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Can Behavioural Science Help Cure the Blight on the High Street?

Posted: 19th April 2018 by
Andrew Watts
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The high street is reeling after a winter of ill health. Toys R Us, Maplin, House of Fraser, Claire’s: it seems that even stalwarts of the retail landscape aren’t immune to rising rents, the burgeoning ecommerce market and wavering consumer confidence. Below Finance Monthly gains special insight from Andrew Watts, Founding Partner, KHWS, The Brand Commerce Agency, on the impact behavioural science can have on high street performance.

Many other household names appear on the brink of crashing. The question must now be, is the high-street blight another blip or could it this time be terminal?

Nowhere are the symptoms more obvious than casual dining chains like Prezzo, Carluccio’s and Jamie’s Italian. These eateries and others like them have enjoyed the benefits of the booming experience economy in recent years, but not anymore.

Their current troubles are based in low consumer confidence which started with the financial crash almost a decade ago. As real-term income has dropped, and the cost of raw materials increased, consumers have become even more selective about how they spend their disposable income. Retail therapy is no longer proving the consumer tonic that it once was, and even the experience economy is under pressure. A nice experience is no longer enough; spending must result in a clear benefit and value for money.

The homogenised nature of casual dining is a sound example. The majority of chains are backed by private equity, so scale and profit are a key part of their basic business strategy. As a consequence, each brand offers similar mediocre food and a mirror-image dining experience. It’s become harder to charm consumers into splashing out and coming back. Add rising prices to the mix, and people can be forgiven for dining out less.

What’s unfolding in casual dining is symptomatic of a wider malaise on the high street, but this trauma needn’t be fatal. In casual dining, we can see the possible remedies that can be used to salve other areas of retail - a natural downsizing of the market coupled with stronger brand differentiation.

Understanding consumer behaviour is of fundamental importance to succeeding in this landscape. Establishing how and why spending decisions are made will empower brands to tailor their marketing messages accordingly. Behavioural science-led marketing techniques are now enabling brands to do just this, something that has not previously been possible.

Working in partnership with Durham University Business School, we examined the hardwired short-cuts – known as heuristics – that everyone uses to make decisions. We then identified and reframed the nine most relevant to purchase decisions; we refer to them as Sales Triggers.

For casual dining brands, there are two Sales Triggers that are particularly relevant and could prove the cure for the current problems ailing them: Brand Budgeting and Less Means More. This means using marketing messaging to demonstrate real value in a crowded marketplace (Brand Budgeting) and also offering something different or exclusive that enhances the experience when dining (Less Means More).

Despite the seemingly dismal outlook on the high street, some retailers are bucking the trend. Grocery discounters like Aldi and Lidl are triumphing because of their successful use of the Brand Budgeting and Less Means More Sales Triggers. There are some success stories in fashion retail, too. FatFace and Ted Baker have done well in the past quarter, posting robust Christmas sales. This is down to two things: a good product range and a strong reputation. This demonstrates their use of two Sales Trigger. FatFace uses Choice Reduction to simplify information and choice, so people don’t suffer from overload and default to their current behaviour. Ted Baker utilises the obvious truth, communicating well-held positive views of the brand’s heritage, to provide people with information that they are unconsciously seeking to confirm their beliefs.

Flourishing retailers are those who invest in understanding the key Sales Triggers that inform the purchasing behaviour of their customer base, and tailor their service output, products, tech and shopping environment accordingly. High-street brands seeking to replicate and sustain such successes can then use these insights to inform their marketing strategy. This differs from sector to sector, but can be clarified by a behavioural science-led approach which can inform marketing and ultimately present an offering and point of difference that will boost retailer longevity.

There’s no quick fix, but with the right sort of changes, the current retail retrenchment doesn’t need to be a terminal issue for the high street. Gaining a deeper understanding through behavioural science of how shoppers could help cure the pressures on the high street.

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