2014 and until June this year (2016) to a level of 112.5. It has been a positive sign for return to the expansion years of a previous decade (~1996-2006). But the implementation of Brexit (i.e., at least while negotiating new trade agreements) threatens to halt the climb and impede a continued recovery of the sector from the lingering effects of the financial and economic crisis of 2007-2008 (including a ‘second spell’ in 2011-2013).

Growth in pay compared with inflation (ONS: UK Perspectives 2016 Personal & Househod Finances [Section 4]): This is an indicator of the cost of living (or the purchasing power of income from work). We may notice three distinct periods: (a) A ‘shock’ response to the financial crisis ~2008-2009 included a steep rise in consumer prices while growth in regular pay dissipated, and then a ‘correction’ of slowing price increases; (b) Inflation rate higher than growth in pay ~2010-2013 — during this period of the hardest burden on consumers, growth in pay remained at a bottom level of 1-2% while inflation climbed as high as 5% (2011) and subsequently “cooled” to 2-3%; (c) Renewal of real rise in pay ~2014-2016 as inflation starts to subdue, falling to near 0%, and pay growth reaches 2-3%. Worsening market conditions due to Brexit could lead to erosion once again of  regular (weekly) pay and suppressed consumer spending.

Household spending (ONS: UK Perspectives 2016 as above [Section 5]): The average household expenditure, inflation-adjusted, decreased from 2006 through 2012 from ~£550 to about £510 per week; then spending started to recuperate in 2013 and 2014, reaching £530. Improvement may have continued up to this year: On the one hand, regular pay increased in real terms in the past two years; on the other hand, the real disposable household income in Britain has been hovering just above £17,000 since 2006 (after a climb in previous years), though lifting its head a little in 2015. Now there is higher risk that such improvement in spending will not be possible to continue.

Consumer Confidence Index (GfK): The research firm GfK conducted a one-off special survey in the week following the referendum to measure its Consumer Confidence Barometer (CCB) (normally updated on a monthly basis). It provides a sharp demonstration of the impact of ‘Brexit-sentiment’: The (net) index value dropped from -1 in the previous survey to -9 after learning of the referendum result. The last time a similar decline (8 points) in a single month was measured occurred in 2011, and only in 1994 had a larger single drop been measured. Those belonging in the Remain camp are more negative (-13) than those in the Leave camp (-5). Respondents to the barometer are asked about the current state of the economy and their expectations over the next twelve (12) months — 60% expect the economic situation to worsen (an increase of 14% from pre-referendum). Also, 33% expect prices to rise sharply.

The Financial Times presents in its Brexit follow-up a chart of the history of GfK’s Confidence Index from 2007 to 2016: The chart shows how CCB dropped from just below 0 to -40 during the 2007-2008 crisis, recovered to -20, declined again to around -30 during the ‘second-spell’ of the economic crisis in 2011-2013, and then climbed back to a little above 0 before the referendum. A decline of CCB actually already started earlier this year, and then came the steep single drop following the Brexit referendum. Consumer confidence was already at lower (net) levels and has experienced continuous descents in the past ten years; it may likewise continue to deteriorate below -20 again after the recent drop in CCB.

A map by GfK shows variation across regions and demographic segments. Interestingly, the strongest ‘demoralising’ effect was found among the young group of ages 18-29 (decline of 13 points) compared with older groups (6-8 points off), yet the younger remain overall more positive and optimistic about the economy (index +6), especially compared with those of 50-64 of age (index -21).

  • After three years of decline in the number of retail companies in the UK running into financial difficulties, since the last peak of 2012 (54), it seems to be rising again in the first half of 2016, according to data gathered and reviewed by the Centre for Retail Research (note that not all companies going into legal administration necessarily go bankrupt and cease to operate). Growing pressure on retailers during the process of leaving the EU may put even more medium and large retailers (in number and size of stores) at risk of failure.

After a significant drop last year, number of retailers in trouble looks to be rising again in 2016

The depriciation of the British pound is expected to facilitate selling and increase exports to foreign consumers in other countries through e-commerce (i.e., retailing or shopping websites) by retailers residing in the UK. Especially during the period that existing trade agreements are still valid, it would be the best time for British retailers operating online to fill their coffers with cash. They will need to refrain from updating pound-nominated prices upwards as long as possible. When new trade agreements are reached, the terms for purchasing abroad online from British retailers may also change and new adjustments will be required.

  • Ido Ariel of Econsultancy recommends three supporting marketing methods for encouraging international customers to purchase online at the interim period on UK retail websites: inducing a sense of urgency and initiating pro-active targeted prompting messages; offering targeted promotions to increase personalization (e.g., geo-targeting); and enacting limited-time discounts.

However, the condition in which the British Economy arrives to this historic junction is concerning, having reduced its manufacturing sector too much over the years and relying too heavily on a services economy. This situation may mitigate the country’s ability to exploit its currency advantage in the short- to medium-term by increasing exports of goods, and may also put it in a less advantageous position as a strong producing economy in negotiations for future trade deals. The condition of the British economy could become even weaker if, as projected by the Economist Intelligence Unit, service companies — financial and banking of most — will lose their “passport” to act from the UK in the other EU member-countries (e.g., France, Germany), and thus they will choose to cut their operations in the country or leave altogether.

  • The contribution of the production sector to the economic output (Generated Value Added [GVA]) decreased in the UK from 41% in 1948, through 25% in 1990, and down to 14% in 2013 (‘production’ includes manufacturing, oil and gas extraction, and water and energy utilities);
  • The relative contribution of the services sector grew during that period from 46% to 79% (67% in 1990);
  • The growth of the sub-sector of business and financial services is most noticeable, expanding from 13% in 1978, through 22% in 1990, and reaching 32% in 2013.
  • A World Bank comparison referring specifically to manufacturing shows that its contribution to output in Britain is 10% versus 22% in Germany (UK’s is the lowest [with France] and Germany’s the highest among all G7 countries, 2012).
  • (Source: ONS review, April 2014: “International Perspective on the UK — Gross Domestic Product”. For main points see The Guardian’s Economics blog.)

In the long-term Britain may well succeed in re-establishing a strong position in business and trade. But it will come at a high cost in the short- and medium-term (next three to five years) for the economy overall, businesses and consumers, and this process is not free of risks. Is it that much necessary? Another contentious question is: How much has the EU really held the UK back? Answers to these questions remain in deep dispute. Having stayed in the EU, the UK might have been able to help stabilise the European economy while resolving its existing failures, and then grow faster with the EU. But too many Britons stopped believing this will ever be possible, or simply lost their patience. The EU leadership in Brussels bears much responsibility for arriving to this predicament. But that matters little now.

It is now a time for taking an opportunity to resolve weaknesses in the British economy — industry and trade. It will have to prove itself as an independent viable economy, less reliant directly on the EU but more like many other countries trading with the EU. Retailers may have to make changes to their mixtures between imported and locally manufactured products; to form trading ties with different and additional countries; and more vigorously refresh and update their trading, merchandising and pricing techniques and tactics to be competitive on the local stage, and where relevant on an international stage. The Centre for Retail Research has expressed most pointedly what is expected of retailers: “Retail post-Brexit will have to be more agile, more digital, capital-intensive and more responsive to change”. Retailers and consumers will have to adjust to new market conditions and adapt to new game rules.

Ron Ventura, Ph.D. (Marketing)

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Consumers evoke from the visual appearance of a product their impressions of its beauty or aesthetics. They may also interpret physical features embedded in the product form (e.g., handles, switches, curvature) as cues for a proper use of the product. But there is an additional hidden layer of the design that may influence the judgement of consumers, that is the intention of the product designer(s). The intention could be an idea or a motive behind the design, as to what a designer wanted to achieve. However, intentions, only implicit in product appearance, may not be clear or easy to infer.

The intention of a designer may correspond to the artistic creativity of the product’s visual design (i.e., aesthetic appeal), its purpose and mode of use, and furthermore, extending symbolic meanings (e.g., social values, self-image of the target users). For a consumer, judgement could be a question of what one infers and understands from the product’s appearance, and how close one understands it to be the intention of the designer. For example, a consumer can make inferences from cues in the product form  (e.g., an espresso machine) about its appropriate function (e.g., how to insert a coffee capsule in order to make a drink) — but a consumer may ask herself, is that the way the designer intended the product to be used?  These inferences are interrelated and complementary in determining the ‘correct’ purpose, function or meaning of a product. There are original and innovative products for which the answers are more difficult to produce than for others based only on a product’s appearance.

  • Note: Colours and signs on the surface of a product may be informative in regard to function as well as symbolic associations of a product.

The researchers da Silva, Crilly and Hekkert (2015) investigated if and how consumers’ knowledge of the designers’ intentions can influence their appreciation of the respective products. Yet, in acknowledgement that consumers are likely to derive varied inferences on intention (some of them mistaken) from visual images of products, the researchers present verbal statements on intentions in addition to images. Moreover, their studies show that there is important significance to the contribution of the verbal statements, explicitly informing consumers-respondents of designers’ intentions, in influencing (improving) consumers’ appreciation of products (1).

To  begin with, consumers usually have different conceptions and understanding of design than professionals in the field. Thereby, most consumers are not familiar with terminology in the domain of design (e.g., typicality/novelty, complexity, unity, harmony) and may use their own vocabulary to describe attributes of appearance; if the same terms are used, they may not have the same meaning or interpretation among designers and common consumers (2). Nevertheless, consumers have innate tastes for design (e.g., based on principles of Gestalt), and with time they may develop better comprehension, appraisal skills, and refined preferences for design of artefacts (as well as buildings, paintings, photographs etc.). The preferences of individuals may progress as they develop greater design acumen and accumulate more experience in reacting to designed objects while preferences may also be affected by one’s personality traits. Design acumen, in particular, pertains to the aptitude or approach of people to visual design, which may be characterised by quicker sensory connections, greater sophistication of preferences, and stronger propensity for processing visual versus verbal information (3). The gaps prevailing between consumers and designers in domain knowledge and experience may cause diversions when making inferences directly about a product as well as when ‘reading’ the designer’s intention from the product’s appearance.

The starting point of da Silva, Crilly and Hekkert posits that “the designer’s intention can intuitively be regarded as the essence of a product and that knowledge of this intention can therefore affect how that product is appreciated” (p. 22). The ‘essence’ describes how a product is supposed to behave or perform as foreseen by the designer; thinking about it by consumers can give them pleasure as much as perceiving the product’s features.

Appreciation in Study 1 is measured as a composite of five scale items — liking, beauty, attractiveness, pleasingness, and niceness; it is a form of ‘valence judgement’ but with a strong “flavour” of aesthetics, a seeming remainder of its origin as a scale of aesthetic appreciation adapted by the researchers to represent general product appreciation.

  • Note: The degree to which the researchers succeeded in expanding the meaning of ‘appreciation’ may have some bearing on the findings where respondents make judgements beyond aesthetics (e.g., the scale lacks an item on ‘usefulness’).

At first it is established that knowledge of explicit intentions of designers, relating to 15 products in Study 1, influenced the appreciation of the designed products for good or bad (i.e., in absolute values) vis-à-vis the appreciation based on pictures alone. Subsequently, the researchers found support for overall increase in appreciation (i.e., positive effect) following the exposure to explicit statements of the designers’ intentions.

A deeper examination of the results revealed, however, that for three products there was a more substantial improvement; for ten products a moderate or minor increase was found due to intention knowledge; and two products suffered a decrement in appreciation. Furthermore, the less a product was appreciated based only on its image, the more it could gain in appreciation after consumers were informed of the designer’s intention. Products do not receive higher post-appreciation merely because they were appreciated better in the first place. More conspicuously, for products that were more difficult to interpret and judge based on their visual image, knowledge of the designer’s intention could help consumers-respondents realise and appreciate much better their purpose and why they were designed in that particular way, considering both their visual appeal and function (but there is a qualification to that, later explained).

The second study examined reasons for changes in appreciation following to being informed of designers’ intentions. Study 2 aimed to distinguish between appreciation that is due to appraisal of the intention per se and appreciation attributed to how well a product fulfills a designer’s intention, independent of whether a consumer approves or not of the intention itself. This study concentrated on three of the products used in Study 1, described briefly with their stated intentions (images included in the article):

  • A cross-cultural memory game (Product B) — The game “was designed with the aim of making the inhabitants of The Netherlands aware of their similarities instead of their differences” (i.e., comparing elements of Dutch and Middle Eastern cultures). [Product B gained the most in post-appreciation in Study 1.]
  • A partially transparent bag (Product C) — Things that are no longer in need, but are still in good condition, can be left in this bag on the street for anyone interested: “It was designed with the aim of enabling people to be generous towards strangers.” [Moderate gain.]
  • A “fitted-form” kitchen cupboard (Product G) — In this cupboard everyday products can be stored in fitted compartments according to their exact shapes. The designer’s intention said the product “was designed with the aim of helping people appreciate the comfortable predictability of daily household task”. [Product G gained the least in post-appreciation in Study 1.]

Consistent with Study 1, these three products were appreciated similarly and to a high degree based on images alone, and their appreciation increased to large, medium and small degrees after being informed of intentions. It is noted, however, that overall just half of respondents reported that knowing an intention changed how much they liked the respective product (about two-thirds for B, half for C, and a third for G). Subsequently respondents were probed about their reasons for changes in appreciation (liking) and specifically about their assessment of the product as means to achieve the stated intention. Three themes emerged as underlying the influence of intention knowledge on product appreciation: (a) perception of the product; (b) evaluation of the intention; and (c) evaluation of the product as a means to fulfill its intention (as explicitly queried).

Knowledge of the designer’s intention can change the way consumers perceive the product, its form and features. Firstly, it can make the product appear more interesting, such as by adding an element of surprise, an unexpected insight about its form (found especially for product B). In some cases it simply helps to comprehend the product’s form. The insight gained from knowing the designer’s intention may be expressed in revealing a new meaning of the product that improves appreciation (e.g., a more positive social ‘giving’ meaning of product C). But here is a snag — if the intention consumers are told of contradicts the meaning they assigned to the product when initially perceiving its image, it may inversely decrease one’s appreciation. For example, the ‘form-fitted’ cupboard (G) may seem nicely chaotic, but the way a consumer-participant interpreted it does not agree with the intention given by the designer (it ‘steals’ something from its attraction), and therefore the consumer becomes disappointed.

Upon being informed of the designer’s intention, a consumer may appreciate an idea or cause expressed in the intention itself (e.g., on merit of being morally virtuous, products B and C). The positive attitude towards the intention would then be transferred to the product (e.g., ‘helping people is a very beautiful thing’ in reference to C). On the downside, knowing an intention may push consumers away from a product (e.g., disliking the ‘predictability’ of one’s behaviour underlying product G). A product may thus gain or lose consumers’ favour in so far as the intention reflects on its essence.

But relying on a (declared) intention for the idea, cause or aim it conveys is not a sufficient criterion for driving appreciation upper or lower. Consumers also consider, as expected of them, whether the product is an able means to implement an idea or fulfill its aim. It is not just about what the designer intended to achieve but also how well a product was designed to achieve the designer’s goal. Participants in Study 2 were found to hold a product in favour for its capacity to fulfill its intended aim, even though they did not judge it as virtuous or worthy. There were also opposite cases where appreciation decreased but participants pointed out that the fault was not in the intention, rather in its implementation (e.g., “I think it’s a good idea [intention] but this [product C] won’t really work”). The authors suggest that participants use references in their judgements, including alternative known or imagined products which they believe to be more successful for fulfilling a similar aim or alternative aims or causes they could think of as appropriate for the same product.

The researchers find evidence in participants’ explanations suggesting they see how efficiency can be beautiful (e.g., how materials are used optimally and aesthetically). They relate this notion to a design principle of obtaining ‘maximum-effect-from-minimum-means’. Participants also endorsed novel or unusual means to realise the intention behind a product. Hekkert defined the principle above as one of the goals to pursue for a pleasing design.  It means conveying more information through fewer and simpler features, creating more meanings through a single construct, and applying metaphors. Hekkert also recommended a sensible balance between typicality and novelty (‘most advanced, yet acceptable’) that will inspire consumers but not intimidate them (4).

  • This research was carried out as part of the Project UMA: “Unified Model of Aesthetics” for designed artefacts at the Department of Industrial Design, Delft University of Technology, The Netherlands. (See how the model depicts a balance in meeting safety needs versus accomplishment needs for aesthetic pleasure: connectedness-autonomy, unity-variety, typicality-novelty).

Knowledge of the intentions of designers can elucidate for consumers why a product was designed to appear and to be used in a particular way. It contributes motivation or cause (e.g., social solidarity, energy-saving) for obtaining and using the designed product. But the intention should be reasonable and agreeable to consumers, and the product design in practice has to convince consumers it is fit and capable to fulfill the intention. It is nevertheless desirable that the product is visually pleasing, as an object of aesthetic appeal and as a communicator of functional and symbolic meanings.

When marketers assess that consumers are likely to have greater difficulty to interpret a product visual design and infer the intention behind it, they may wisely accompany a presentation of the product with a statement by the designer. This would apply, for instance, to innovative products, early products of their type, or original concepts for known products. The designer may introduce the design concept, his or her intention or aim, and perhaps how it was derived; this introduction may be delivered in text as well as video in assorted media as suitable (print, online, mobile). On the part of consumers, exposure to the designer’s viewpoint would  enrich their shopping and purchasing experience, helping them to develop better-tuned visual impressions and judgements of products.

Ron Ventura, Ph.D. (Marketing)

Notes:

(1) How People’s Appreciation of Products Is Affected by Their Knowledge of the Designers’ Intentions; Odette da Silva, Nathan Crilly, & Paul Hekkert, 2015; International Journal of Design, 9 (2), pp. 21-33.

(2) How Consumers Perceive Product Appearance: The Identification of Three Product Appearance Attributes; Janneke Blijlevens, Marielle E.H. Creusen, & Jan P.L. Schoorman, 2009; International Journal of Design, 3 (3), pp. 27-35.

(3) Seeking the Ideal Form: Product Design and Consumer Response; Peter H. Bloch, 1995; Journal of Marketing, 59 (3), pp. 16-29.

(4) Design Aesthetics: Principles of Pleasure in Design; Paul Hekkert, 2006; Psychology Science, 48 (2), pp. 157-172.

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