Retail and Consumer Psychology 101: 8 Ways to Increase Sales & Influence Customers

This is a post by Abby Heugel.

As a retailer, you most likely don’t have a degree is psychology, but many successful retailers regularly use psychology to appeal to potential customers. It sounds complicated, but it boils down to the fact that every single human being basically has the same mental triggers that drive actions.

At a basic level, all humans want to avoid pain and seek pleasure. This serves as the base of all human action throughout every single day, and is something that retailers need to keep in mind.

That pain could come in the form of a high price, while the pleasure could be a must-have item or even just a free snack while they shop. Your job as a retailer is to figure out what pleasure drives your customers and what they respond to. Combining those persuasive psychological triggers with clever and effective marketing will be your key to selling success.

Have look at tips on how to do just that:

8 psychological strategies for increasing retail sales

1. Promote novelty

There’s a reason that people will literally sleep outside of Apple stores waiting to buy a new product despite the fact that the new versions are only minimally different than the ones they already offer.

That’s because a) Apple is great at marketing, but also b) according to neurological studies, being exposed to something new and novel increases how much dopamine is released into our brain. A lead doctor in the study summed it up as, “When we see something new, we see it has a potential for rewarding us in some way.”

Use this to your advantage by adding new products every few months to keep displays fresh and exciting, and create buzz for your products before they are released to get people excited about them. They might not be sleeping outside of your store, but they will be lining up to buy whatever it is that you offer.

2. Instill a sense of reciprocity

How many times have you gone to the grocery store and tried a sample or two of whatever food product they’re giving out? As you walk through the store, you probably feel a little obligated to put that item in your cart before you walk away. After all, they gave you something for free, so you should give something back to them, right? That’s the principle of reciprocity in action, and it’s a powerful tool.

In a famous study from Influence, Dr. Robert Cialdini found that subjects were more likely to rate others as much more likable when all they had done was simply bought them a can of soda. That’s it. One can of soda was all that it took to win the favor of complete strangers.

You can put this into action by offering a free gift with purchase, which is especially effective if you don’t tell them what the item is until they receive it. Not only will they be delighted that they got something for “free” and spread the joy through word of mouth, but they’ll be introduced to a new product and feel indebted to return to your store for more repeat business.

Other retailers are using the concept of reciprocity on regular basis. Apparel e-tailer Beloved Shirts, for example has its “Weekly Freebies” program where they choose a new accessory item that would be completely free for the first 100 orders. Shoppers just need to pay for shipping.

Why are they doing it? As the Beloved Shirts team notes on their website:

We love and appreciate our fans, so it makes us thrilled to give back to those who support us. Plus, we’ve found that giving freebies helps build brand loyalty (so it’s not all selfless). We’d love to see your freebies on social – be sure to tag us with #belovedshirts so we can find you!

3. Display social proof

As Cialdini says, “If you can get people who are similar to the person you’re trying to persuade to speak on your behalf, it’s a lot easier for you than if you have to try to hammer your message one more time into a reticent mind.”

And according to Nielsen, 83% of consumers trust product recommendations from their friends and family, which you can use to your advantage by creating a “Best Sellers” or “Most Popular” page on your website. You can also use customer reviews in your marketing materials to show how many people use and enjoy your products and your business.

Le Tote does this quite well. Their homepage has a section dedicated to what other women are saying about the service:

Of course, there’s also social media. Nielsen also found that two-thirds of consumers trust others’ opinions that are posted online, so partnering with online influencers who post about your business in a favorable light helps establish that must-have social proof.

4. Build a community

Everyone likes to feel like they belong to something, and shoppers are no different. As the founder and CEO of Starbucks, Howard Schultz, said, “We’re in the people business serving coffee, not the coffee business serving people.” While you might not have a billion dollar corporation, you do have the opportunity to make every shopper feel like something bigger than just a sale.

One way to do this is through a customer loyalty program that rewards them for being part of your retail community. Highlight a “Customer of the Month” on your website and give consumers something else to make them feel like they are now part of your community. They’ll be proud to be part of your group, and that word of mouth is priceless advertising.

5. Create comfort

Everyone knows that convenience is king, and appealing retailers who provide their customers comfort while shopping have greater chances of converting them into buyers. This can be done by simply offering complimentary drinks or snacks, but more importantly, by making things simple.

Make sure your website is clean, neat, responsive, and opens on all kinds of devices. Provide all the necessary product information shoppers might need and include your contact information front and center so they can reach out if more information is needed. You can also offer a money back guarantee, which makes customers comfortable and more inclined to purchase more.

6. Invoke urgency

People don’t like to feel as if they’re missing out on something, and urgent situations cause most of us to make quick decisions. This can be an extremely effective marketing tool, but only if you include a specific call to action and drive them toward those specific actions.

Hold a flash sale on a specific product or offer a discount to the first 10, 20, or 30 buyers who come into the store. Use language like “only 10 left in stock” or  “limited edition” so the buyer knows that they must take immediate action. And if you’re selling online, adding a ticking clock to the purchasing page reminds them there’s no time to waste.

Here’s an example from YogaClub, which recently ran a “free leggings” promotion for a limited time.

7. Tell a story

Humans have been telling stories for thousands and thousands of years, and for good reason. We like to connect, and studies show that reading stories creates a complex physiological reaction in our brains that activate all our neurological senses — including oxytocin, which powers trust and empathy.

Tap into emotions with creative displays that explain to shoppers where the item came from, who made it, what the product will do for that shopper, and what their life will look like after they’ve purchased it.

Telling the story behind an item may also be a great approach for you. Convey, a boutique in Toronto, for example, engages in-store shoppers by talking about the designers of their products  — i.e., who they are where they’re from, why designed a certain piece, etc.

8. Set minimal parameters

Have you heard of analysis paralysis? It’s when consumers are given so many options that they are literally overwhelmed to the point that saying “no” is easier than trying to figure out exactly what they should say “yes” to.

According to a study by Dr. Robert Cialdini, Professor of Psychology at Arizona State University, offering a minimal call to action can lead to maximum results. They asked, “Would you be willing to help by giving a donation?” and “Would you be willing to help by giving a donation? Every penny will help.” The difference is subtle, but what they found was the second group were almost twice as likely to donate, believing that “even a penny” could make a difference.

When making a request for people to take action, you can help people break through “analysis paralysis” by giving them a minimal action to take. Pare down your product offerings to a few option and let them know exactly what they’ll get with each option, or create a set of lower-tier products that lead into your higher-priced offering.


About Francesca Nicasio

Francesca Nicasio is Vend's Retail Expert and Content Strategist. She writes about trends, tips, and other cool things that enable retailers to increase sales, serve customers better, and be more awesome overall. She's also the author of Retail Survival of the Fittest, a free eBook to help retailers future-proof their stores. Connect with her on LinkedIn, Twitter, or Google+.