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Marketing Buzz 07/02

A retail lab to figure out how shoppes shop and saving money after the postal rate hike

Spy Games

Tina Wilcox knows shoppers--and it's her mission to help retailers get to know shoppers as well. Wilcox, founder of FAME, a retail brand agency in Minneapolis, has created a retail lab where she and her clients watch how consumers shop in a real store setting. Her laboratory is a home and gift store called Once Famous in downtown Minneapolis equipped with cameras,microphones and an observation room behind mirrored glass. (Recordings are always announced to customers.)

Since opening the store in 2001, Wilcox has observed interesting things about shoppers: They buy blue and green items the most, women gravitate toward the left side of the store while men tend to go to the right, women tend to humanize objects (such as "I came to visit my painting"), and shoppers will pay more for a product in a more upscale environment.

Entrepreneurs can try a similar study in their own stores by putting up some observation windows, suggests Wilcox, or by closely watching who gravitates toward a particular display or product. But be warned: "There's a range of communication from consumers-from constructive [criticism] to really mean comments," says Wilcox. "Sometimes, it's heartbreaking because you hear what they are really thinking-but it's so valuable."

Hey, Mr. Postman!

The postage rate hikes that were implemented on June 30 don't have to break your bank if you're a direct marketer. Although mailing costs are increasing 7.5 percent on average with the new rates, marketers can implement a variety of measures to ensure mailings stay within budget.

By presorting mail or working with a presort bureau, you can take advantage of presort discounts. Also make sure the mail you send out is automation-compatible and includes bar codes, so it won't require special handling. Keeping an eye on the size and weight of your mailings will help you avoid manual-handling surcharges, as long as you meet the physical standards requirement for automation compatibility.

The fact that rates won't increase again until 2004 is relatively good news. And because the new rates went into effect in June instead of September (the start of the holiday mailing season), retailers will have time to adjust to the new system. "It means we're going to get through two holiday seasons with a modicum of rate stability, and hopefully it will help the industry recover," says Ed Gleiman, a consultant for The Direct Marketing Association and former chairman of the Postal Rate commission. For more information on rates, visit www.the-dma.org or www.usps.gov.

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This article was originally published in the July 2002 print edition of Entrepreneur with the headline: Marketing Buzz 07/02.

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