NMA’s feature “Another Way”, published last week explores the role of sub-optimal journeys in online stores and the guys were kind enough to include a quote from me concerning the fact that around 60% of offline purchases satisfy “latent demand”, products that catch the eye of the shopper as they browse the shop.
The idea of serendipity, finding one product whilst looking for another is great and Maxymiser cross sell optimisation can help marketers to exploit this in the real world. We would suggest that these additional basket items shouldn’t be considered random, there must be a process to guide customers (without them sensing it) towards likely cross sell and up sell items to really take advantage of this.
Just because demand is latent doesn’t mean you can use random activity to get people to respond. If that was the case Tesco would use dumper trucks to deliver their goods to stores and tip them in through the open doors so customers could have a good rummage. Shoppers would belay themselves up to the tomatoes and their trolleys would be 4 wheel drive to cope with the terrain.
Capitalising on latent demand is about creating linkages between products and services in a way that customers like and find interesting. Linkages occur in product attributes, patterns of consumption and market dynamics. Customers find them so interesting that they decide they want some of something they had no initial intention of buying. The resulting increase in demand for a product can be 100’s of %.
An example is where a product is subject to a price change or something happens to bring it out of obscurity and into vogue. A flight to city X might appeal to user Y when price Z is offered and it’s reviewed in the Observer on Sunday, which user Y reads with his croissants every week. Prior to this user Y thought city X was type of vodka and they are amused to find out it isn’t. So Mrs Y says what they hell, we need a break - lets go!
Peter Ellen
MD (services)
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