Beyond obvious

Posted by Kathleen Fasanella on Apr 6, 2007 at 1:19 pm / Fulfillment, News and Events, Sales and Marketing / Trackback

This first bit has nothing to do with apparel but I was struck by the news about the french architect who’s proposed the theory that the pyramids were built from the inside out. Not having studied pyramids at length but still, owing to their internal complexities, I’d always assumed they’d been built that way. Furthermore that this was so well known that it wasn’t the slightest bit remarkable much less a controversial new theory. I mean, isn’t this obvious? Sometimes I wonder where my head is at, it never occurred to me that leading researchers thought it’d been done any other way.

Continuing with the beyond obviousness concept, retail researchers have determined (free but registration may be required) that having more salespeople on the floor or reallocating them, “drive customer satisfaction and retail execution success.”

But what surprised Fisher, Netessine and Krishnan the most was the potential financial return if the unnamed retailer were to make even a modest investment in hiring more staff…”We were amazed to find how this retailer could increase sales by changing its staffing resources through adding more employees or simply reallocating existing staff,” says Netessine. “In some stores, the sales leap would be $28 to $1 in employee costs, and that was really striking. We were blown away. It never occurred to most of the retailers that by moving employees around the stores, you could increase sales.”


In another piece from Wharton (How the Offer of ‘Free Shipping’ Affects On-line Shopping), I think it’s obvious that online shoppers like free shipping, but I didn’t know to the extent that this benefit had an affect. I do like buying from Zappos because I don’t have to worry about paying return shipping if the item doesn’t fit. It’s not the money and it’s not even the hassle of returns since I’m set up to absorb that function. I can’t define it but it feels like a stupid tax, that I have to pay a penalty for having bought the wrong size, making a mistake and incurring a financial penalty I would have avoided if I could have the opportunity to try them on at a store (I can’t around here). This article is a good one, well worth clicking through.

Consumers like free shipping offers, perhaps because it makes the online retail transaction more comparable with that at the neighborhood store. Whatever the reason, it’s clear that consumer behavior changes when shipping fees are imposed. With fees, shoppers will make fewer shopping trips and purchase more goods at a time — not unlike shoppers who drive great distances to a particular store, Bell says, and decide they had better stock up while they’re there. Alternately, fees can prompt consumers to simply walk away. A survey from 2004 found that shipping and handling costs triggered 52% of the abandonment of online shopping carts, Bell says.

This next quote is telling, reflecting the position of most internet retailers (self included); maybe we should rethink this -unless you already offer free shipping.

While some might argue that shipping fees are merely a substitute for the time and travel costs involved with visiting a bricks-and-mortar retailer, consumers may not buy that argument, Bell notes, adding that the link might not be so clear in the minds of many because travel costs are not collected at the traditional retailer’s point of sale.

I’m willing to experiment. I know how many books I sell weekly; the figure fluctuates depending on the calender but I’ll test this out. Send me with free shipping in the subject line (or mention it by phone 505-877-1713) and you’ll get free shipping on your book purchase. Provided you get it from me, I have no control over what Amazon tacks on and I have to pay nearly $12 in commission on every title I sell there. Still -and speaking of Amazon- I probably overspend there in part (in part!) because I get free shipping. I got a free trial for that service but they’ve never billed me, it’s likely I meet the monthly spending threshold anyway. It’s like getting a free book with each order. And not just books either, whatever I buy. With printers and hardware, the savings can be substantial, $35 or more. I can get even more of a return if I click on any of my Amazon links to navigate to Amazon because my trip will be embedded with my affiliate code and I get a referral fee on anything I purchase in that session-or yours if you do that. I know some of you do that and I really appreciate it. Joan wrote me the other day saying she did that to buy some pricey hardware. I’m going to have to take her out to lunch!

Before I digressed, I was talking about obviousness. Now I want to know why we don’t do things that are obvious. Like buying compact fluorescent bulbs when the savings are so dramatic. While a compact fluorescent costs maybe $2 each when buying singly, they save $30 to $100 over traditional bulbs. Some hints to the answers can be found in a recent post from NeuroScience Marketing called Green Neuromarketing.

In fact, neuroeconomics research provides a logical explanation of the slow adoption rate for the fluorescent bulbs. Consumers “know” what lightbulbs cost from years of experience. Seeing a price of $5 for one bulb is likely to create an automatic, “Wow, that’s an expensive bulb!” reaction, while four bulbs for a dollar will do just the opposite, prompting, “Gee, that’s really a bargain!”. Based on work by CMU’s George Loewenstein and others (see The Pain of Buying), we know that prices perceived as too high activate the pain centers in the brain. In that study, researchers could predict whether or not a consumer would purchase an item just by studying fMRI brain scan data with accuracy almost as equal to the subjects own self-reported purchase intention.

People buy cars because they make a statement about the owner, and the Prius says, “I am doing my part to save the environment.”

The problem with compact fluorescents as compared to a Prius is that they don’t offer the same signaling opportunities. By that I mean you can tool around town in your Prius and “signal” to passing strangers how cool you are but these signaling opportunities are limited with the mundane light bulb. And clothing for that matter. There’s no way -unless your brand is well marketed and known- your line can signal eco-coolness and the benefits of your process. There’s a lesson in there somewhere but it’s not obvious.

[Edit]
Grace sent me the link to a post she wrote (how we found her blog in the first place) called Stick that up your light socket balancing the sustainability debate with an explanation of why incandescents are useful.

Now, California’s legislators are talking about banning incandescent light bulbs altogether. There are so many more productive ways they can spend their time. Where to start?

First, CFBs cannot completely replace incandescent bulbs. Most CFBs hum when used in dimmable light fixtures. The few (and expensive) dimmable CFBs on the market do not have the same dynamic range as incandescent bulbs. Since CFBs take up to 15 minutes to reach maximum brightness, you wouldn’t want to use them for lights that are used only for short periods of time–say in a closet, a refrigerator or a bathroom.

11 Responses to “Beyond obvious”

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Grace
April 6th, 2007
2:05 PM

I am writing this while wearing my 10 year old “mommy jeans” and cardigan. I am not frumpy. See, I am so hip and ahead of the eco-chic curve, I didn’t bother to replace clothes that are still functional!

According to the labels, the jeans were made by a union shop in Canada. I couldn’t replace them even if I tried.

Josh
April 6th, 2007
2:12 PM

Now I want to know why we don’t do things that are obvious. Like buying compact fluorescent bulbs when the savings are so dramatic.

We tried the flourecent bulbs and hated them so much because they have the most unflattering glow to them, it’s like being in Wal Mart. I always get sick from flourecent lights. Regular bulbs have a more yellow romatic glow to them. If they could figure out a way to make them have a more natural glow I would use them. Fluorescent is fine for closets and stuff though.

J C Sprowls
April 6th, 2007
4:42 PM

Color-corrected fluorescent are even harder to find. But, they’re worth it, in my opinion. Older fluorescents used to give me a headache; but, with new technology and a better understanding of color spectrum, they’ve improved significantly since then. The cost savings by using them is dramatic. Though, there are limitations to the application, like Grace supplies, above.

In Colorado, we have summertime and wintertime electric rates. Plus, we can apply for incentive programs. Last year, I received a $120 rebate (the equivalent of 2 months usage) for using less electricity than the previous tenant. All the bulbs in my apartment (with the exception of those mentioned by Grace) are color-corrected fluorescent.

I spent about $30 to install the bulbs under the assumption of estimated savings of $39 per bulb per year off the electric bill. I decided to go this route to offset the usage of three industrial sewing machines.

Elizabeth
April 6th, 2007
6:46 PM

I got the bulbs on clearance (BJ’s) for less than 50 cents!!!! I haven’t seen them for that price since. I stocked up for the next five years, and all my friends got “energy efficient presents”, lol.
I agree on the light being harsh, but there are plenty of places where I can use them.

Lisa NYC
April 6th, 2007
9:34 PM

Several months ago, I replaced all my workshop lights with “Reveal” type (sunlight, daylight) bulbs. Yep…they were a few bucks more, but I absolutely love the clear light they give off. And you get a truer color when matching fabrics! A big plus!

oh…and yes, I often offer free shipping to my customers and they love it!

With friendship,
Lisa
downtown joey

carissa
April 6th, 2007
10:09 PM

Thanks for mentioning the lik thinkg about Amazon, Kathleen. I’ll keep that in mind.

About CFBs- we were shocked at our electric bill when when moved to this house. We have that re-sold electricity. We switched our bulbs, had a high eff. heat pump installed, insulated our hot water heater, and had it put on a timer. (It only runs during the hours that we use a lot of hot water, say 11Am to 7PM. Then it keeps the water hot during the off times b/c of the insulation.)We also installed heavy drapes or shades. Because of these changes we halved our bill! With that kind of savings, I don’t care if my hair looks green and my skin yellow. I also don’t care if others see how eco cool I am. I did it to save money, after all.

Suzanne
April 7th, 2007
3:04 PM

My customers love free shipping and nothing will upset them more than thinking you are gouging them on the shipping. I know how they feel. It feels like bait and switch to get to the checkout portion and find out a hefty “& handling” or too-high shipping fee has been tacked onto your order.

The items that are not free shipping I try to charge as close to actual shipping as possible. I put the weight of the item in the software when I stock the cart, and when my customer checks out a USPS module figures out their shipping. They can even choose the level of shipping they want and have the prices all laid out in front of them.

Once I accidentally shipped first class when the customer ordered Priority. Honestly, usually first class gets there at the same time. But she wanted Priority, and emailed me when she saw I had shipped first class instead. I refunded her $1.50. It’s not worth it to piss off a customer over $1.50.

About fluorescent lights, I swear I can see them flicker and hear them hum. My husband is constantly replacing all our bulbs with those lights and it’s a battle in our house. I feel like I can’t find any quiet and peace in a room with those lightbulbs. So to me, I don’t care what the long term savings is if I have to deal with sensory assault to get it.

carissa
April 7th, 2007
4:59 PM

ha ha! I meant to type “link thing” above

Alexzandra
April 8th, 2007
5:36 AM

Home Depot has a really nice selection of CFBs, and I’ve found them to be really helpful in a variety of situations. Some brands come in at least three or four temperatures, with cooler temperatures being more yellow. On the brand I bought there’s also a color meter image on the packaging to make the right hue easier to find. Sometimes you have to hunt through the bulb aisle to find them though, since the packaging is really basic, plane white with a single color accent (green, red, or blue depending on the temp.)

mkh
April 9th, 2007
11:31 AM

I read that the French architect had been working on his theory for 8 years full time…

Joan Hawley
April 9th, 2007
7:26 PM

Hi Kathleen,

Great post! As for lunch – count me in honey.

Joan

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