Suppose you had just taken on a marketing consultant, a respected
heavyweight with a good track record. After many meetings and much
cogitation, his recommendations to you are: ’Promote your competitor’s
brand to sell more of your own. Then reduce the number of brands on
offer to increase consumers’ perceptions of choice. Finally, limit the
number of in-store promotions to increase overall sales.’
In the face of such Alice In Wonderland ideas, you might well be tempted
to recommend that your highly-paid consultant urgently visits a
psychologist and comes back only when he or she is better.
Except that the person who made these outlandish suggestions is more
likely than not to be a psychologist themselves, and their paradoxical
proposals are, in fact, cutting-edge, state-of-the-art marketing
It is an approach based on understanding the survival techniques that
prehistoric humans developed to protect themselves against threat from
predators and to improve their hunting skills. According to the
psychologists, these are exactly the same mental processes that modern
man uses while shopping.
The new techniques - which could best be described as ’micromarketing’ -
could completely revolutionise the profession, profoundly affecting the
role of brands, how we build them and the balance between mass marketing
and point-of-sale communications.
As anyone knows who has watched Channel 4’s four-part series on
supermarket culture Shop Till You Drop, which ends this week,
psychologists are devilishly clever people. The series perpetuates the
belief that once you enter a supermarket, they use their unfair insights
to control your behaviour and make you buy things you otherwise would
not have bought.
However, the surprise is not how powerful these hidden persuaders are,
but how limited in their ability to affect our actions. ’There is this
public fear of Big Brother, that our actions are being controlled. In
fact, psychologists are relatively powerless,’ says Hugh Phillips of De
Montfort University Business School.
’They can affect behaviour only at the margin and only in the direction
that it was going to occur. Fears that people will be manipulated into
buying things they don’t want just don’t stand up. We are too
sophisticated,’ he says.
So much for one misconception. But another widespread public
misapprehension is that the supermarkets have been using psychology for
decades. It is amazing when you consider that the British retail
industry is worth hundreds of billions of pounds a year, but in reality
the ability to use psychological methods to affect people’s behaviour
in-store is only a couple of years old.
Of course, retailers have been trying to do it for years. During the 50s
there were all sorts of black-box devices that purported to explain
almost everything about consumer behaviour. But crude technology and
insufficient understanding of how the brain worked meant that these
devices were near-useless and fell into disrepute.
They gave way, during the 60s and 70s, to a more craft-based
’Salesmen would come into stores and find out what worked in terms of
display and location through trial and error,’ says Phillips. But that
learning was never formalised and was lost when sales started to be
conducted at key account level.
Then, during the 80s design revolution, store layout and merchandising
became a design decision. ’When I became interested in this area just
three years ago, I assumed that it was well documented and
scientifically researched,’ says John Cox, of De Montfort University, a
world expert on psychology in retailing.
’But when I went into one of the major multiples and asked a senior
manager his reasons for placing the meat counter in a certain place he
replied: ’Simple. That’s where the architect located the power
Of course, designs would be checked out with consumers, but, say
Phillips and Cox, the results of such research would only have limited
’People lie in research groups,’ says Cox. ’They make mistakes. Often
the research is done long after a shopping trip, so with the best will
in the world they will forget details. And they may not actually know
why they did or felt something.’
In any case, until very recently there was little need for the big
retailers to be too rigorous about the key issues confronted by the new
psychological approach: store layout, category merchandising and package
design. ’Until the late 80s, they could rely on growth in the market to
carry them through,’ says Cox.
Then the recession struck, growth stopped and competition between the
retailers became much more fierce. Consumers who used to know exactly
what they were going to buy suddenly became more price conscious. ’As a
consequence, people became much more promiscuous in their brand
choices,’ observes Cox.
Acting on impulse
The result is that nowadays consumers tend to defer their purchase
decisions until they are in the store. Research suggests that impulse
purchases, or more accurately unplanned purchases, now account for
between 50% and 80% of all FMCG sales, depending on the category.
’The clear implication is that the point of purchase is now playing an
important role in buying decisions,’ says Phillips.
It could even have become the most important aspect of the marketing
mix. ’You can have the most wonderful brand construct and spend millions
on persuading consumers to buy it, but it can all be wasted if you don’t
get it right at the coal-face,’ says Cox.
This fact is not wasted on the point-of-purchase industry, which is
starting to look more seriously at what makes consumers tick. Richard
Ash, director of Oakley Young, says: ’We are having to think much more
strategically as POP becomes a more important part of the marketing mix.
We’re dealing with senior marketers, who are all trying to understand
the consumer, so we have to be able to speak the same language.’
POP to the shops
Oakley Young has been working with Research International to test
consumer reaction to POP in-store and hopes to use a model to predict by
how much POP increases sales.
The new retail psychology takes a far more hard-nosed approach than
anything that has gone before. ’It just applies straightforward
principles of cognitive psychology to the shopper,’ says Phillips. So
there is no neo-Freudian interpretation of symbols or psycho-babble
about ’healing the inner child’.
It is pure, almost brutal, behaviourism.
’The issue is that a supermarket can easily contain 20,000 brands and
they contain literally millions of visual stimuli, which are simply
If more than half of all purchases are still up for grabs when the
consumer enters the store, how can you help them to make sense of all
The new approach uses cameras in-store to track people’s movements and
eye-mark recorders which show how people use visual cues to negotiate
complex displays, coupled with instant questionnaires to find out what
people were thinking seconds before. The techniques may sound banal but
the results certainly are not.
ID Magasin is a retail consultancy pioneering the use of video-based
research and psychological techniques for store design. Its research has
highlighted many shortcomings in conventional store layout.
’The grid layout is one of the worst ways that could be conceived to
move humans around,’ says managing director Siemon Scamell-Katz. ’On
average, consumers pass only 30% of the stock. Some areas are only
visited by less than 1% of customers. Queues from the checkouts block
aisles, causing people to U-dip into aisles.’
Scamell-Katz suggests that a more useful layout would be a hub and spoke
system, with fresh goods as the hub and the spokes consisting of themed
areas: children’s goods, foreign foods and so on.
The new approach shows that people spend on average one minute in an
aisle. Therefore, in an aisle with six categories and 40 brands in a
category, each brand will receive on average 0.4 seconds consideration.
’Whole sectors are not even noticed because of poor sight lines, or
because consumers are devoting their attention to negotiating crowds
rather than the shelves.’
Phillips claims that the insights from such work can have a startling
effect on sales. ’Simple re-merchandising of displays and reorganisation
of store layouts can make shops more shoppable, raising sales by an
average of 18% to 25% and increasing shopper satisfaction.’
When it comes to category merchandising, the effects can be even more
marked. For example, products have been traditionally displayed
horizontally, but vertical blocking excites the shopper’s peripheral
vision and attracts much more attention. ’We are sensitive to them
because in the past they would have warned us that something big was
about to leap out on us,’ explains Phillips.
The new techniques have also revealed that consumers negotiate fixtures
by using signpost brands - usually the brand leader. So the whole
category can be boosted by giving these signpost brands greater
prominence. ’If so, it might make sense, if you are not a signpost
brand, to promote those brands instead of your own,’ suggests
Less is more
Similarly, consumers often cannot see the wood for the trees. ’How often
have you asked an assistant where a brand is, only to be told you are
looking at it?’ asks Phillips.
’If there is too much choice you become confused and your mind closes
down. If you reduce the number of brands on offer, very often consumers
feel that their choice is wider,’ says Scamell-Katz.
Clearly, not only retailers but brand owners have much to gain from
these techniques, and collaboration between them is the way forward.
’Retailers understand the environment better, but often manufacturers
have a superior understanding of their category and consumer,’ says
The rewards from employing such an approach can be spectacular. A recent
category re-merchandising collaboration between Procter & Gamble and
retailer Walmart in the US is said to have reaped dividends of increased
sales and profits of 126%. Phillips claims to have used similar methods
to boost sales at a DIY-store paint brush display by 400%.
Similarly, packaging can be made more effective by understanding
precisely what are the key triggers in your pack design. Again, this can
only be done using the new psychological techniques. ’Packs tend to be
designed in isolation and tend to be very confusing. Often there are
only two or three elements that you actually need - a colour or the
shape of a line - to communicate clearly,’ says Scamell-Katz.
At the moment, these methods are in their infancy and it is
manufacturers which are setting the pace - largely because they have to.
Clearly, improved understanding of consumer behaviour at the point of
purchase will increase the emphasis on that area. Whether or not it will
reduce the importance of more downstream marketing activities, such as
brand creation and advertising, it is too early to say.
However, it is clear that if the insights provided by point-of-sale
psychology are ignored, the classic techniques of product development,
pricing, advertising and promotion will be completely wasted.