If you are a retailer who would like to boost your store sales, increase conversion, reduce shrinkage and increase profit, this is the most important document you will ever read…
Executive Summary
‘Threshold Resistance’ is a phrase coined by luxury retail billionaire Alfred Taubman to mean: “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.”
Threshold resistance is basically an invisible barrier preventing sales from taking place in your store.
Threshold resistance is also those invisible profit draining activities preventing you from making profit.
The reason many retail brands struggle to break those threshold resistance is you focus on the wrong culprit.
The majority of retail brands think that price is the only threshold resistance they face.
This is the reason mant retail brands use price discount as their only strategy for attracting customers.
But price is not the only threshold resistance preventing shoppers from entering your store or buying when they are in your store.
In fact, price is the least of the factors that influence shoppers buying behaviour.
In this investigative report, I outline the threshold resistance that are preventing you from making sales.
This investigative report is aimed at helping you identify the core constraints preventing you from boosting sales and maximising profit.
Threshold Resistance Case Study
In the UK, there are four big supermarkets that have dominated the grocery market for decades.
The last few years, German dual Aldi and Lidl have been eating into the market share of those four supermarkets.
Caught off guard and panic stricken, the big four supermarkets responded to Aldi and Lidl’s encroachment on their territory with a declaration of price war.
This is because they are convinced that the only reason Aldi and Lidl are stealing their customers is they are cheaper than them.
Meanwhile, they have all reported their worst results in their organisations’ history.
In a bloody price war, there are no winners, only losers.
The question that may be running through your mind right now is, besides price, what else can the big four supermarkets possibly do to counter Aldi and Lidl assault on their market share.
The question I will prefer to answer here is, what can any retail brand do to boost sales, increase in-store conversion and enhance in-store experience.
The very first step in the process of boosting retail sales and maximising profit is identifying the threshold resistance preventing sales.
What stands between your shoppers and your merchandise?
What Are The Threshold Resistance to Increasing Retail Sales?
See if you recognise these threshold resistance in your store: (create design)
- Unattractive store design
- Inappropriate lighting system
- Inefficient use of store space
- Deep window display
- Unattractive window display
- Unattractive in-store display
- Untrained and unhelpful store assistants
- Unavailability of merchandise or empty shelf
- Bad refund policy
- Bad customer service
- High shrinkage level
Does any of the above sound familiar to you?
The retail environment has changed over the years.
The emergence of online shopping has completely revolutionised consumer buying behaviour.
The change in buying behaviour has also resulted in change in consumer wants and desires.
The reason shoppers visit retail stores these days is completely different from the reasons they did years ago.
Shoppers currently have the ability to buy literally everything they want from the comfort of their living.
Therefore, their motivation to visit brick and mortar retail store has diminished dramatically.
This is why the reasons for which they visit brick and mortar retail store has changed.
What Can Retail Brands Learn from Shopping Malls Owners
Shopping malls properties owners were the first to catch up and respond to the changing buying behaviour phenomenon.
It used to be that retail properties owners felt their only responsibility to their store tenants was to provide space.
When they noticed empty shop space in their mall, they realised it was in their best interest to ensure their tenants succeed.
Consequently, they began designing shopping malls as destination, attraction, entertainment venues and free car parks.
Most shopping malls now have food court, cinemas, restaurants and other amenities beside shop space.
The aim is to increase footfall because increased footfall automatically translates to increased shoppers in the malls.
Retail properties owners understand that breaking the threshold resistance that prevent shoppers from visiting shopping malls will increase the chances of their tenants landing customers.
How Can Retail Brands Break Their Threshold Resistance
Harrods of London is not only a department store, it is also a tourist destination.
I remember when my sister came from the United States to visit me, Harrods was on her list of places to visit.
Every time you visit Harrods, there seem to be more tourist than UK residents in the store.
Incidentally, Harrods has a permanent memorial to Princess Diana.
It is not an accident.
That memorial on its own is a magnet for tourist to visit Harrods.
Harrods is not the cheapest store in the UK, yet it manages to attract hundreds of shoppers each day.
In my retail books, I recounted the story of an experience I had in Harrods.
Harrods attracts royalties, A-list Hollywood stars and the ‘who-is-who’ from around the world.
So, when I was writing my books on retail sales and conversion, I thought there is no better place to get info about boosting retail sales and increasing conversion than the mecca of shopping.
Because of the types of clientele Harrods attracts, I was of the opinion that literally everything in Harrods was made of gold.
I even had to purchase a special outfit for the occasion to ensure I was in sync with the royalties and stars.
However, when I arrived in Harrods, instead of rubbing shoulders with Russian billionaires and Saudi Prince, what caught my attention was a toy bus.
I had bought similar bus in ASDA for my son.
It was the same bus, in the same packaging.
But it was sold in Harrods for almost three times the price it was sold for in ASDA.
An odd question popped into my mind.
How come the same bus, made in the same factory by the same people in China, been sold in Harrods for almost three times the price it was sold for in ASDA?
The answer is simple, ASDA sells toy bus, while Harrods sells the experience of buying the bus.
There is a difference.
Understanding that difference is the key to breaking the threshold resistance preventing sales in your store.
The Retail Price Myth
We have been taught that the price of a product is determined by the cost of bringing that product to the market.
It’s a lie.
The price of a product is not determined by the cost of bringing that product to the market, but by who is buying and how it’s been sold to them.
In ASDA, the bus is sat on the shelf.
When I wanted to buy it, I simply went to the shelf and collected it.
When I entered the children department in Harrods, there was a play consultant playing with the bus.
He invited my son to join him when we entered the department.
I noticed other play consultants playing with other kids.
What do you think happens after the kids have had the opportunity of sampling the toys?
You are right.
They want to go home with them.
They will pester their parents until they purchased for them.
Do you think if I had not bought the bus for my son, I would have told him, let’s wait and buy it from ASDA because it was three times cheaper?
Price would not have been a determining factor in that purchase because my son would have wanted the bus there and then.
Framework For Boosting Retail Sales
Breaking threshold resistance is about removing obstacles to purchase.
Having play consultant in Harrods remove the threshold resistance by making the buying process fun and entertaining.
The kids having the opportunity to sample the products in the store, increase their desire for it.
Contract Harrods children department to that of Early Learning Centre or Toys R Us.
Toys R Us sells children toys.
But their stores are as small as Soviet dental suite.
Children cannot even move in the store without bumping into each other talk less of having an area to sample toys.
There is also a sharp contrast between Richer Sounds and PC World sales process even though they both sell merchandise that require product knowledge.
Richer Sounds have sales assistants with expert product knowledge who help customers make buying decision.
In PC World, the sales assistants do not even know the location of products talk less of their functionalities.
Two retailers that sell almost similar merchandise but have different sales processes.
Richer Sounds and Harrods remove the threshold resistance by having play consultant and sales assistants with expert product knowledge.
Toys R Us and PC World stack the odds against them by having the wrong store design and untrained staff.
Boosting retail store sales is really easy.
All that is required is for you to break the threshold resistance preventing customers from entering your store or buying when they are in your store.
You need three things to break the threshold resistance: (create design)
- Beautiful store design
- Attractive visual merchandising display
- Effective loss prevention strategy
A beautiful store design and an attractive visual merchandising display does four things: (create design)
- Attract shoppers as they walk pass your store
- Retain them for long inside the store
- Persuade them to buy
- Trigger automatic repeat purchase
An effective loss prevention strategy in the first instant reduce shrinkage, which results in increased profitability.
However, the most importantly benefit of an effective loss prevention strategy is, it reduces unavailability, which in turn reduces missed opportunity, boost sales and increase conversion. (create design)
- But how do you design a beautiful store?
- How can you create an attractive visual merchandising display?
- How can you create an effective loss prevention strategy?
Those are the questions I answer in our ‘How to Increase Retail Sales’ home study course.
For information about the ‘How to Increase Retail Sales’ home study course, please visit: www.theprofitexperts.co.uk.
How To Design A Beautiful Store & Create Attractive Visual Display
Designing a beautiful store and creating an attractive requires answering the following questions:
- Who are we selling to?
- What are we selling to them?
- How are we going to sell it to them?
Who Are We Selling To?
When author Marcus Buckingham interviewed Sir Terry Leahy, the guy who transformed Tesco, he asked him about strategies he used to transform Tesco into a global brand.
Instead of revealing a whiz-bang strategy, Sir Terry said when he assumed leadership of Tesco, the first question he asked was ‘Who do we serve?’
When the answer came that Tesco serve the ‘Ordinary Joe’ who will like to sneak into Tesco to grab his lunch, he redesigned Tesco stores to appeal to the likes of the ‘Ordinary Joe’.
The majority of retail brands open their stores, stock it with merchandise and hope that customers will show up to buy what they already have in stock.
It needs to be the other way round.
You first need to ask the question: who do I want to sell to as Sir Terry did, design your store, stock it and create a display that directly appeals to that individual.
When Sir Terry determined Tesco’s customers, he redesigned Tesco stores to appeal to that individual.
He increased the numbers of checkout counters in the stores.
When asked why he choose checkout counters as a way of demonstrating understanding of Tesco’s target audience, he responded ‘what better way to show respect for someone than to show respect for his time?’
The last thing a person wants is to be stuck in a supermarket queue for his entire lunch break.
Sir Terry understood that, so he implemented strategies that demonstrated to Tesco customers he understood what they wanted.
The customers responded by flocking to Tesco.
At the time he was CEO of Tesco, for every £12 spent in the UK, £1.00 went to Tesco.
Effective Market Research Strategies
When most retail brands want to research their market, they hire research agencies to ask prefab questions that do not allow respondents the opportunity to express what they actually want.
Good consumer research takes two forms:
The Apple or the Procter and Gamble approach.
Apple research method:
Apple never conduct consumer research.
At least it never makes its product decision based upon consumer survey.
Apples’ decision about its products creation is based upon analysis of consumer past and present behaviour that helps it to anticipate their future buying decisions.
Apple designers study consumer trends for clue of the types of things consumers will do in the future and the tools that will be needed to do those things.
Then its designers go to work designing the tools (i.e., gadgets) it feels consumers will need to make their life easier.
The method requires deep understanding of your target market.
According to Steve Jobs, consumers have difficulties clearly articulating what they really want.
Therefore, it’s the job of Apple designers to create what consumers are thinking even if they cannot clearly articulate it.
Procter and Gamble research method
Procter and Gamble uses ergonomics commonly known as human factors research method to poll its customers.
Human factors and ergonomics (HF&E), also known as comfort design, functional design, or user-friendly systems, is the practice of designing products, systems, or processes to take proper account of the interaction between products and the people who use them.
When Procter and Gamble wants to create a new baby product, it does not simply poll mothers on the types of baby product they desire.
They send their reps to the houses of mothers, to see the things mothers use for their babies, find out how they use them and how it makes their lives easier.
Understanding the impact your merchandise make on the lives of your customers is critical for creating the type of store design and visual merchandising display that appeals to them.
The final thing I will like to say about research is to ensure the data are accurately interpreted.
As human, we are naturally wired to avoid pain.
Therefore, in certain instances, retail brands interpret research data to suit their preconceived bias.
That is wrong.
It’s a recipe for bankruptcy.
To break your customer buying threshold resistance, you need to give them what they want.
This means if your research result prove that you had the wrong assumptions, change your strategies to reflect your research findings.
Whether you choose to use the Apple or the Procter and Gamble research method, it is essence that you understand that the key to breaking your customers threshold resistance is to first understand who you are trying to sell to.
What Are We Going To Sell Them
Have you ever wondered the reason Apple stores are constantly busy even in an empty shopping mall?
Apple stores are constantly busy because Apple train its staff using the process incidentally called APPLE.
A: approach customer in a friendly, personalised and committed to service manner.
P: probe politely to understand the customer needs.
P: present solution for the customer to take home today.
L: listen for and resolve customer unexpressed wishes and concerns.
E: end with a fond farewell and an invitation to return.
This is the customer service experience customer get when they visit Apple stores.
Apple adapt this approach because they understand that shoppers who visit their store do so to buy experience.
Richer Sounds provide their staff with expert product knowledge in order for them to decrease customers anxiety associated with buying home entertainment.
Consumer visit brick and mortar retail stores for completely different reason these days than they use to do few years ago.
Everything you sell in your store can be bought online.
However, online purchase does not provide similar experience to interacting with another human being.
Providing pleasant customer experience in your store is the single effective way of breaking customer buying threshold resistance.
How Are We Going To Sell To Them?
Tesla Motors is a manufacturer of luxury electric cars.
What stand Tesla Motors apart from other auto manufacturers is, it does not have car showrooms and salesmen like you find at other auto manufacturers showrooms.
Tesla Motors showrooms are located in shopping malls, High Streets and areas with high footfall.
Unlike other car showrooms, there are no large inventory of cars in Tesla showrooms.
As a matter of fact, customer cannot even buy a Tesla car on the spot even if they wanted to.
They have to pay for the privilege of placing their names on Tesla’s long waiting list.
Tesla showrooms are simply for information purposes.
Their sales people are not your usual commission sales people pressuring shoppers to make instant purchase.
They simply provide information on the benefits of electric cars and allow the individual to make up their own mind.
Tesla vehicles are not particularly cheap.
One of their cars could set you back £70,000.
Yet, there are long waiting list of people queuing to buy them.
So, why is it that despite its price tag, people are queuing to purchase a Tesla?
For a start, it helps that Tesla cars are aesthetics beautiful.
Secondly, they are literally free to run.
All the owner needs to do is get to any of Tesla’s free charging points and they can charge their vehicle for free.
There is no need for oil change or servicing, neither is there a need to visit mechanic.
Most issues can be resolved remotely, without the need for the owner taking time to visit a garage.
However, Tesla brilliance is in its distribution strategies.
Since it does not have the advertising budget of major auto manufacturers, it selects strategic locations to place it showrooms and guilt customers into buying.
Tesla’s main sales pitch is it cars has zero carbon omission.
Translation, it is saving the planet.
Therefore, if you are someone with a conscience who care about the future of our planet, buy Tesla.
Many of its customers are wealthy people who desire to leave a better planet for their children.
The reason Tesla craft an emotional sales message is, it understands that people buy emotionally but justify their decision rationally.
In order to ensure it message reach the maximum amount of people, Tesla locate its showrooms in areas with high footfall.
And instead of staffing it showrooms with aggressive sales people who will pressurise prospective customers, they staff their showrooms with people possessing expert product knowledge that enables them to persuade prospects without pressurising them.
This is a classic example of the idea that the price of a product being determined by who is buying and how it is sold to them.
In the story I told about Harrods, Harrods was able to sell the same bus for almost three times the price it was sold for in ASDA because of the manner in which it was sold.
Imagine what will happen to Victoria Secrets’ sales if when a lady entered their stores, instead of asking the usual ‘can I help you’ question, the staff asked her the reason she needed the lingerie and proceeded to tell her the best lingerie that was suitable for her.
Victoria Secret sales would skyrocket.
Having an effective sales process is another way of breaking down buying threshold resistance.
How you sell your merchandise is as important as the quality of the merchandise.
How To Create An Effective Loss Prevention Strategy
For the majority of retail brands, shrinkage is shorthand for shoplifting.
This is the reason the retail industry approach to loss prevention is based upon the premise of arresting shoplifters or dishonest employees.
But loss prevention is not simply about theft.
An effective loss prevention strategy needs to be first and foremost about the availability of merchandise on the shop floor.
The goal of a good loss prevention strategy needs to be about limiting unavailability of merchandise, which will reduce missed opportunity, boost sales and increase profitability.
An effective loss prevention strategy requires the creation of a culture of loss prevention.
A culture in which every single person in the organisation is able and willing to participate in loss prevention.
It requires an efficient replenishment process that ensure products are replenished the moment they are sold or disappears from the shop floor.
It requires an effective process for tracking the movement of merchandise from the warehouse to the shop floor.
It requires an efficient receiving and warehousing system.
Finally, it requires an efficient supply chain system that tracks products from source to point of sales.
Increasing sales without reducing profiting draining activities is false economy.
In the final analysis, business is about making profit.
No retail organisation can be profitable if strategies for increasing sales does not simultaneously include effective loss prevention strategy.
Summary
Threshold resistance is those invisible barriers standing between shoppers and your merchandise.
Boosting sales, increasing conversion and enhancing in-store experience requires that you break those threshold resistance.
Your threshold resistance could be:
- Unattractive store design
- Inappropriate lighting system
- Inefficient use of store space
- Deep window display
- Unattractive window display
- Unattractive in-store display
- Untrained and unhelpful store assistants
- Unavailability of merchandise or empty shelf
- Bad refund policy
- Bad customer service
- High shrinkage level
Simply rectifying one of those could skyrocket your store sales.
Breaking your stores threshold resistance requires:
- Beautiful store design
- Attractive visual merchandising display
- Effective loss prevention strategies
Designing a beautiful store and creating an attractive visual merchandising display require you answer the questions:
- Who are we selling to?
- What are we selling to them?
- How are we going to sell to them?
You can boost your store sales and increase your profit today by simply going through the list of threshold resistance and breaking them one by one.
However, increasing sales without stemming profit draining activities is false economy.
Any strategy for increasing retail sales needs to include an effective loss prevention strategy.
The ‘How to Increase Retail Sales’ home study course provides you a step by step strategy for achieving the above.
Please visit: www.theprofitexperts.co.uk for more info.
About the author
Romeo Richards
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. He is capable of increasing retail profit through shrinkage reduction.
He is the authored of 23 retail and marketing books including:
- How to Increase Retail Sales
- How to Make Profit In Retail
- Store Design Blueprint
- Visual Merchandising Display
Created five retail home study courses
Frequently presents webinars and workshops.
Featured in Professional Security Magazine, Retail Week & Retail Technology Magazine
Romeo is also a Cyber Security Expert, certified by CompTIA, EC-Council, Microsoft & CISCO.
