Get your free samples!
In general, people love anything free: from free WiFi to free books and everything in between, nothing beats free. However, there seems to be something especially magical about free food; from retail chains to Realtors with open house weekends, nothing drives interest better than the lure of free food.
No other retail chain is more closely associated with free sample offerings than Costco, but why? In some cases, the lure of free samples have boosted sales as much as 2,000%, but it is not just about the monetary factor.
Free samples can influence a shopper’s decision to buy. Many times people will buy something they never intended to, simply because they were offered a free sample. This is not just because we all have a weakness for frozen pizza; as Joe Pinsker at The Atlantic details, there are psychological factors at play whenever we indulge in the free sampling arena.
On a subconscious level when you’re given something free, from pizza to chocolate,you may feel obliged to buy something. As Dan Ariely, a behavioral economist at Duke University states, “reciprocity is a very, very, strong instinct; if someone does something for you (like hooking you up with the freebies) you really feel a rather surprisingly strong obligation to do something back for them.”
The dirtiest of secrets: activating hidden cravings
A free sample can also activate a craving you didn’t even realize you had. If you’re given a piece of chocolate you may suddenly want to buy M&Ms: Ariely believes, “what samples do is they give you a particular desire for something, if I gave you a tiny bit of chocolate all of a sudden it would remind you about the exact taste of chocolate and would increase your craving.” What retailers like Costco are doing by offering free samples is stimulation your mental and physical needs to buy a particular, or similar product.
Pinsker cites a study done in the UK, in 2011, which found that you are more likely to buy when surrounded by other people, like other samplers. Being surrounded by other samplers, or customers, creates a situation where “samplers with a heightened awareness of the presence of others at the sampling station may be a level of social ‘pressure’ to make a post-sample purchase.”
By offering multiple sample throughout the store, Costco, and similar retailers, are creating an environment where freebie hunters feel psychologically obliged to buy something, in order to repay the kindness of being offered a freebie.
Why Costco is on the leading edge
It’s not just about the sampling though, it is also about creating the Costco brand. Other stores give out samples, but few are linked to the notion as closely as Costco. Sampling has become something fun that keeps bringing shoppers back to Costco. Much like shoppers enjoy inexpensive hotdogs and pizza during their shopping trips; they’ve also come to associate free samples with shopping at Costco.
And perhaps this is why: free samples are a type of reward for shopping there, which then stimulated the need to buy in order to repay said freebie, and it becomes a cycle of wanting to experience the freebie, but feeling obligated to purchase: all-in-all a pretty good way to continually push different products.
Use the ‘Blemish Effect’ to skyrocket your sales
(MARKETING) The Blemish Effect dictates that small, adjacent flaws in a product can make it that much more interesting—is perfection out?
Presenting a product or service in its most immaculate, polished state has been the strategy for virtually all organizations, and overselling items with known flaws is a practice as old as time. According to marketing researchers, however, this approach may not be the only way to achieve optimal results due to something known as the “Blemish Effect.”
The Blemish Effect isn’t quite the inverse of the perfectionist product pitch; rather, it builds on the theory that small problems with a product or service can actually throw into relief its good qualities. For example, a small scratch on the back of an otherwise pristine iPhone might draw one’s eye to the glossy finish, while an objectively perfect housing might not be appreciated in the same way.
The same goes for mildly bad press or a customer’s pros and cons list. If someone has absolutely no complaints or desires for whatever you’re marketing, the end result can look flat and lacking in nuance. Having the slightest bit of longing associated with an aspect (or lack thereof) of your business means that you have room to grow, which can be tantalizing for the eager consumer.
A Stanford study indicates that small doses of mildly negative information may actually strengthen a consumer’s positive impression of a product or service. Interesting.
Another beneficial aspect of the Blemish Effect is that it helps consumers focus their negativity. “Too good to be true” often means exactly that, and we’re eager to criticize where possible. If your product or service has a noticeable flaw which doesn’t harm the item’s use, your audience might settle for lamenting the minor flaw and favoring the rest of the product rather than looking for problems which don’t exist.
This concept also applies to expectation management. Absent an obvious blemish, it can be all to easy for consumers to envision your product or service on an unattainable level.
When they’re invariably disappointed that their unrealistic expectations weren’t fulfilled, your reputation might take a hit, or consumers might lose interest after the initial wave.
The takeaway is that consumers trust transparency, so in describing your offering, tossing in a negative boosts the perception that you’re being honest and transparent, so a graphic artist could note that while their skills are superior and their pricing reasonable, they take their time with intricate projects. The time expectation is a potentially negative aspect of their service, but expressing anything negative improves sales as it builds trust.
It should be noted that the Blemish Effect applies to minor impairments in cosmetic or adjacent qualities, not in the product or service itself. Delivering an item which is inherently flawed won’t make anyone happy.
In an age where less truly is more, the Blemish Effect stands to dictate a new wave of honesty in marketing.
Google Chrome will no longer allow premium extensions
(MARKETING) In banning extension payments through their own platform, Google addresses a compelling, if self-created, issue on Chrome.
Google has cracked down on various practices over the past couple of years, but their most recent target—the Google Chrome extensions store—has a few folks scratching their heads.
Over the span of the next few months, Google will phase out paid extensions completely, thus ending a bizarre and relatively negligible corner of internet economy.
This decision comes on the heels of a “temporary” ban on the publication of new premium extensions back in March. According to Engadget, all aspects of paid extension use—including free trials and in-app purchases—will be gone come February 2021.
To be clear, Google’s decision won’t prohibit extension developers from charging customers to use their products; instead, extension developers will be required to find alternative methods of requesting payment. We’ve seen this model work on a donation basis with extensions like AdBlock. But shifting to something similar on a comprehensive scale will be something else entirely.
Interestingly, Google’s angle appears to be in increasing user safety. The Verge reports that their initial suspension of paid extensions was put into place as a response to products that included “fraudulent transactions”, and Google’s subsequent responses since then have comprised more user-facing actions such as removing extensions published by different parties that accomplish replica tasks.
Review manipulation, use of hefty notifications as a part of an extension’s operation, and generally spammy techniques were also eyeballed by Google as problem points in their ongoing suspension leading up to the ban.
In banning extension payments through their own platform, Google addresses a compelling, if self-created, issue. The extension store was a relatively free market in a sense—something that, given the number of parameters being enforced as of now, is less true for the time being.
Similarly, one can only wonder about which avenues vendors will choose when seeking payment for their services in the future. It’s entirely possible that, after Google Chrome shuts down payments in February, the paid section of the extension market will crumble into oblivion, the side effects of which we can’t necessarily picture.
For now, it’s probably best to hold off on buying any premium extensions; after all, there’s at least a fighting chance that they’ll all be free come February—if we make it that far.
Bite-sized retail: Macy’s plans to move out of malls
(BUSINESS MARKETING) While Macy’s shares have recently climbed, the department store chain is making a change in regards to big retail shopping malls.
I was recently listening to a podcast on Barstool Sports, and was surprised to hear that their presenting sponsor was Macy’s. This struck me as odd considering the demographic for the show is women in their twenties to thirties, and Macy’s typically doesn’t cater to that crowd. Furthermore, department retail stores are becoming a bit antiquated as is.
The sponsorship made more sense once I learned that Macy’s is restructuring their operation, and now allowing their brand to go the way of the ghost. They feel that while malls will remain in operation, only the best (AKA the malls with the most foot traffic) will stand the test of changes in the shopping experience.
As we’ve seen a gigantic rise this year in online shopping, stores like Macy’s and JC Penney are working hard to keep themselves afloat. There is so much changing in brick and mortar retail that major shifts need to be made.
So, what is Macy’s proposing to do?
The upscale department store chain is going to be testing smaller stores in locations outside of major shopping malls. Bloomingdale’s stores will be doing the same. “We continue to believe that the best malls in the country will thrive,” CEO Jeff Gennette told CNBC analysts. “However, we also know that Macy’s and Bloomingdale’s have high potential [off]-mall and in smaller formats.”
While the pandemic assuredly plays a role in this, the need for change came even before the hit in March. Macy’s had announced in February their plans to close 125 stores in the next three years. This is in conjunction with Macy’s expansion of Macy’s Backstage, which offers more affordable options.
Gennette also stated that while those original plans are still in place, Macy’s has been closely monitoring the competition in the event that they need to adjust the store closure timeline. At the end of the second quarter, Macy’s had 771 stores, including Bloomingdale’s and Bluemercury.
Last week, Macy’s shares climbed 3 percent, after the retailer reported a more narrow loss than originally expected, along with stronger sales due to an uptick in their online business. So they’re already doing well in that regard. But will smaller stores be the change they need to survive?
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