University of Pittsburgh: Longer and Further Customers Stay in Market, The More They Buy
The sale rules of running a supermarket are supposed to be changeless for a long time. First, arrange the market as maze and put the necessities such as vegetables, fruits, eggs, rice into different corner so that customers need to go around in the market to find what they need. At the same time, they may notice the commodity in other good shelf and take some impulsive commodities like candies and cookies into the check-out desk, which is called maximizing consumption.
Not only through arrange the settings of different kinds of goods, a new technology is try to make the time-tested rules scale a new height. A study of Business College of University of Pittsburgh may change the running ways of markets in the future.
The research team find two chain market in Oregon and Pennsylvania and hundreds of volunteer customers to carry out the ambitious plan. The applied technology seems not difficult that the researchers just utilize RFID tags and the app of smartphone. Researchers would interview the customers before they enter the market and put a RFID tag on their bags or clothing so that they can master the movement of the customers at any time. Then they would send message by app and count the money when they check out.
According the the result of the research, the traditional sale rules are considered to be right that every 55 feet they go, which means that every 20 steps they take, they will spend 1 more dollar. Since the selling skills has been admit again, the following challenge is how to let customers willingly to go further in the market? After all, the store manager can’t stain customers to go to every corner in the market.
Though manager can’t force customers, he can induce consumption. This time, app can come in handy. Researchers plan to utilize app to induce customers to go further, so they divide the volunteers into two groups. One group can receive the coupon message away from the route they are shopping, the other group just receive the coupon on their route.
The result showed that coupon is able to increase consumption, especially the inducing method. Customers who receive coupon message on their route spend more 13 dollars each person, but customers on the other group spend more 21 dollars each person, which is up by 61% in their cost.
Sometimes, the gross profit rate of some American supermarkets can be as low to 1%. As the force of big supermarkets like Walmart and Costco and the compete of new rivals like organic food chain store Whole Foods and Trader Joe’s, markets are faced to a huge difficulty. Albertsons has spent 9.4 billion on buying the second largest chain store Safeway, trying to expand the competitive advantage.
In such severe competitive condition, the study of University of Pittsburgh may become a new weapon to markets that is able to increase 6 times sale. Due to the technology is not complicated, it is bound to lead to the positive study in marketing. Besides, customers tracing may not depend on FRID tags. Camera with identify software can be utilized to master customers’ movement. It is predicted that supermarkets will take advantage of technology to develop the traditional selling skills and inducing customers to go further and buy more till they are tired and run out of their money.