Why specialty brands must deliver an incredible shopping experience

Kent Stones  |  by Kent Stones


People spend money on specialty brands for a lot of reasons, but one primary reason is the psychological payoff they get, described by economists as “psychic income.” This concept is important to examine, because in today’s environment of comparison shopping and careful spending, shoppers have little tolerance for spending time or money on a specialty brand if the entire shopping experience doesn't deliver on this psychic “buzz” in some way. Based on our findings about three critical areas that influence psychic income, we will offer some general thought-starters for you to consider when designing a shopper marketing strategy.

In the summer of 2010, Callahan Creek conducted ethnographic research to gain some cutting-edge insight into shopping for specialty brands. Specifically, we focused on:

  • Gaining a deep understanding of shoppers’ attitudes, perceptions and behaviors around specialty brands and retailers, and
  • Learning if the definition and importance of the concept “specialty” varied by shopper segment and/or category.
Understanding the psychic income your brand delivers is not just nice to know, it's something you must know.

We studied shoppers using a variety of ethnographic methods, including in-context data collection grounded in semi-structured interviews, written exercises, home tours and shopping trips across a spectrum of shoppers and lifestyles. Data was analyzed using social theories of economics, tribal identity, symbolism and cross-cultural comparison.

We hope that our sharing these findings will help you:

  • Understand the meaning of psychic income and recognize why this understanding is important.
  • Discover what things have an influence on psychic income – in particular, the importance of “the mighty three” elements: sense of self, shopping location and use of time.
  • Consider ways to leverage “the mighty three” in the shopping experience for your brand.

 

THE CONCEPT OF PSYCHIC INCOME
Why do people buy specialty brands? This is actually a very interesting question, because more often than not, there’s an alternative that is cheaper or more convenient to purchase. People purposefully bypass alternatives and buy specialty brands because there is something about shopping for and buying these products that makes it worthwhile for the shoppers. They get some kind of payoff that outweighs any additional cost or inconvenience, and this phenomenon is called “psychic income.” Psychic income is derived from the intangible benefits that are above and beyond the utilitarian value of a purchase. Examples of this might include:

  • Buying an expensive wine to enhance feelings of self worth.
  • Buying expensive jeans at a boutique retailer because the fit improves self-perception of body shape.
  • Buying a high-end mountain bike at a local shop to obtain insider information on riding trails.

These intangible benefits are unique to each individual, based on their lifetime of experiences and how they have learned to successfully live and work in a particular culture.

Obviously, when we as shoppers ultimately end up buying a specialty brand over other mass brands, we must have made a comparison at some point; i.e., we've constructed a “true cost” for each of the products under consideration. This true cost includes not only the monetary (direct) cost, but also the non-monetary (indirect) cost of using our irreplaceable time—time we could have spent doing something else. For a specialty brand to have been chosen, its true cost must have at least matched, but was more likely better than, cheaper or more convenient choices. It’s because of psychic income (the intangible benefits) that the specialty brand was able to counter the extra time and expense required to buy it. So understanding the psychic income your brand delivers is not just nice to know, it’s something you must know. The next logical question is “How can I best deliver psychic income?” The answer is by understanding emotion.

EMOTIONS: THE FOUNDATION OF PSYCHIC INCOME
There are six basic emotions that are common across most cultures; people from different cultures share these emotions no matter what their economic status or location. 

By understanding the role these emotions play in the path to purchase, specialty brands can learn how to leverage or mitigate the true cost of their products to stimulate purchase. While there are many elements in the path that are out of a marketing team’s control, understanding how shoppers’ emotions are impacted along the way creates choices about which marketing levers to employ. If, for example, there is an aspect of the path to purchase that makes a shopper sad (thereby diminishing psychic income), will the price have to be lower to compensate? Can the fact that the product saves time or effort overcome that indirect cost? Can an in-store experience be delivered that is second-to-none in order to compensate for the problem in the path to purchase? 

We discovered when consumers are shopping, there are some very clear and consistent behaviors and environments that add to or subtract from psychic income, regardless of category. It is interesting to note that more of these factors are negative than positive, which perhaps says something about human nature. This forces specialty brands to be very conscious about mitigating negative factors and emphasizing positive ones to build psychic income.

These can be reduced even further and categorized into three distinct areas of importance to shoppers, the aforementioned “mighty three” elements: the shopper’s sense of self, the location where the shopping takes place and the amount of time the shopping takes. Each of these elements raises an important question you should ask your team about your brand’s shopping experience.


THE THREE QUESTIONS TO ASK YOUR SHOPPER MARKETING TEAM

1. Is the amount of time it takes to purchase my brand worth it to a shopper?

We rarely feel we have enough time in the day to accomplish what we want, and each of us has a certain point where the way we allocate our time becomes more important than the money we make or spend. Time truly is money – and your brand’s shopping experience can make deposits or withdrawals in the shopper’s psychic income “account.” When examining the time it takes the desired consumer to purchase your brand, you should also examine:

  • The time it takes to get to and find the store.
  • The amount of time spent navigating the store to find your product.
  • The time required to research sales, product quality, other brands or options.
  • The expertise and helpfulness of staff, which can decrease  (or increase) overall shopping time.
  • The time it takes to actually purchase the item.
  • The time it would take to return the item, if needed.

Each of these areas has an impact on a potential customer’s perception of the indirect time cost of buying your brand, and if there are elements out of your control you will have to compensate in other areas. This is why people end up going to “big box” stores, even if they don't like supporting large corporate entities: they save time. These stores are usually conveniently located and often have low prices on a large selection of goods, which can mean fewer stops to complete errands. How can a specialty brand that is sold in smaller specialty retail stores combat these big box advantages?

  • Emphasize that higher quality means less time fixing defects from the cheaper products.
  • Distribute in retail stores close to other errand stops, like grocery stores or pharmacies.
  • Make sure distributors and retail staff members are experts about your brand.
  • Reward those who make shopping for your brand a pleasurable experience.

 

2. What effect does the location where shopping takes place have on the shopping experience?

“Place” is a very important concept culturally, and it plays a much more complex role than simply the amount of time the shopping takes or the ease in getting there. If you spend some time shopping with your potential customers, they will provide some very important clues about the role of place in your brand’s purchase. Watch for:

  • The tradeoffs they make with regard to other ways they could have spent their time.
  • How they prioritized the errands they selected for that day.
  • What they gained from going to a particular location as compared to the time and effort spent getting there.

But again, there is much more to the concept of place than just geography, navigation or time spent getting there. There is also the local culture in which the store exists and the environment shoppers find inside the store. “Place” can help define who we are, increase our comfort level and even help establish guidelines for areas such as acceptable dress and behavior. 

When thinking about where your brand is being sold:

  • Consider whether peer groups will influence decisions and how that ties into the location.
  • Examine how shoppers will feel as part of the local culture and how they could be made to feel more included.
  • Use displays that communicate local guidelines for dress, behavior or boundaries.
  • Help the location become a hub for product-related knowledge or activities.

 

3. How will the shopping experience change or enhance my shopper’s sense of self?

People’s lives seem to constantly be in some form of transition. From the moment we are born we are constantly changing, evolving and transforming out of one life-stage and into the next. This is important to specialty brands, as the relationship between people and those brands will change as they transition from one identity to the next. For example, consider the implications for the shopper with regard to the clothing that is needed for different stages of life:



You can assist your customers in making these life-stage transitions by using their shopping experiences as a way to guide them on “what’s next.” Consumers appreciate this kind of help, and it’s a great way to build the psychic income associated with your brand. Other ways you can engage with a shopper's sense of self include:

 

  • Discovering and assisting consumers with their “collections” (groups of related items purchased to help advertise their identity) as a way to support their personal “branding.” Examples of collections might be clothing items for a pet (to “advertise” the owner’s love for the pet), or ten different kinds of Nikes (which might display a desire to belong to a particular group).
  • Understanding the partnerships and relationships that have most influenced the consumer’s sense of self: Who do they socialize with and how? Where do they acquire knowledge and from whom? What recommendations do they seek and trust?
     
  • Avoiding the mistake of making assumptions based on traditional demographics. With income, for example, regionality and self-perceived wealth are very strong influences on specialty brand interest and purchase. Someone making $40,000 a year, yet who sees themselves as upper-middle class, may very well be as valuable of a target as someone with higher income and the same self-perception. If the consumer thinks they are in a certain class, don’t argue. There are a number of reasons why people classified as middle or lower income do, indeed, buy specialty brands.


ALWAYS REMEMBER THE MIGHTY THREE
So the next time you are working on your shopper marketing strategy, step back and force yourself to ask and answer the three questions. You'll likely discover insights that lead to some new and different ideas, or at least help you make the strategic choices that will result in the psychic "buzz" that gives your brand the best chance of being purchased. Said another way, think of every marketing decision as to whether the outcome will result in psychic income deposits or withdrawals – and make sure your brand “out deposits” those of your competitors.


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