CHRISTMAS NOUGAT: A SIZZLING SUMMER HIT! The paradox – Source of retail innovation

Nougat shop in Sort (company photo)

ABSTRACT

Many companies could leave the crisis behind them if only they could tap customer’s imagination, since, scientifically speaking, imagination is more powerful than reality to boost sales.

__________

This Summer in Sort *, a village of 2,000 inhabitants that nestles in the Catalan Pyrenees, a shop specialized in nougats (turró), opened.

Common sense

This business initiative  lacks of common sense, which has a link to the oldest part of our brain, and where all the knowledge gathered by our tribe throughout the years, lies.  That is the way things are because experience has shown it yields the best results.

Who would eat an elaborated sweet -which is not exactly light- in the middle of the hot summer? In fact, statistics show that nougat sales are stubbornly seasonal. And after all, that is what the figures are for: to listen to them.

So who in his sane mind would open a nougat shop in a bad communicated mountain village, and in summer?

The strange beauty of the paradox

According to the New Oxford American Dictionary, a paradox is “a statement or proposition that, despite sound reasoning from acceptable premises, leads to a conclusion that seems senseless, logically unnaceptable or self-contradictory”. In other words, it breaks with common sense. Taking such risks seems foolhardy in the midst of the current financial meltdown.

Xavier Gabriel, owner of Bruixa d’Or [Gold Witch] -a well known Spanish lottery agency- with his entrepreneurial instinct, thought things could be different.

Instead of selling ice cream and beer in Summer -something that is logical, perhaps too logical- , he thought he could boost ticket sales and at the same time extend the good time his customers have when buying lottery, by giving  them a very nice gift-coupon  to try some free nougat at his recently opened nougat shop, located 12 meters down the street.

His clients are not only French (who eat nougats all year round) but mostly Spaniards. Over 20,000 customers visited the shop this summer. When they come in, they can try seven kinds of nougat for free and wash it all down with a flask of sweet wine. Having a great time is guaranteed, and since the product is of great quality, most of the people end up buying something.

The shop is impeccably laid out and decorated, mime and good vibes are felt, and the shelves are always full. The nougats are complemented with Bruixa d’Or’s merchandise, such as witches brooms and little witches.

Three staff have been hired to run the shop (one in July, one more in August and a third one in September). They are well-paid because the shop opens seven days a week, holidays included. Gabriel takes care of his staff: “Things work when the team is smiling, motivated, well-paid and feels the business as its own”.

Before setting up the shop, Gabriel signed a deal with nougat supplier Turrons Vicens, from Agramunt, who supplies all the assortment and does the stocking.  In this sense, Turrons Vicens more than a supplier, is a business partner.

Learning, not recipes

(1) Is vital to grasp the contexts in which clients are found.

In this case, customers arrive in the Summer (not in nougat season), but they get the coupon when buying Christmas lotto (related with nougats season). In customers’ minds, buying lottery tickets, nougats and cava (Catalan “champagne”) have very strong Christmas connotations. Many companies could leave the crisis behind if only they could tap customers’ imagination, since scientifically speaking, imagination is more powerful than reality to boost sales.

(2) Every business model has a part hidden from the customer, such as the  suppliers’ policy. Instead of taking a ‘Dutch Auction’ approach with suppliers (who are forced to cut their profits to the bone), if they are treated as partners, they become allies. For example, what would Mercadona supermarket chain be without its supplier policy?

(3) Take a calculated risk when innovating. It is worth to allocate all the required budget to ensure the pilot shop fully embodies and validates the concept. If the R&D project fails, the amount lost should not threaten the company’s survival. Therefore, there should not exist the fear of failure.

Manager’s development can go through three stages:
1) Learn the rules of the game.
2) Find out how to win the game.
3) Re-invent the game.

Many who reach the second stage, move to a mental retirement.

Xavier Gabriel, is one of the enterprising souls who has reached the third stage. He has just launched his book “Nada es imposible” [Nothing is impossible] (2011, collection Alienta, 168 pp.), which sets out 111 “rules” and approaches that he uses in his entrepreneurial activities. This book is full of paradoxes.

 

(*): Translator’s note: ‘Sort’ also happens to mean ‘luck’ in Catalan. Add to this the fact that several highly publicised lottery-winning tickets have been sold at the Bruixa d’Or and it becomes clear why the agency draws punters from all over Spain. ‘The Gold Witch’ also uses the Internet to sell.
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Lluis Martinez-Ribes

Source: Código 84, October 2011, pages 212-213 (Burbujas de Oxígeno)

WE ARE (ALMOST) BIONIC. NFC, the new way to pay for goods and services

photo: blog.visa.com

ABSTRACT

NFC is an easy-to-use, intuitive technology because all it requires is a simple gesture with your mobile phone.

It increases customer comfort, because it reduces queuing time and there is no need to carry coins or waste time checking change.

__________

Count the number of plastic cards in your wallet, including credit, debit and the so-called “loyalty” cards. Would you be willing to add another card to your wallet?

Now calculate: How many centimetres away is your mobile phone from your body? Surprised? We are indeed almost bionic.

The telephone has practically become a “natural” extension of our hand, our fingers.

It is not by chance that a mobile phone is reported missing to the police after 4 hours, while a lost passport is reported missing more than a day later.

And what’s more, the phone has none of the problems of space that a wallet does. It is highly likely that with the advent of NFC, Near Field Communication, you will end up replacing it.

What is NFC?

It is an RFID technology that permits two objects in close proximity (usually not more than 4 cm apart) to identify one another and establish communication and data exchange.

One of these objects is typically a mobile phone with an NFC chip. The other may be a device in a store cash register.

How does NFC work?

When the customer goes to pay, if it is a small amount (for example, less that €20) s/he waves the phone near the reader embedded in the cash register and payment is made. If the amount is larger, the customer has to introduce his/her code and choose the credit or debit card with which to make the payment. The system then detects if this person has a “loyalty card” with the retail chain and points are automatically added.

Advantages of NFC

This is a fairly “invisible” technology with no problems adapting to it because it is easy to use and intuitive, needing just a simple gesture. And this is done precisely with the mobile phone, which you always carry with you.

NFC increases customer comfort because it reduces queuing time, and there is no need to carry coins or waste time counting your change.

This is an extremely safe technology because not only does it incorporate encryption to prevent fraud, but you cannot be charged the same amount twice, not even when you swipe the reader twice with your phone.

Why the phone?

My mobile phone is the interface that connects me to my reality, to my world. It is the bridge to my things, to what interests me and what I do. It does not identify me more than a passport, even though I identify myself more with it (and with what it contains) than with a passport. What’s more, it always has real-time connection to the Internet and, therefore, to a server.

NFC can also be used to receive offers or requested information by waving the phone near a chip embedded in a poster at a bus stop, for example. It can also be used for public transport ticketing or as a tool for access control to premises.

Its future

Several research companies point out that this technology is likely to take off in 2014 or 2015. Frost & Sullivan anticipate that the number of NFC-enabled phone users will reach 53% in 2015.

But for this to happen, all the operators (banks, cards, telephone companies, retail chains, etc.) will have to participate actively for users and retail stores to fully appreciate its usefulness.

And things are moving. Visa has already been piloting mobile payments with iPhones in Turkey, Italy, Poland and the United Kingdom. In Spain, telephone operators, Telefónica (02), Vodafone UK and Everything Everywhere (Orange and T-Mobile) have embarked on a joint venture.

In the USA, Google Wallet is almost ready, working in alliance with Citi MasterCard. Google wants to know what information people are interested in. This can be gleaned far more from what people buy than from their web searches. This will enable Google to sell more effectively-directed advertising and also charge retail chains for providing their links.

In Sitges (Barcelona), a trial run was carried out from May to October 2010, with the collaboration of La Caixa, Telefónica, Visa, Samsung and the town council, with 1,500 customers and 500 shops. 90% used the mobile phone payment system and 60% of the transactions exceeded €20, requiring the use of their code. Customers rated their experience 8 out of 10. 90% said they will continue to use it.

Although collaboration is needed, it remains to be seen which companies will come out on top, and how the NFC “control of the waves” takes shape.

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Lluis Martinez-Ribes

A BEAUTIFUL PATCHWORK. Understanding Carrefour Planet (El Pinar de las Rozas)

Imagen: Àngels Miralles (Creative Commons)

ABSTRACT

In launching Planet, Carrefour has introduced an innovation by “editing”, in other words creating, a new shop, through the bringing together of elements that others had already created. However, it has combined them very well, like a beautiful patchwork, which is bound to appeal to customers.

__________

15 years ago, a Carrefour manager, who was taking part in a retail programme at ESADE, invited Professor Dawson and me to visit one of its hypermarkets. In the electrical household appliance section, I commented that their sales in this area could experience double-digit growth if they changed their selling methods.  The manager replied that whilst this was probably true, he could not change things, because discount self-service was in Carrefour’s DNA.

In 2010, Carrefour presented a new retail concept, which constituted one of the greatest transformations in the hypermarket format. In Europe, its clientele was distancing itself – both the number of customers and the frequency of their visits were dropping.  Supermarkets have improved a lot, and the main specialists (FNAC, Decathlon, Sephora, Ikea, etc.) are very experienced. A drastic change was called for. And that is just what they have achieved.

The tip of the iceberg

 

The most enjoyable, amazing, multifaceted shopping experience that has been achieved is only the tip of the iceberg in the re-branded, revamped retail business model that Lars Olofsson, Carrefour’s CEO, has described as having four aspects: delighting customers, enhancing internal efficiency, enriching the corporate culture and creating a chain brand focused on the idea of being positive.  These objectives are designed to ensure that Carrefour is both the customers’ and the shareholders’ preferred retail firm.

The paradigms have been broken

 

With this new retail concept, we need to forget the traditional hypermarket format (everything under the same roof and at very low prices).

The shop becomes something like a shopping centre; a highly coordinated group of shop-in-shops.  Each of these has been decorated, furnished and provided with a range of products and services all specifically designed to suit the type of purchases customers make there.  Most of these shop-in-shops are specialised (with a wide range to take into account a very diverse public). However, the baby goods section breaks another paradigm by introducing a segmented store-within-a-store (containing virtually everything this specific segment requires).

Carrefour breaks with tradition and uses the retail method best suited to each specialised selling area: self-service, vendor-assisted sales, personal behind-the-counter sales and even vending.

The most conventional area is in the “canned and dry foods” (shelf-stable goods) section with aisles of tall shelving, self-service retailing and a discount feel, albeit with less visual pollution than usual.

The shabby look does not sell (as much)

Some analysts say that Carrefour Planet is too attractive, and that this will have a negative impact on their low-cost image. Mr Olofsson stated clearly that: just because a store has low-cost and competitive pricing, it does not have to look like a garage. Inditex and many others have proven this to be true.  This risk of the false perception of it being a pricy store is reduced further, if customers visit it frequently.

The people at the very heart

 

At Carrefour Planet, family shopping trips are much more fun than before. But there are other individuals that Carrefour wants to look after – their own team, in other words the staff. Carrefour’s brand values also apply to them.  “We are committed, caring and positive”. A real declaration of principles that deserves to be followed.

Action speaks louder than words

 

In a scenario in which gross profit margins for the sector appear crazy (food gross profit margins are sometimes higher than non-food ones), the greatest improvements have been made in the non-food sector, in other words the one in which people shop less frequently.  Despite this, the best Planet stores, such as the one we studied, have seen their figures rise by 9.9% in terms of both customer numbers and sales.

More food for thought – in the only non-specialist, segmented (baby goods zone) shop-in-shop, the increase was 73%.

The analysts, who say that pilot shops are expensive, do not understand the role they play in R+D.  Later stores will operate on a tighter budget.

The results are promising and the concept is due to be rolled out in several counties, including Spain.  Carrefour’s shares will probably rise due to the company’s new shops short-term results and especially because the brand is being strengthened.

Innovate or edit

 

In launching Planet, Carrefour has not reinvented the hypermarket, a format that was in dire straits in Europe. It has simply done something different, and done it better.  It has introduced an innovation by “editing”, in other words creating, a new shop, through the bringing together of elements, or business parts, that others had already created. However, it has combined them very well, like a beautiful patchwork, which is bound to appeal to customers.

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Lluis Martinez-Ribes

HIERARCHY, A SERVICE. Ranking improves the shopping experience

Image: Martínez Franch

ABSTRACT

Even though it not always has a positive connotation, to apply the idea of hierarchy to some aspects, may improve considerably the shopping experience, because it minimizes a lot of negative aspects in a shop trip.

__________

There are few words in the occidental world that rise more suspicion than “hierarchy”. However, from a neurological point of view, we are human beings that not only accept hierarchy, but also, in some way, need it.

Essentially, hierarchy is an organized whole, “something” that is perceived as a non-chaotic structure. In some way, an example of no hierarchy could be a typical teenager bedroom.

The concept is useful for a purchasing process.

 

To decide your own track

In an interview on an exhibition of Caixaforum (April 20, Barcelona), the prestigious architect Rogers declared that order is essential in every space, and it manifests in what he calls the scale, a group of areas that must be organized one inside another. In other words, hierarchy.

Although he wasn’t talking specifically about retailing, to create a pleasant feeling during the shopping experience, it is essential that the shop (including the parking area) can be understood in a split second after we arrive, the areas are detected and the importance the company gives to some of them is understood. Just like we do in a restaurant: we get visual hold of the space as soon as we get in.

A disorganised shop sells less (a 5% minimum) because it makes it more difficult to perceive the products, it distracts, it tires and reduces the effectiveness of the communication.

The corridors must have hierarchy, so no one will feel disoriented. The “big avenue” must be more relevant than the second level corridors. This way the “navigation” through the shop may be more intuitive.

Signage can be a very good help. Not only colours with a meaning, but also according to topics and area’s hierarchy. However the best signage is the one that is not needed. Something like the best shoes: you don’t think about them when walking, because they are not too tight.

An excess of signage doesn’t communicate better and even overwhelms people. Can you imagine that someone is next to you when you go shopping and doesn’t stop saying “I recommend you this product”?  People would say: “Stop nagging me!”

To understand the range of products

Sorting products out in the shop (specifically, the semantic structure of the assortment) aims to turn the range of products into an excellent way of communication, according to consecutive hierarchised criteria.

What kind of organising criteria should be found: the ones the public expects or maybe a new one? If the company wants to improve, logically the hierarchy should be the usual one –well executed-.  But if it wants to be innovative, some changes may be introduced, providing that the whole shopping route is an understood and appealing tale; a story where the customer would be the main character.

In museums (a kind of retail) the traditional organising criteria were chronology, schools and pictorial styles, etc. Usually they may be boring because they sort pictures out using those too obvious criteria. The Tate Modern was the first one to organize the artworks by topics. El Prado, in Madrid, achieved great emotions when they decided to face in the same room Las Meninas from Velazquez with the same name artwork from Picasso.

A display of products without any perception of organising hierarchy creates confusion and loses sales.

Cutting down is profitable

There is no doubt that improving the shopping experience is effective. A lot of times it is achieved by introducing positive things, but there is also another way: cutting down the inconveniences and efforts.

Hierarchy not only provides a reduction in doubts, but also achieves the feeling of controlling your own shopping process.

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Lluis Martinez-Ribes

PERKS? DON’T ANNOY ME.

Image: Lluís Martínez-Ribes

ABSTRACT

If companies make it easier for the customer to find a solution, not only do they reinforce customer loyalty, they also improve the perception of the service, reduce their costs and lose fewer customers.

__________

“Shopping experience” gets over 50 million hits on Google. So it is clearly not a new concept.

In the past, I have explained how shoppers’ behaviour can be changed by managing the specific meaning shopping experience may provide.  It is possible to stimulate the customers’ purchases, acting on their perceptions, for example by reducing their price sensitivity.

Thus, right from the start, the emphasis many managers place on increasing the average sales per ticket might seem reasonable. They can do this either by using “aggressive” media (for example, multiplying the number of “stoppers”) or by playing Shakira’s Waka Waka at full blast.

High-pressure sales?

However, one of the main drivers of a retail firm is customer loyalty. These companies do not make their profit from the gross margin of a transaction, however large that may be. Instead, their economic sustainability is a result of customer loyalty.  It makes more sense for a company to make its main priority to ensure its customers come back.

In hard times, it is not too important if customers buy less, as long as they remain faithful to the same shop.

Thus, it is a highly strategic move to manage the shopping experience, in order to ensure customers loyalty. The main way companies achieve this is by increasing the pleasant aspects of a customer’s shopping experience.

This is done for instance through videos, shop windows with animated elements, unique scents, backlit signs with LEDs, touchscreens, etc.  There is no end to the number of resources used to delight customers.

Reducing annoyance creates loyalty

A study by Dixon, Freeman and Toman (1) reaches the conclusion that simply satisfying its customers’ needs or exceeding their customer-service expectations does not make them more loyal.

Nevertheless, if companies make it easier for the customer to find a solution (2), not only do they reinforce customer loyalty, they also improve the perception of the service, reduce their costs and lose fewer customers.

If they can shop easily, without having to make a great deal of effort, many customers do not notice the absence of incentives on offer in the shop.

This route, reducing annoyance and effort, is very beneficial for both customers and companies.

Despite that, often the efforts customers have to exert are not detected, because they are considered to be “normal”: queues, too much choice, unintelligible information, products that cannot be found, inappropriate opening times, sales assistants who cannot answer customers’ questions, etc.

Once all the problems that customers come up against have been identified, the company may look for ways of solving them.

New indicators

Moreover, it would be a good idea to use a type of indicators that could provide information on the company’s capacity to create loyalty.

For example, the percentage of time spent in the shop that customers feel annoyed or have to exert a great deal of effort.

Or the same percentage including pre-shop and post-shop time.

This customer-centric approach may inspire the design of innovative retail business models.

(1) Dixon, M.; Freeman, K.; Toman, N. (2010): Stop trying to delight your customers, Harvard Business Review, July-August 2010, p. 116-122.

(2) See more in: www.martinez-ribes.com in the article: “Para vender más desde mañana mismo. Lo que realmente compra el cliente”.

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Lluis Martinez-Ribes

Source: Distribución Actualidad, the spanish retail magazine

(nº 425, may 2011)

SPORTS RETAILING REDUCES POLLUTION.

Image: Josep María Martínez

ABSTRACT

There is no reason for suporting Real Madrid or Barcelona or Ceuta. Indeed, there are emotions and shared social values.

Without them, a sports club has no future as a business model that hinges on implicit aspects in common sense.

Although it may seem strange, that’s totally applicable to the marketing of any company in retail.

__________

“The referee’s whistle is the only thing capable of stopping traffic in Barcelona,” declares Xavier Querol, a researcher at the Institute of Environmental Diagnosis (Idaea-CSIC). Car emissions dropped sharply around 9 pm on March 6th, 2007, just before the start of the exciting Champions match between Barcelona and Liverpool.

40% of football clubs’ income stems directly from this type of consumer behaviour, while teams in the Spanish BBVA League only earn 33% of their income from ticket sales.

Despite the industry’s importance, however, their general economic results are very poor, including some in a critical situation.

Sports clubs’ retail marketing strategies

The marketing aim is – to succeed, in becoming the preferred option in a sustained way, all the while being profitable. It is not just about advertising or promotions.

Continued preference translates into sustained cash flow. For top competition sports club management, the sustainability of this cash flow has been demonstrated to be directly related to the sports teams’ performance. Over the long term, the latter is determined by the quality of a club’s players and trainers. As such, being able to have the economic power to be able to hire the best ends up being a key factor for their success.

It’s a bit like the fish biting its own tail: if there is a chronic lack of titles, that team’s supporters will flounder and, in the end, so will its sponsors, leading to insufficient income with which to sign on great players who will contribute to the club earning more victories.

The aim is not to win titles every year, but to ensure that there isn’t a chronic lack of titles. A bad season doesn’t imply a serious problem so long as that sports club shares certain human or social values with its supporters. Without these values, a sports club has no future because it is a business model, which hinges on implicit elements and commonly shared feelings.

There is no specific reason why people support Real Madrid, Barça or Ceuta. What there is are shared emotions and social values. Barça’s slogan Más que un club (“More than just a club”) offers a glimpse of this. The same can be said for Atlético de Madrid’s (Atleti) famous ads, a team which succeeded in not losing any of its supporters when it fell to the second division.

Industry concentration

 

The current situation in the first division is no different to that occurring in other industries: a special type of de facto oligopoly. The Pareto Principle is also valid here: the top two Spanish clubs concentrate 53% of all income, and 25% of the income in Europe as a whole is channelled to only 20 clubs.

What is different compared to other industries is that this small number of very powerful clubs needs others to be able to compete. Without matches against these adversaries, they cannot demonstrate their superiority. A league is like an ecological system, similar to that occurring in nature.

That notwithstanding, there is greater unpredictability in sports retailing. In fact, teams train all week long, while their actual “production time” tends to represent only 90 minutes per week. The ratio between the time a club has to “demonstrate its power” versus the time to prepare, implies great risks in terms of guaranteeing results for its supporters.

Are we talking about football or about retail sector?

 

Don’t the growing concentration of protagonists, the sector’s poor economic results and the fight for sustained preference sound familiar?

Perhaps a lesson that can be learnt from sport teams is that the enormous power they have regarding customer preferences is based on sharing strong emotions and human values with their supporters.

References

www.lavanguardia.es/vida/20110312/54125164753/gol-a-la-contaminacion-del-aire-en-la-ciudad.html

Havas Media: www.slideshare.net/dolivo/foro-futbol-espaol-marcas-y-negocio

Gay de Liébana, J.M., Futbol español: Marcas y negocio. Univ de Barcelona.

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Lluis Martinez-Ribes

Source: Distribución Actualidad, the spanish retail magazine

(nº 424, april 2011)

FAN OR AIR CONDITIONING_Are “best practices” useful to innovate?

Mirror Neurons, responsible for empathy

Image: pdginnovates.files.wordpress.com

 

ABSTRACT

Best practices do not lead to innovation. Air conditioning was not invented by improving a hand fan. Not even improving the best one.

__________

When we are in a party and a lot of people start laughing, we will probably end up laughing too. But if some people are yawning, it is also very probable that it will spread.

There is a biological base that explains it all: the so-called mirror neurons lead us to imitate what we see in others.

That is probably why we enjoy detecting the company that is the best in a field, and then copy its best practices in our company.

It is not casual that field trips for visiting stores to far away countries arouse so much interest.

Carlos Losada and his thesis

Carlos Losada, Director of Esade Business School for the last nine years, wrote in his Doctoral Thesis (1) about the validity of the best practices.

He discovered that there are no absolute best practices. They may be the best in a specific context. Thus they not always work well when other companies use them in different circumstances.

From my point of view, I would also add that the best practices about topics that the customers can’t see (back-end ones) have a higher probability of success when adopted, than the ones affecting visible aspects for the customers (front-end ones).

For instance, it is more probable that introducing the best software to detect the opinions about the company in social networks is more successful, than applying an efficient range of sausages for supermarkets.

The reason is simple: in the back-end, technology and rationality are key factors. But the front-end is influenced by specifically human factors, like the cultural ones.

Next practices

One of the purposes of the managers is to devise a piece of future, and that entails innovation.

The best practices do not lead to innovation. Air conditioning was not invented by improving a hand fan. Not even improving the best one.

Managers should be interested in the practices to come (“next practices”).

To approach it there is a way that has shown to be effective: the innovation that comes from and is inspired by the life of the customers as a whole. This goes beyond the shopper marketing approach, because it includes the pre and the post shop.

Here comes the pack

Visualize a cycling pack sprinting to the finish line. How do you imagine the cyclist that wins?

 

Exactly like the one in this photo: risen arms, expressing the well-earned victory.

And how – on the same picture – do the ones that haven’t won appear? As you can see, pedalling with the best technique.

Human mind, for example the customer’s one, detects the emotional expressions of the leader. It doesn’t matter if his posture in that moment doesn’t have the best aerodynamics to pedal.

On the other hand, the ones that loose, even though they are showing the best practices for pedalling, are perceived as “one more” in the pack. Let’s not forget that 80% of the human brain activity is driven by the emotional, the unconscious, or the implicit.

That is why semiotics is more important than a bunch of good reasons when we want to achieve the sustained customers preference.

(1) Losada, Carlos. A Contribution to the Study of the Differences in Managerial Function: Political Managers’ Function and Civil Service Managers’ Function. ESADE FUNDACION, 09/2003

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Lluis Martinez-Ribes

Source: Distribución Actualidad, the spanish retail magazine

(nº 421, december 2010)

WHEN THE POINT OF SALE SOUNDS SMOOTH_ Reflections on the DOMUS system at L’illa shopping centre

Image: Rocio Rodriguez

ABSTRACT

L’illa shopping centre has scrapped the piped ‘music’ and has replaced it with a computer system that automatically generates abstract sounds. It is a radical innovation in the shopping experience field.

Researchers at Florida Atlantic University have shown that a given melody does not simply depend on musical parameters but also on each individual’s experience. In a multi-segmented retail setting such as a shopping centre, this initiative may make sense.

__________

Since the 31st of March 2010, the 17 million customers who have wafted through L’illa, Barcelona’s up-market mall, have done their shopping without music.

The decision was a controversial one because many authors, such as M. Gobé (2001), assert that music influences on the time customers take to do their shopping and even on the amount they spend.

The DOMUS system

DOMUS is not just another piped music system. In fact, it does not play music at all. Rather, it provides what might be termed “smart soundscapes”. This sound system has been specially designed for L’illa.

The heart of the computerised system is an automatic sound generator which adds in natural pre-recorded sounds—the tweeting of birds in a garden, waves breaking on the beach, the chimes of bells at midday, for example. It is as if the machine thinks up sounds in real time and orders them without any human help according to the following rules:

The sounds  have to be unpredictable, not repetitive, subtle, pleasant, and different for each area in the shopping centre.

The time of year, day of the week, weather, frequency of visits and pace of shoppers have to be taken into account.

The sounds must not be aggressive or ram tunes into shoppers’ ears. Rather, the idea is that  the soundscape ‘accompanies’ customers, especially when there are few people.

The soundscape should not alter visitors’ behaviour.

The sounds are appropriate for L’illa, an open building with lots of natural light and with its own courtyard.

The sounds appraisal is based on each customer’s subjective perceptions.

This innovation in retailing was the result of collaboration between L’illa’s management and Gracia territori sonor, an interdisciplinary social platform based in Barcelona’s Gracia District whose members share a passion for innovative music.

Doubts regarding DOMUS’ effectiveness

DOMUS is a ground-breaking system but like any innovation, it raises serious doubts.

On the one hand, there is still no evidence that it improves sales or creates greater customer satisfaction.

To measure its real impact, instead of administering questionnaires, whose replies may be biased, it would be better to look at the statistics on complaints to L’illa’s management before and after installing the DOMUS system.

On the other hand, DOMUS breaks with the idea (seldom well-implemented) of using music to change shoppers’ behavioural patterns in order to make more money.

However, Chapin et al (2010) at Florida Atlantic University have discovered that emotional responses and neural triggering depends as much on the parameters of the musical stimulus (for instance, type of sounds, tone, tempo) as on each person’s musical experience.

Accordingly, a given kind of music may generate different emotions in people. In a multi-segmented shopping centre, it therefore makes sense to avoid conventional songs.

Paradoxically this system maximises personalisation given that the sounds are subjectively interpreted at the neurological level.s

Innovation and leadership

Leaders, like L’Illa, may innovate with less risk and their customers expect so. Sometimes –  when innovating – they may save the music license expenses. s

(1) Chapin, H.; Jantzen, K.; Kelso, J.; Steinberg, F.; Large, E. (2010): Dynamic emotional and neuronal responses to music depend on performance expression and listener experience. PLoS One, Vol.5, No.12, p.1-14.

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Lluis Martinez-Ribes

Source: Distribución Actualidad, the spanish retail magazine

(nº 422, january/february 2011)