Checkout Lane Impulse BuyingOne of the most curious behaviors exhibited by consumers is their propensity to make unsought or impulse purchases. Just walk into any convenience store and you are bound to see someone making a purchase they had not thought about making when they first entered. Appealing to the unplanned purchaser is a key marketing strategy for many companies, such as those selling fast foods, snacks and soft drinks. Firms in these industries, and many others, make every effort to have their products noticed while a shopper is still in the store. For instance, while standing in the checkout line at a grocery store, consumers are surrounded by racks containing candy bars, magazines and money cards, as well as small refrigerators containing soft drinks. In convenience stores, there is barely space on countertops as these are well stocked with takeout food.

However, to successfully appeal to impulse purchasers, a marketer must make sure the consumer is slowed down. Customers who breeze through a store may not be exposed long enough for unplanned buying to set in. The result is that sped up customers are leading to a slowdown in impulse purchasing. The reason, according to this story from the Washington Post, can be traced to such retailing trends as self-checkout lanes, curbside pickup and online purchasing. Additionally, the story examines how the reduction in impulse buying is negatively affecting candy giant Hershey. The company is now responding by planning new ways of stimulating consumer unplanned buying. Their efforts will focus on the use of new technologies and, more importantly, new locations for placing their products. The options being tested include adding kiosks or menu boards in curbside pickup areas, adding vending machines in unusual locations (e.g., next to gasoline pumps) and placing new candy dispensers at self-checkout spots.

Curiously, much of the slowdown in impulse purchasing is happening because of changes made by retailers despite the fact that such purchasing can be quite profitable. For instance, as noted in the story, while products sold around a checkout area represent just 1% of a supermarket's sales, these products represent 4% of total profit. So it would seem retailers may be very open to new new ways to spur unplanned purchasing.

We have mentioned many times in our KnowThis Blog that the competitive environment forces marketers to be creative. For instance, we recently looked at how creative methods are used to design new toy products. We also saw how a creative pull promotion was used to increase movie theater sales. And we discussed how designing creative advertising can help a brand stand out.

It is important to understand that being creative does not mean a marketer must sit in a room and come up with all new ideas on their own. Good marketers know ideas come from a variety of sources, such as conducting research to find out what customers want or observing how marketing is done in other industries. Additionally, many marketers shift idea development by hiring specialized companies, such as advertising agencies.

Along the lines of shifting idea generation, there is a growing alternative for finding creative marketing concepts. According to this story in the Los Angeles Times, marketers are turning to crowdsourcing as a way to generate ideas. Crowdsourcing is most often associated with fundraising through such websites as Kickstarter. But websites, including Talenthouse and Tongal, now offer marketers access to potentially hundreds of creative people. On these websites, marketers place a request for ideas, generally seeking new designs (e.g., product packaging) and advertisements (e.g., video ads). The creator of the idea chosen by the marketer is then awarded a cash prize.

The crowdsourcing idea for advertising is not new. For instance, Frito-Lay has been running their Crash the Super Bowl ad creation contest since 2006. However, what is new is that crowdsourcing an idea is now being viewed as an affordable creative tool that can help almost any marketer.

In the KnowThis Blog, we make an attempt to cover a wide range of marketing topics. However, looking over our past posts, there is one topic that seems to capture our attention quite frequently. That topic is retailing, which we discuss more than any other. It is somewhat difficult to pinpoint the exact reason we discuss this so much other than pointing to the remarkable changes this industry has experienced over the last 25 or so years. In particular, thanks to technology, retailing has evolved well beyond what anyone would have predicted.

Unfortunately, not everyone in the industry has benefited from the technology evolution in retailing. As we have reported several times, many retailers, who made the mistake of not adapting to change, are no longer with us. We first discussed this back in 2010 when we reported on how Hollywood Video, a chain of video rental outlets, was calling it quits as new technologies had hit the company hard. In 2011, we again looked at failed retailers when we listed 11 U.S. retailers that went bankrupt after the 2008 economic downturn. While at that time we primarily placed the blamed on the economy, in a post a few years later that discussed RadioShack, it was becoming clear that the failures back in 2011 were as much the result of customers shifting their purchases to the Internet as it was to a down economy.

Today, we have the report of another retail casualty. As discussed in this New York Times story, SkyMall, the in-airline shopping magazine, has filed for bankruptcy. At the top of the list of reasons for their failure is the change in fliers' in-flight activities, which are due, in large part, to new technologies, such as tablet devices.

Like many famous retailers, SkyMall was unable to adapt easily to technological changes that have taken place. And because of this, along with most retailers that have failed in the last ten years, SkyMall will serve as an excellent case study on how not adjusting to technological innovation can negatively impact a company.

At one time, the catalog was considered a big deal in U.S. retailing. Leading retailers, most notably Sears, would produce numerous catalogs every year, each consisting of hundreds of pages. These direct mail pieces were shipped to homes, where customers would page through a catalog and then place their order by phone or, in the years before the telephone, by mailing a print order.

For most retailers, the days of catalogs are long gone thanks in large part to the Internet and e-commerce. While Sears built its business with catalog sales, they are now barely surviving, with many blaming the retailer's struggles on their slow response to recognizing the Internet's impact on retailing. Other big catalog retailers, including Montgomery Ward, have also gone away.

So it is a bit curious that another struggling retailer, JC Penney,  is returning to the catalog business. According to this Entrepreneur story, after a nearly six-year absence JC Penney is once again sending out catalogs. As the story notes, the new catalog is very different from the last one they mailed in 2009, which contained over 800 pages. This one is a much skinner version, 120 pages, and likely serves more as an alternative to looking at products on a computer screen, as the actual purchase is still mostly made online.

JC Penney's return to direct mail catalogs may also be an indication the company is beginning to feel they are on the road to recovery. Of course, given the incredibly competitive environment that is retailing, that road to recovery may require they come up with many more interesting marketing ideas.

Product NamingSeveral times in the last few years we have noted how difficult it is becoming for marketers to come up with names for new products and new businesses. Back in 2012, we saw the difficulties Kraft Foods encountered when they split into two companies and were searching for a name for the new entity. Kraft, like many companies, faced a number of challenges when contemplating a new name including whether someone else owns a name, how well a name translates into other languages. and whether there are Internet domains still available for a name.

Just two weeks ago we saw another situation where product naming was becoming an issue. The example this time was in the craft beer market, where companies are discovering that the explosion of craft beers has made it extremely challenging to find names for new beers.

Given the issues with product and company naming, it should be no surprise that there is a growing industry of firms offering naming services. One such company was highlighted in this New York Times story that was published last week. It looks at the circumstances that led a start-up tech company to seek out a naming specialist to create a company name. The story explores the techniques used to come up with various naming options and then what was involved in getting to the final name – Jaunt. If you think that name seems pretty simple, the path taken to get to that name is quite involved.

The story also offers a number of additional highlights including a brief history of the brand naming business. It also looks at what it costs to hire someone to develop a new name (as much as $75,000) and the key industries where brand namers are in demand. As would be expected, given the expense in using a naming service and as we noted in our post regarding the craft beer naming, companies offering naming services primarily direct their services to well-financed clients and not to small businesses that have little cash. While Jaunt is a startup, they are backed by some big investors including Google.