Sunday, October 23, 2011

The latest in the evolution of impulse buying.

WSJ reports on a new trend in grocery retailing: placing expensive packaged food near fresh healthy produce.
...stores are finding that consumers consider even packaged foods placed there [near fresh fruits and vegetables] to be fresher and higher quality—researchers call this a "halo effect."

Humans, like monkeys, are drawn to sweet bananas (yellow is a very tasty color). P.8 on the graphic says: Grocers place bananas toward the back to lure shoppers through the section. If I remember correctly, Trader Joe's has the layout closest to the one shown on the picture.

Brick and mortar stores are in a tough spot because shoppers, changed by internet shopping habits, know exactly what they want. Even women in electronics stores become less of impulse buyers.
Oct. 17 (Bloomberg). Women now go into a store, hoping to go right to what they need like a man would,” said Delia Passi, CEO of Hollywood, Florida-based Medelia Inc., which advises companies such as Home Depot Inc. on how to appeal to female shoppers.
Impulse purchases require people to browse the aisles, however, and that’s happening less and less these days because Web-savvy consumers often already know what they plan to buy and simply pick it up and leave, said Bill Martin, the chief executive officer of ShopperTrak.
These mission shoppers visit fewer stores -- three per trip, down from five pre-recession .
From a system evolution perspective, we see a transition from one S-curve to the next one. The old S-curve (brick and mortar retail) invented about hundred years ago is in the efficiency stage, where they have to squeeze out every penny from a limited set of value scenarios. Further, they've got a fixed setup and lack the ability to customize shopping experience for a particular shopper or a demographic, as web retailers do. All product browsing and impulse shopping moved to Internet retailing, which is in the growth stage of a new S-curve. Proliferation of connected tablets and 4G networks will further speed up the transition process.

tags:  10X, system, s-curve, efficiency, growth, business, model

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