Five ways gamification can transform retail

I have no idea how fruit machines work. Sure, I get the ‘line up three bunches of cherries to win’ classic, but the all-singing-all-blinking monstrosity that mocked me in the pub yesterday? Absolutely clueless. And yet, somehow, its combination of twinkly lights, bashy buttons and blippy noises had me chucking coins into it like owning money was going out of fashion.

That’s because, as a species, we’re far more likely to engage with something if there’s an element of gaming involved. I’m sure there’s an evolutionary imperative behind all this: if you took a chance on the lady monkey with the weirdy, opposable thumbs, there was a better chance your offspring would survive the great banana famine of 7,000,000 years BC. That kind of thing. Don’t ask me, ask Richard Dawkins.

Anyway, we love gaming (and its sidekick, competition), and the introduction of these elements – conceptually known as ‘gamification’ – into any environment works wonders. The LinkedIn profile completeness bar is a famous example, and rightly so: users fill in more and more info to achieve a 100% complete ‘score’ and, in so doing, provide mountains more data back to LI, its users and, of course, its advertisers. Or consider the famous McDonald’s Monopoly scratchcard promo. You know they can afford to give you a free Coke with your next purchase regardless – they can afford to give every customer a free Coke – but the fact that you ‘won’ it in a scratchy-cardy-fun-time-giveaway? You’re far more likely to redeem the prize and give old Ronald McD your all-important repeat custom.

These days, gamification is big, big, big business. It underpins the success of social networks like Facebook and Twitter. It made getting in shape fun via Nike’s Fuelband and the Fitbit. And, according to the king of gamification theory, Yu-kai Chou, it’s even helping to cure AIDS, combat cancer, save the environment and feed the hungry.

So, how else can we apply this kind of gamification to retail and benefit from all the buzz, the engagement and, crucially, the sales it engenders? Here’s five simple-to-implement ideas:

1. Break free from ‘always on’ retail

Scarcity and impatience are core elements of Mr Chou’s excellent gamification framework and it’s not hard to see why. When something’s in short supply, we want it more. When something might be taken away at any moment, we determine to make it ours. When something’s hidden on the horizon, we strain to catch a glimpse. These are the principles that underpin everything from movie trailers to limited edition sneakers, and they’re principles which absolutely apply to retail. To some extent, we’re already seeing them in effect: seasonal promotions, flash sales, pre-sales – these are all signs that retail already understands that everyday products at everyday prices just doesn’t cut it in the real world.

But we can get more granular and more exciting than this. Instead of flash-sales where products are routinely available for a day, introduce some double-jeopardy where products can both time out and sell out. As the supply runs low and the clock runs down, the customer is faced with a stark choice: buy now (and tell your friends to buy, too) or run the risk of missing out altogether. Alternatively, don’t just put products on sale – trail them first. Let your customers sign up for an alert so that they can be the first to know when a deal goes live. Make them aware that, if they don’t sign up, they’ll most likely miss the sale and miss out on the deal. Then add a further layer of gamification by telling them that, the more people who sign up in advance, the bigger and better that deal will become in terms of quantity and pricing. By applying this tactic, you’ve turned a simple product sale into an event – and that’s a huge step in the right direction.

2. Drop the price as more people buy

Instead of offering all your customers a margin-busting discount, protect yourself by offering a limited quantity of products within a limited window of time. And here’s the gamification part: the more people who buy, the lower the price gets for everyone taking part. Will your customers bring in enough friends to hit the best-price target before the clock runs out? Will they get on board before the supply runs out? By adopting a flexible pricing model which improves with sharing, you’re actually incentivising your customers to go out and get you even more customers. Everyone’s a winner.

3. Add value as more people buy

Sometimes discounting just isn’t an option, so consider adding value instead. Again, keep the time and quantity locked down to inspire a sense of urgency and retain control but, this time, instead of dropping the price, add more and more value to the product bundle customers purchase for a fixed price. To give an example: a 30ml bottle of perfume could become a 50ml bottle once 100 customers buy. Then that could grow to 75ml once a further 100 join. And so on, until the promotion either sells out or times out. Again, the onus is on the customers to earn their discount via a flurry of sharing; the game is all about hitting these targets while there’s time.

4. Allow your customers to request their own deals

Crowd-sourcing suggestions makes a lot of sense (just ask Starbucks who’ve had over 150K submissions at their celebrated My Starbucks Idea site), but it gets even more engaging if the idea that’s most requested actually happens. And more engaging still if those ideas pertain to real offers you might set live on your real retail channel. Allow your customers to request forthcoming promotions, then encourage them to share, share, share to get some heat going behind their request. The most popular requests rise up a leaderboard – when they top the board, they win and come to life as deals. In the meantime, you’ve earned a mountain of buzz as people scrap it out to hit the top, you’ve acquired a raft of new customers and, essentially, you’ve secured a big pool of pre-sales.

5. Introduce the concept of ‘winning’ a product

On some level, all retail is about winning. The customer likes to think they’ve got a great product at a great price, that they’ve won. The retailer talks about winning business, winning the customer over, winning market share, etc. But this broad sense of ‘winning’ can be also be ‘literalised’ to dramatic effect. For every product or product category in your range, introduce a real winner per each set period of time: one customer, chosen either through chance or skill, to win the product for free. That could be the customer who refers in the most other customers (skill), or it could be every 1,000th purchaser (chance), or any other entry mechanism. The effect is much like buying a lottery ticket: you don’t buy one because you really think there’s a chance of winning, but there’s always that “what if…?” – and that’s a very powerful motivator.

Those are just five of our favourite ideas, but don’t hesitate to tweet me at @buyapowa if you’ve got any suggestions and we’ll be glad to add them to this post. Looking forward to hearing your thoughts…