Unlocking Retail Success: The Psychology Behind Customer Loyalty and Engagement

Understanding the Feminine Soul

Sigmund Freud once said to Marie Bonaparte that “the greatest question that I have not yet been able to answer despite my thirty years of research into the feminine soul is ‘what does a woman want?’” He went to his grave never getting the answer.

The Psychology of Retail

You are in the retail business which really means you are in the business of understanding human psychology. Retailers use psychology constantly oftentimes we are not even aware of it. Take for example Walmart. The first thing you see when you walk in is $.50 sodas at the door. A customer decides if your store is right for them in the first ten seconds they walk in.

Emotional Investment

Obviously customers buy shoes from you but they really invest emotionally in your store. Anyone can buy what you sell but how do you know if they will come back and buy again? What is it exactly that keeps bringing them back? These are important questions in understanding why your customers buy from you and not your competitors.

An important factor that we must take into consideration is how our products services and everyday interactions make our customers feel. Emotion is a major driver of purchases and even more significant when it comes to loyalty. Share of heart can be more important than share of market.

The Power of Storytelling

Our parents told us stories when we were kids. Stories release a chemical called oxytocin in our brains. This chemical triggers emotions like empathy and positive thoughts. Don’t be afraid to tell your story. Be proud of your roots. Sell yourself. You select and you create. It is essential to leave every customer feeling that your store your products your staff are there especially for them. Consumers are much more inclined to purchase from brands and retailers with a story to tell.

The Reciprocity Principle

Have you ever gone to a Costco on a weekend and been offered a free sample? You probably felt somewhat of an obligation to buy the product assuming…

You liked it.

They gave you something for free so therefore you should give something back. That is the Principle of Reciprocity in action. I can speak from firsthand experience that this works and I have the Costco receipts as proof.

Notice how many solicitations for “worthy causes” are in the mail with actual currency inside.

I receive several each week that contain not only dimes and nickels but half dollars and in some cases actual dollars. The senders know that not only will I take the time to open the letter but I might engage with their message and send in a contribution.

You might find Stanford University’s Dr. Robert Cialdini’s book titled Six Principles of Persuasion interesting if you would like to learn more about this.

The cosmetic industry has used this marketing concept to their advantage for years.

Why you ask? Because it works! What if you were to offer a free pair of socks or a shoe care product as a promotion? Shoppers prefer getting something extra for free to getting something cheaper. Over time a retailer’s generosity makes them more likeable and leads to positive brand associations. You have to give to get.

Provide More Information

The more the better. Customers love product reviews. They want to know what others that have previously purchased the product think about it.

• Signage suggesting staff picks provide a great way to showcase products. This strategy works well from wine to work boots.
• Why does John like a particular boot? or why does Mary prefer a certain brand of athletic shoes?

Creative displays explain that a new style or brand has just arrived where an item came from who made it how the product will perform and how you are likely to feel once you have purchased.

Your Customers Crave an Emotional Connection

Ritchie Sayner
Ritchie Sayner

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Creative displays explain that a new style or brand has just arrived where an item came from who made it how the

Product Experience and Customer Feelings

The product will perform and how you are likely to feel once you have purchased.

Published in the January/February 2022 issue of Shoe Retailing Today Copyright © 2022 National Shoe Retailers Association Tucson AZ www.nsra.org. All rights reserved.

The Future of Our Industry

The future of our industry and independent retail can remain strong.

Sue Orischak’s Journey

Sue Orischak of Foot Solutions Scottsdale was introduced to shoe retailing when she and her husband had a vision of a store that could really create “solutions” with orthotics and shoes that people would love to wear. They discovered Foot Solutions was a franchise and while they were not looking for a business the business was looking for them!

After acquiring the location in Scottsdale Ariz. they rocketed up to become the number one store internationally in the franchise.

Sue attended Foot Solutions Certified Pedorthist training in Georgia and became a C.Ped. Like a sponge craving everything foot and footwear related she attends all the major footwear shows to see new trends and learn from the seasoned reps. She never misses a chance for a seminar and has a great time at every event.

Building a Knowledgeable Team

Sue has built a knowledgeable and competent staff of four full-time employees who help continue her pursuit of foot “magic.” She is a prolific public speaker maintains relationships with the medical community in her area and also belongs to PFA.

Excitement for NSRA Board

Sue is excited to be part of the NSRA board. “My shoe heroes are here! Anything I can do to help others especially the “newbies” I am in!”

Peace of Mind

Guarantees and easy returns are uppermost in consumers’ minds today. One needs to look no further than Zappos to see how loyal customers can be if a brand convinces them they cannot make a mistake due to their liberal return policies.

A recent Journal of Retail study found that a store’s return policy makes a big difference in a very surprising way. The longer a store allows a customer…

Manage Your Inventory

Having a store full of dated out-of-season inventory is NOT how you achieve a “share of heart” moment with your customers. In the shoe business this would equate to an average inventory that is over six months old. Actually since Covid hit we have seen vastly improved inventory turnover numbers in what previously had been slow-turning stores and classifications. Retailers learned a valuable lesson and that was that you don’t need to buy more than you can sell in a given period of time to actually sell more and have better margins and cash flow.

New trumps old all the time when it comes to inventory. I have often said that no one comes in your store to see what you got in last year. It is NEW merchandise that drives full price profitable sales. If your customers aren’t buying what you are offering get rid of it…NOW! The sooner the better.

Proper merchandise planning with accurately trended sales and inventory projections by store and classification is the single most effective way to manage retail inventory. A solid plan is based around retail profit metrics including margin and turnover. How much to buy when to bring it in and when and how much to mark it down should it become necessary are all hallmarks of a sound plan. If you have engaged the benefit of having an outside perspective to help you evaluate potential risks and opportunities well so much the better.

Welcome to 2022. Buckle up for the ride!

Paul Erickson of Management One contributed to this article. Ritchie Sayner is with Advanced Retail.

Strategies LLC an affiliate of Management One

Sayner’s book Retail Revelations: Strategies for Improving Sales Margins and Turnover (2nd Ed.) is available on Amazon. He can be reached at advanced-retailstrategies.com.

Board of Directors

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Sayner

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A recent Journal of Retail study found that a store’s return policy makes a big difference in a very surprising way. The longer a store allows a customer to return something the less likely they are to return it. In other words something far off in the future becomes more abstract.

Article Summary

The article explores the intricate relationship between retail strategy and consumer psychology emphasizing the importance of emotional investment and storytelling in fostering customer loyalty. It highlights the Principle of Reciprocity where offering something for free encourages purchases and underscores the significance of effective inventory management to maintain profitability. Additionally the narrative shares insights from industry professionals like Sue Orischak and stresses the value of return policies in enhancing customer satisfaction.

“Share of heart can be more important than share of market.”

Real-World Examples of Retail Psychology

The article highlights various psychological principles used in retail to enhance customer experience and drive sales. Here are some real-world examples demonstrating these concepts in action:

• Costco’s Free Samples: By offering free samples Costco taps into the Principle of Reciprocity. Customers often feel compelled to purchase after receiving something for free leading to increased sales.
• Zappos’ Return Policy: Zappos has built a loyal customer base by offering a liberal return policy. This provides peace of mind to customers reducing the perceived risk of purchase and fostering customer loyalty.
• Apple Store’s Storytelling: Apple effectively uses storytelling in its marketing and retail environments creating an emotional connection with customers. This strategy enhances brand loyalty and encourages repeat purchases.

Discover Proven Retail Strategies!

Explore expert insights and actionable advice in
Ritchie Sayner’s renowned book:
Retail Revelations – Strategies for Improving Sales Margins and Turnover 2nd Edition.

This must-read guide is perfect for retail professionals looking to
optimize their operations and boost profitability.

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