How To Boost Retail Sales, Increase Conversion & Enhance In-Store Experience – Part One
Have you ever heard the phrase ‘Threshold Resistance’.
Threshold resistance is a phrase coined by luxury retailing pioneer Alfred Taubman.
Mr. Taubman defined threshold resistance as “The physical and psychological barriers that stand between your shoppers and your merchandise…It’s the force that keeps your customer from opening your door and coming in over the threshold.”
Believe me, Alfred Taubman knows what he is talking about.
He is the guy behind many of the prestigious shopping malls mall in the United States.
He has been attracting customers to retail stores for over sixty years.
Customers Do Not Buy Price
Many retail store owners and senior executives who are struggling to boost sales and increase conversion do not know that there are lots of threshold resistance preventing them from achieving such objective.
The only threshold resistance prevention many retailers know is price reduction because they falsely believe that price is the key determining factor in shoppers buying decision.
In some instances, price is a threshold resistance.
However, only 20-30% of people buy purely on the basis of price.
70-80% of people buy for factors that has absolutely nothing to do with price.
If most consumers were buying on the basis of price, Richer Sound will not have the highest sales per square foot in the world neither will Apple have the highest sales per square foot in the United States.
The Richer Sound Phenomenon
The Richer Sound Phenomenon Richer Sounds do not sell the cheapest electronic products on the market.
In fact, Richer Sound is one of the most expensive electronic retailer in the world.
Most of the products being sold in Richer Sounds could be bought on the internet for a quarter of the price it is sold for in Richer Sounds.
So why do shoppers floor to Richer Sounds to cough out three times the price they could purchase similar products on the internet?
Answer: Richer Sound has broken shoppers threshold resistance.
Richer Sounds do not just sell home entertainment as other electronic dealers such as Sony does, they sell the experience of shopping from Richer Sounds.
Here is a leaf from Richer Sounds play book (by the way don’t tell them I gave it to you): “Our Philosophy The words
“Experience Better” sit under our logo. These are words everyone at Richer Sounds lives and breathes.
We want to provide you with better:
- Knowledge and expertise
- Products and pricing
- Customer service
We’re convinced this leads to better music and movie experiences for you, our shoppers.”
I rest my case.
Apple Free Prize
Apple Free Prize Apple has the highest sales per square foot in the US.
Remember Apple is not a dollar store.
Apple sells the most expensive gadgets.
Every functionality in an iPhone can be found in most smart phones.
Yet iPhones sell for four to five times the price of most smart phones.
Why are consumers willing to spend five times the amount they could spend for other smart phones on an iPhone?
When someone buys an iPhone, they do not buy a phone.
They buy membership into an exclusive club.
They pay for what author Seth Godin calls ‘Free Prize’.
They pay for Apple’s simplistic of elegant design, and easy to use functionalities.
They pay for the ‘free prize’ inside Apple phones.
Lessons from Apple and Richer Sounds
British supermarkets might want to take a leaf or two from Apple or Richer Sounds play books.
Those retailers are the most expensive in their categories.
Yet, they have the highest sales per square foot in the world in Richer Sounds’ case, in Apple’s case, the highest sales per square foot in the entire United States.
This is a vindication of my point that price is not a major threshold resistance for the majority of shoppers.
Therefore, instead of shooting themselves in the foot by competing for the crown of the cheapest retailer, retailers need to investigate the real threshold resistance preventing shoppers from buying from them.
However, removing threshold resistance will not only supermarkets and food retailers.
The majority of retailers fall into the trap of thinking that their shop’s only threshold resistance is price.
Price is a threshold resistance for shoppers you do not want to become your customers.
Send them to your competitors.
In part two of this article series, I will outline the key threshold resistance preventing sales in many retail stores.
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About the author
Romeo Richards is an experienced retail trainer and consultant with knowledge of retail marketing, store performance and retail loss prevention.
He has the ability to choreograph the customer journey, boost store conversion and enhance in-store experience using store design and visual merchandising.
Specialises in increasing retail profit through shrinkage reduction.
He is the author of 23 retail and marketing books including:
• How to Increase Retail Sales
• How to Make Profit In Retail
• Store Design Blueprint
• Visual Merchandising Display
He is the creator of five retail home study courses.
Frequently presents webinars on shoplifting prevention and boosting retail sales.
Featured in Professional Security Magazine, Retail Week & Retail Technology Magazine