Article
Customers are buying down, and opportunities are rising
Customer choices in a recession are looked at in part of a three-part series called "Where's the Opportunity?"
October 18, 2009 by Mike Wittenstein — Customer Experience and Service Designer, Storyminers
"How," you may be asking yourself, "could customers who are scrimping on everything from groceries to vacations possibly represent an opportunity for my store?"
The short answer is that in the current economic climate — which is neither a recession or meltdown, but a pattern we don't yet recognize — customers are choosing not to do without, like their grandparents did during the Depression, but to do with something different. Customers of Outback are giving Ryan's a try. Instead of staying at the Ritz Carlton, they're checking in to the W.
If you're a middle-market retailer, you may have lost some low-end customers to retailers with lower prices, but chances are you are also seeing some new customers who are moving down-market to you. If you can give these random, temporarily-buying-down customers a great experience, you will be able to convert them to fans who bring you more customers and continue shopping with you when the current trend reverses and many start buying up again.
If you're thinking "I don't have any extra resources to deploy on a new project," I understand. What I'm going to be talking about in this article and the two which follow is changing the way you relate to customers and the way you think about customers. There are simple changes you can make within a single store and without spending a dime that can make a life-changing impression on upscale customers who are checking you out for the first time.
Start by getting to know your store's new visitors. What do we know in general about customers who are buying down? They're people who have in the recent past been able to afford exactly what they wanted. They've sought vendors who provide personalized service. They've shopped without regard to price. They've entertained with only the thought of their guests' comfort in mind.
Once carefree, they're now anxious about the future — or at least they think they should be. A man wearing a business suit who drops by mid-day and scans your displays and signs for good deals probably has a professional job, but he almost certainly has at least one buddy who's lost his job in the past 15 months. A purchase he once made routinely — say dropping fifty bucks on a new belt — he now carefully considers.
A mother shopping with her status-conscious pre-teens wearing private school uniforms may be explaining to them that your store isn't better or worse — just different — from the store where they used to buy their sports shoes, but she's also a little disappointed that she can't afford to do things the way she used to. Not only does she miss the vendors she shopped with or the services and products her family especially enjoyed; she's also slightly embarrassed that she has to look at price tags. No one likes to have a freedom they previously enjoyed taken away.
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As you observe and engage new customers, try shifting the focus of your questions from service — "Can I help you?" to the customer's intent — "What's on your shopping list today?"
"Can I help you?" often gets a "No, thanks. I can find it myself."
"What's on your shopping list today?" invites the customer to disclose what's really important to him.
"I'm going to buy my wife a set of golf clubs" begins to give you a picture of the customer's life, and it encourages the customer to think of you as a vendor he might want to cultivate a relationship with. You can move from this point to finding out how the customer wants to be helped. Is he ready to buy? Is he shopping for product information? Comparing prices?
I invite you to try this in your store. Simply ask open-ended questions and listen to the answers for clues about who your customers are. You'll be collecting market research data that can inform your whole business and cultivating relationships with customers at the same time. That's a double win.
In Part two of this series, I'll focus specifically on how to empower store employees to be market researchers and brand ambassadors.
