Adam (00:00):
And there's a great quote from a book, actually, our book, it took millions of years for a man's instinct to develop. It'll take many more for them to even vary. And that's the fact that actually, although we might be different generations as humans, we've evolved in the same way. Therefore, actually from a behavioral perspective, you can treat us all very similar. And the context trumps all when it comes to the demographic.
Mike (00:29):
Welcome back to retail oriented retail fans. My name is Mike Fowler. I'm the VP of retail sales here at the Sales Factory. We're really excited today because we've got a very special guest from overseas. We've got Adam Castleton, the CEO of Startle to talk to us a little bit more about consumer research, how that's impacting what you might hear while you're shopping in different retail channels. So Adam, thank you so much for joining us today. Really appreciate you being on the show, and good afternoon.
Adam (00:56):
Well, good morning. It's a pleasure to be here.
Mike (00:59):
Thanks so much for being on. So tell us a little bit about your background, how you began startle, and kind of your journey to here. Yeah,
Adam (01:07):
My background is technical. I love playing with technology, but I was always frustrated by how technology was forced into experiences for people and technology for technology's sake. So my whole career has really been creating experiences for people, whether that's in retail or trade shows or in the leisure hospitality industry, using technology to enhance those experiences rather than be a barrier or get into the way of an experience. And for me, the thing that motivates me the most is when I can walk into a store and see or hear our technology in use and having a direct impact on the customer experience.
Mike (01:46):
Kind of tell us about startle. What is it? Where might we experience it and what's the idea behind it?
Adam (01:52):
So we have offices in the UK and the US and we have retail and hospitality clients in those territories and further afield, some in Europe for example. And we work with those brands to really understand what their objectives are when it comes to customer experience in store, quite often they will be sort of direct commercial objectives such as wanting to increase box basket spend, for example, or maybe some softer objectives around increasing or decreasing dwell time within a store. They might have some challenges such as brand perception or they might be looking to improve team morale or productivity. So what we do as a company is we map those objectives, draw upon studies of behavioral science, add our own expertise and design an atmosphere that can help achieve what it is that they're setting out to do. We use music, curation, data and technology to do that and replicate that across all of their network of stores to ensure consistency.
Mike (02:46):
That's interesting because getting into things that we love at Sales Factory, which is kind of understanding consumers, understanding their shopper journey, understanding the buying cycle, how they're making decisions. We're going to touch on a lot of that today, but can we just start with how do you create a very standout customer experience? What are the things or the elements that you need to be thinking about to stand out?
Adam (03:09):
I think one thing people don't realize or take into account is that people don't notice or remember everything once they have been into an experience and leave. What they remember is the standout moments, the things that they didn't expect, and also how it ends. And there's a reason for that. There's a study actually and a theory called the peak end Rule where people remember the peaks of an experience and how they end over time. So the first thing we tell people actually is start as a customer experience the store walking, driving into the carpark, walking through the door as a customer and notice every detail, all the negative things that you could perhaps mitigate, all of the positive things that you could perhaps enhance and look for innovative ways to make those better, elevate the peaks because ultimately that's what people remember. So with the work that we do, we try to elevate those peaks.
(04:01):
We try to mitigate any negative peaks around queuing, for example. Busyness is a common one, visiting restrooms is another. These are all things that we can influence when it comes to atmosphere, ambience and music, and map out all of the problems that could be fixed with some behavioral science. It really helps if you can do something that's surprising or delightful that people don't expect because at the end of the day, after time has passed, it's those emotional moments, not the functional ones that people will really, really remember. Some great examples, actually, I don't know whether you have this in the US but Sephora, they introduced shopping baskets of two different colors. There was a red one for people that would like to be assisted and black. One for people, introverts like me that would prefer to shop without being interrupted. And again, it's a moment that wasn't expensive. It was a moment of unexpected delight that people would remember as they enter the store. And moments like that are really magical. So our advice to retailers is to look for those moments.
Mike (05:01):
I love that Sephora case study. We do have that in the states, and I've pointed to that one a couple of times myself because I think it's just a great example of understanding consumers and understanding their different preferences when they're in a retail location and then catering to that, giving them answers to what they prefer. So what are the types of things that we need to understand about consumers in order to create those types of experiences in order to elevate peaks, because I love that also elevating the peaks and the emotionals that you're feeling when you're having a shopping experience. What do we need to know about them and is there anything that we might not expect that we need to know about them in order to really key into how they're shopping journey is being perceived?
Adam (05:47):
Yeah, this is an area that we're quite passionate about because we think people prioritize this incorrectly and trying to know too much about individuals trying to pigeonhole people into a demographic. Actually there is a notion that's called the fundamental attribution error, basically, where people give too much attention to demographics and personality rather than context. When people visit a store, you see this all the time in marketing around customer personas where you'll have age, gender, demographic of our customer base, and this is why they're here and how they're shopping and how you should market to them. Whereas with that context, actually those personas are fairly meaningless. So I always like to use the example, and I know you have hardware store clients of me, a male in his thirties doing DIY, going to a hardware store. Now, I couldn't feel more out of place in a hardware store if I tried, but me as a millennial is more similar to my mom, a female boomer than I am the 30 year old tradesman visiting the same store.
(06:55):
So actually the context at which we visit is more impactful than the demographic. So we have another principle that we use called context is king, which is put context first. There's a great quote from a book, actually, our book that we use this it's, it took millions of years for man's instinct to develop. It'll take many more for them to even vary. And that's the fact that actually, although we might be different generations, different backgrounds as humans, we've evolved in the same way. Therefore, actually from a behavioral perspective, you can treat us all very similar. And the context trumps all differences when it comes to demographic,
Mike (07:32):
How people interact with different categories is very different. While somebody on paper and demographically may look exactly the same, we may shop for eyeglasses the exact same way and shoes completely differently. So it depends on the category and how engaged you are in different categories to understand how people will interact. And so the context that drives those behaviors is ultimate. And as you said, context is king. So you've kind of touched on demographic information is really not enough. How do attitudes and moods and all these other intangibles, how do they influence and start to shape behavior in a way that we can start to track and notice and take advantage of?
Adam (08:13):
I think that mood in particular is very important. Again, from a behavioral perspective, people have their guard down when they're in a good mood, and that's, again, evolution has caused that. So if you're not being chased by a tiger, of course you don't have your guard up. Therefore, if you can catch people in a good mood, you can influence them more easily. They're more malleable to buy something, they're more likely to buy something, they're less likely to have objections to a sales process or a store, a price or whatever. That's really helpful for us because we're curating music and the biggest drive we have, or biggest influence we have is how people feel the mood they're in. The second thing we can do is actually influence how they behave. So this is where demographics become less relevant because through emotion, evolution and behavior, that is all instinctive things that every human has, not demographic things that certain humans have.
(09:08):
And actually if we can improve somebody's mood when they're in a store through uplifting music and then change the way that they are behaving in the store because we can, because they're in a better mood, we can make them move through quicker. We can make them be more forgiving when it comes to Q or even change the perception of time, there's a theory in music science called the ISO principle. And one thing we do is we curate playlists based on metadata that we have around tracks, and they include valence and arousal, which is basically how happy or sad a track is versus how energizing it is. And the worst thing is actually if you had every track at the same level, you would go in and you'd feel exactly the same when you leave, you'll engage with some people though you're hitting the right note and you would alienate others.
(09:50):
So actually what we'll do is stagger in a progressive way, the tracks that we're using in playlists. So we might start at a lower mood, lower arousal and gradually increase them in a sequence of say, four or five tracks and they would drop back down again and always bring people from whatever state they're at to a higher mood so that they leave feeling good. Hopefully they didn't even notice that it was the music that did that. It was the customer experience that did that music was part of that. And then yes, when they're at that stage and they're at the check ads and there might be a queue, then we might be changing the music based on how busy a store is to make people more forgiving or think that time isn't passing as slowly as they feel it is. Mood is huge because it unlocks the ability to influence people, but also it's a tool that we can use to improve a brand perception.
(10:38):
There's other kind of less tangible things such as habit. So we find that people, customers are very habitual. They'll go in, buy the same stuff, look at the same stuff, browse the store in the same way as they always have done. And marketing alone is difficult to shift a habit. One of the easiest way to change a habit is to actually change the context. So is there something that we can make different about a store when somebody goes in so that we can start reinforcing new habits? It's a bit like if you're trying to quit smoking or drinking, for example. It might be that you hold something instead of the thing that you're trying to quit or you change your routine, changing the music, changing screens changing what's shown on screens, changing lighting, all those kinds of things can help shift habit. So as well as your marketing campaign, why not support that with a change of in-store experience so that people go in, it feels different.
(11:29):
I don't know why it feels different. You've just changed the lighting and the music. And then I say the third intangible is probably emotion, which is one of the most powerful things. And this is a way that you can really connect with customers. We use an example actually in the book where we have two hand sanitizer adverts. One says it kills 99.9% of bacteria. The other one is a phone with dirty fingers sticking out on each of the buttons to kind of illustrate the fact you're touching all of these dirty fingers in terms of which ad generates the best return. Obviously it's the one that had the emotional disgust element to it and rather than the factual one, and that just proves that emotion is so much more powerful than just logical facts. So yeah, we try to tap into mood, habit, and emotion because those three things are really quite a magic formula.
Mike (12:16):
I always feel that trust in trust with a brand, trust with a retailer, people do business and spend their money and interact and make decisions with brands and companies that they trust. So do you feel like that kind of is playing into maybe mood, emotion and then also developing habits in a way? Do you feel like trust is kind of an element behind all of those intangibles?
Adam (12:41):
Yeah, I think it's a mixture of everything. So you've got product, customer service, price, but ultimately all competitors have those things. So what else on top of that can you add? If you can add an experience where people have an emotional connection to a brand, I think by definition you are trusting that brand because you are opening yourself up to those emotions. The other thing actually is if you can be consistent with all of this is you create an expectation that the experience is going to be good. You create the expectation that the price is going to be good and that the brand is going to deal with you in a trustworthy way. That's called expectancy theory, where ultimately you experience what you expect to experience, even if the experience isn't what you expect. Taste tests, for example, where you're giving the same product. One is a branded product, the other is not. They taste different, obviously they don't. The same thing applies to entering a store. If you expect to have a good experience, you're more likely to have a good experience, even if the experience is exactly the same.
Mike (13:40):
We're talking a lot about emotions and just things that make us humans, that make us individuals and make us all different people. We're also talking about how technology is interacting with that overall humanity. Right. And do you feel like technology is keeping up with all, I mean, we're hearing so much about AI these days and all of the different aspects of technology. Do you feel like it's keeping up with the needs of us interacting as humans and making purchase decisions?
Adam (14:14):
If anything? I think the technology is too far ahead. I think there's a lot of technology that doesn't have a good business case to use or doesn't fit a journey. And sometimes you see those things being shoehorned in. So VR experiences, ar experiences, you don't need some of that stuff a lot of the time. And actually if it's just a barrier, there's no reason to use technology in the first place. That might be an old existing technology to use. So yeah, technology is there, is it all relevant? No. Is it all scalable? No. We're very cautious not to implement technology for technology's sake. And that's coming from a technology company. So we have a SaaS platform, we have hardware in stores, we have sensors in stores. So we're checking things like noise level, busyness level, temperature, everything around an atmosphere. We report that back centrally and adapt our music content and screen content volume and so on off the back of that.
(15:10):
But that's all very relevant technology. Yes, we use AI to screen tracks for lyrics and sentiment and so on, but we're not putting AI in front of the customer. We're just using that to improve process behind the scenes. The other approach that we take is we keep the clever stuff in the cloud and the hardware we install on site is either just gathering data like temperature, busyness, humidity. Those things are never going to change. They're just things we're always going to want to know. Our device is just sending them up to us in the cloud. So when we want to do different things with that information, we don't have to swap out legacy hardware. The same for our players for screen content and music content. They're just playing content. So if we want to play music, they'll always play music. But if we want to do something extra, something more clever with that, we do that in our SaaS platform, which is infinitely. You can develop that at an infinite rate. So if one tip that I would give is not to invest in much hardware, go for the minimal hardware option, invest in software solutions so that you can keep flexible and up-to-date use AR and VR if there's no need for it.
Mike (16:13):
Yeah, technology for technology's sake is a big no-no. Yeah, I completely agree. I think it's interesting the way that you phrased it. The ideas are what's lagging behind. That's a great way for our listeners and viewers to think about it. So think about the creativity and the idea that's going to drive the behavior that you want and then think about how to implement the technology or whatever to get the behavior that you want. But the idea is where the money is, right? That's where you can make some real influence. So that's really good stuff. Alright, retail fans, thanks so much for tuning in. We're actually going to break this conversation into two parts because we're enjoying this conversation with Adam so much. So make sure you tune in next time a lot more to talk about the future of technology and how that's interacting. So we're excited about getting into that, but we want to hear from you.
(17:04):
So if you're got a question about this particular episode or there's an episode or topic that you want to hear about in the future such as music theory, drop it in the comments and let us know what you're interested in hearing about. Or you can shoot me an email directly at mike.Fowler@salesfactory.com. And don't forget to click the like button, subscribe and click the little bell icon up in the corner so that you always know when there's a new retail oriented episode for you and some fresh content, maybe even a fresh idea for your marketing strategies. And remember, when you're thinking about the retail channel, it's always about selling in and selling through.