What Makes Shoppers Say ‘I Need This’: A Retail Psychology Masterclass

While in a store, when a product stops you in your tracks and makes you reach for your wallet, it’s retail psychology at work.

Today’s Social Pulse: Retail Edition guest Michael Casey pulls back the curtain on retail psychology and shares his knowledge with Agorapulse’s Chief Storyteller Mike Allton.

[Listen to the full episode below, or get the highlights of the Social Pulse: Retail Edition, powered by Agorapulse. Try it for free today.]

Share a story about one of your products that unexpectedly became successful and what you learned about consumer behavior from that experience.

Michael Casey: You said the AB doer—we call it that—and the AB doer, it’s an AB product, but it’s interesting how the retail psychology shifted on that particular product. We could not sell any of them. Nobody was ordering or buying them, and we couldn’t figure out why because we thought it was a great product.

Then I went back and looked at how many credit cards were getting denied. And you know what that told me? That told me that young college guys were trying to buy this product. And we were all in college at one time, but a lot of us have to check our balance before we go order something. So here’s 149 products.

I’m like, “So many people want it, but nobody who is trying to buy it has any money!” And I realized we had the wrong audience. We need to sell to older people that have a credit line. I looked at the commercial, and we didn’t have any elderly people in the commercial.

This was a product that I thought appealed more to elderly people, but I was showing great abs and young guys in the gym, and it just was disconnecting. Then I flipped the psychology of the sell. I showed elderly people who couldn’t get on the ground sitting in a chair twisting and doing their abs. It went to number-one in the world that year. It was the number-one retail product, and it was sold in over 60 countries around the world all by shifting it to sell to old people versus young people because they had the money. They were the ones that couldn’t get on the floor. Now the young guys liked it, too.

That’s why it probably sold so well, but 75% of my sales were over 40 years old. That was just from changing the pitch.

What are key psychological triggers? 

Michael Casey: There are 600 million products on Amazon. They say that it’s going to be up to a billion within the next two years. Think about that. There are only 30,000 products at Walmart in different categories.

To get to Walmart, you have to be the elite of the elite. Anyone can put anything on Amazon, and that’s why they’re 600 million, but that’s a lot of noise. How do you break through the noise?

That’s the key when you brand something: It’s got to break through the noise.

I think product market fit is what most inventors miss.

Just because you invent something doesn’t mean people want it. So, once you identify product market fit and you find out that there’s an actual customer for you, you have to tell the customer right out of the gate what’s in it for them. Don’t tell them how pretty it is and how you painted it red; it’s got non-chip resistant, and it’s going to last.

What’s it going to do for me?

Maybe some of those claims will help somebody think it’s going to help them, but if you don’t get right to the point and you only have this, this has gotten so crazy. Our attention spans, because of social media, have been destroyed. You have three seconds, and they say some of the experts who have met us say that might even be dropping down to two to one and a half.

You have three seconds to get somebody’s attention and six seconds to get them to click on your ad before they’re gone. So you have to, in three seconds, become a wizard at marketing to tell somebody what it’s going to do for you. And if you have a demonstrable product that shows that immediately you’re more likely to get traffic to wherever you’re sending them to. And that’s a whole another thing where you send them. If they come back right away, Meta will punish you because they think you tricked them. But product-market fit to go back to your original question and telling somebody what it does for them immediately is how you break through the noise.

I’d love your take on how you’ve seen social media change, how consumers discover how they decide to purchase products, and how product developers, businesses, retailers, and marketers need to adapt to today’s social media environment.

Michael Casey: It was amazing how late these guys were to the party like Walmart. Very late. They have 6 percent of online sales. Amazon has almost 40%. And if that doesn’t tell you that you missed the boat, nothing will. The numbers don’t lie. They’re both 600-700 million annual sales companies, but one guy’s got 37 percent of the online business. And the other guy is almost not even showing up.

To prevent that from happening to your brand, you have to be so far ahead and willing to lose money on trying new things. Like TikTok Shop now, they closed that down. But it’s a trillion-dollar company. There’s no way it was going to stay closed. But people who aren’t on TikTok or the TikTok shop have missed the boat already.

People who weren’t on Instagram with Reels and were just staying on Facebook missed the boat. And then originally when it came out, you could put a picture of something, and someone would click on it. Try doing that now. You’re going to get about out of a thousand people that come by and see a photo. You might get two or three. If you put a video. You might get 30 or 40. If you put a what you could do for me video and do it well, you might get, maybe 60 or 70, which is a really good percentage click. But it’s changed, when I started, it was retail, then it was mail order, then it was infomercial, then it was a little bit of social media.

Try to find an infomercial on TV now. You can’t because they’re all healthcare; they’re all selling to the 70 and 80-year-olds that are watching TV. Everybody else is on Instagram and TikTok and maybe something else is coming.

There’s this other site that everyone’s moving to called REDtone. We’ll see, but I have to be flexible. I tell brands they have to be everywhere. And when you find out what’s working best, that’s when you turn the volume up, and you don’t have to spend a lot of money to test. That’s the beauty of digital. You can pull it off in five seconds.

What specific elements do you consider?

Michael Casey: One of the biggest things, and when people come to me, I have a company, Michael Casey Innovations, that takes a product idea and makes it from a consumer to something you can put in front of the sharks. That’s the goal. (And then that’s a plug. My other plug is Inventors Pathway, where I teach you how to do it yourself on my e-course on the Kajabi platform.)

But what I tell people—and what I do myself when I create something—is I make sure that it’s a real problem. Because you have to do problem/solution.

That’s what society wants. They want to fix whatever’s bothering them. They want a better mop. They want to wash your clothes better. They want a car that does this better, that better—but you cannot create a fake problem.

Inventors have an idea that they need to fix something in their life that’s a problem for them, but it’s not a problem for a lot of people. They force it on the market and invest a lot of money. They say, “Hey, look, this used to be the way it worked, but this is better now.” And a lot of people are like, “Yeah, that doesn’t really bother me.”

I had this cousin. He said, “I want to do a Showster.” I’m like, “What’s a Showster?” He said, “It’s a toaster you could see inside.” So it’s a window so you could tell when it’s done. And I’m like, “Do I have a problem with toast?” I burn it sometimes, but you just turn it down. So I didn’t do it. I told him I was not going to invest in it, and I don’t want [him] to invest in it. He didn’t do it either.

Now, 10 years later, there’s a Showster. It’s not called that, but it’s a window toaster. It didn’t do well. And I told him, “People in the morning when they’re going to work or getting ready for work don’t want to watch their toast cook.”

You’re creating a problem that might be a problem for some, but it’s not a problem for many. So the solution you’re creating isn’t going to sell.

So many people bring me ideas. I probably look at 30 to 50 ideas a month, and that’s not even advertising that’s just B2B and leads from people who know me from the industry and 29 of them are solutions to no problems.

Just because you invent something doesn’t mean there’s a market for it. And so that’s probably my biggest thing to talk people out of bringing a product to market because it doesn’t solve the problem.

Learn more retail psychology insights, strategies, and wisdom from our experts in every episode of Social Pulse: Retail Edition.

How do you or your clients measure the impact that social media has?

Michael Casey: Well, there are two things you could do.

You could just drive sales directly to your e-commerce platform or Amazon, and there are attribution links. You could put on your ads with tags so that you could find out exactly what that ad’s doing. And I tell everybody, you know, A/B test everything. A, B, C, D, E, F. Keep trying different variations and find out what works, and spend 50 on 10 different messages, and that 500 will tell you, “All right, this one’s working,” and it doesn’t lie.

If you’re just on e-commerce and you’re not at retail, it’s very hard to measure your sales on an ad if you’re at Walmart. After all, you don’t know if they’re going to Walmart to buy from your ad or if they saw it some more at someone’s house or something.

But if you’re just on digital, I try to two to one to three to one for every dollar I spend, I need to do two to three dollars in sales to cover my costs and break even. Anything above a 2.5 to 3 to 1, it’s typically profitable. If the manufacturing cost of your product is, it should be four times your retail price for you to run a profitable media campaign on digital. So a 10 product has to be 39-95. If it’s less, you’re going to be tripping over, nickels at the end and figure out, one wrong turn and you lost all your money. When you have four-time margins, you can make a few mistakes. You still got seven or eight, 6 left over. And maybe it’s four instead of seven, but you still made four bucks.

Your media efficiency ratio is very important. And when we used to run television, You know if you spent a thousand dollars on Discovery on Saturday morning, I had a captive audience. There were no iPads, there was nothing. People were just sitting there staring at the TV. If you did a thousand dollar buy, you needed four thousand in sales to cover all your costs same thing transferred to Meta and when you’re on Instagram, but how fast are people flying by so you have to have some messaging that gets them to at least pay attention for three seconds And then at the sixth second, you’ll get them into your platform.

What tools and technologies do you use to track consumer behavior, product performance, and retail psychology environments?

Michael Casey: Oh, there’s so many it’s crazy.

• Jungle Scout. All these guys will tell you who’s bidding on keywords at Amazon. The keyword battle right now is crazy, right? And then you have all these AI platforms telling you what keywords to use. So everybody’s doing the same thing, and then the bidding just gets higher and higher. Google is just tremendously profitable from this battle, but I use a lot of attribution links.
• I use URL Genius and Google Analytics. If you dive deep into Google Analytics and you become good at it, there are so many screens that I spend the majority of my time online looking at analytic screens.
• Every day, I’m looking at a different screen. Meta has so many screens. Google has so many screens. Then you bring in URL Genius and you bring in Jungle Scout. There are so many different [analytics] people are monitoring: where your customer went, where they came from, where they think they’re going to go, how we go visit them tomorrow.
• So then you put your computer off and you think, “I’m done. I could take a break.” But guess what? All the apps, every single one of these companies has turned in on the app. So now I have these screens on my phone, and it’s tempting not to look and see how this ad is performing. You could turn everything with a button on and off. That’s the beauty.
• I’ll be on the golf course, and I’ll be running an ad for $500 on Meta, and I’ll see that it’s doing well because I’ll get a Shopify or on my retail platform. I’ll get something that says, “Boom!” every time you get a sale. You hear a cash register thing on your phone, and you can go back to Meta and turn the volume up. So I went from $500 to $600 in ad spend or $700.

But one of the things—and this is when you get into advertising classes—you’ll learn with Meta. If you turn up the spend too much, Zuckerberg thinks, “Wow, you’re making too much money. I’m going to slow you down and charge you more for your media because I charged you too little. I shouldn’t have charged you $500. I should have charged you a thousand for that media.”

The minute you let Meta’s algorithm know that your ad’s working, it starts to not work.

You have to sneak your way up to an ad spend. I know some of the bigger agencies know this. You spend $500, so I’ll go to $530 and then three days later, I’ll go to $560. Now I want to be spending a thousand, but I can’t do that. I have to sneak my way to it. You got to trick the algorithm that we’re not doing that great. We’re going to keep increasing and see if we can get better. And then you get to a thousand and then three, four, or five weeks later, you’re at $2,000 a day in ad spend. Eventually, Zuckerberg is going to catch up to you, and your ads are going to start tanking because what they don’t want is Instagram, Facebook, Threads, and WhatsApp. They don’t want it to look like a retail store. It still has to have your dog, your kids, your daughter’s kids. It’s got to have all that.

That’s why you can’t spend a hundred thousand dollars a day on the Super Mop 3000 because it’s not going to let you.

But as much as you can spend when you find the perfect spend versus return on investment, your return on ad spend, they call it ROAS on Amazon—ROAS. When you find that perfect combo, you just leave it alone, and you just let it go and you let it ride.

What common retail psychology barriers get overlooked?

Michael Casey: They should honestly talk to their customers and find out where they need to go.
It used to be a monologue. It was like the Tonight Show. I’d come out, tell you what I got and you couldn’t do anything about it. So it used to be a monologue. Now it’s a dialogue. So instead of me saying hey, this is what I have. And wondering if you like it or not social media arrived.

You could tell me immediately what you think of it. So I think what retail psychology brands need to know is to listen to their customers more and not so much the retailers, who don’t communicate that much with the customers, believe it or not. They’ll just tell you it’s sold or why it didn’t sell or where they positioned it.

You don’t have any of that information. You don’t know, but you do on digital. So talking to your customers and opening up these dialogues using the survey platforms—there are so many out there to find out the review systems on Amazon. If you look at the review systems, a lot of companies now are developing products based on the reviews of other products.

So if you have the Super Mop 3000, which is a product that one of my buddies invented back in the day. I use it in my course as a placeholder example. Do people like it? What don’t they like about it? He said you can go on Amazon and find out what people don’t like in the reviews about the number one mop and you could take the what-they-don’t-like part and you could include it in your new mop. You might end up being above that product because of that.

So there’s so much information just by looking at the one-star reviews. That could fix what’s wrong with a lot of these brands and the guys who are developing new products based on the one-star reviews.

It’s an amazing concept because you’re getting what people want right out of the gate.

What resources or thought leaders do you follow for retail psychology?

Michael Casey: There are so many.

• There are a couple of guys that I’m dear friends with that we started in the infomercial business with that have sold their brands. One, for instance, sold it for 900 million. Another buddy sold the Emeril Lagasse cookware line for four or five hundred. The 900 million was flawless, which is a small little look like a lipstick tube from Walgreen CBS. But it’s actually a woman’s shaver, a small little thin, and 36 months from the ground up sold it for 930 million to the public company Church and Dwight.
• I listen to these guys. We have a common theme that it’s got to be a big category. In my TED talk, I tell people that if 25 million people aren’t using it a couple of times a week. You could still do it, but you gotta lower your expectations. The bigger the pond you’re fishing in, the more fish you gonna catch is what it comes down to.
• I talked to my buddies who sold their companies for a lot of money, and they tell me celebrity influence as a tremendous part of it, but value and product value were very important, but the category had to be big, and the cookware category, the air fryer category—those are massive categories.

If you score in a massive category, you’re going to have an exit.

What I find is that retailers want brands. They don’t want one-offs. Back in the nineties and the eighties, you can have one-hit wonders, just like an album. The bands that have the biggest hits albums are a lot of the Beatles are around forever.

That’s what you want. You want to build brands. So when we look at products now, if it doesn’t have a line extension, we might not want to do it. I developed a cosmetic line that I sold called Pure Minerals. And the reason I did it was because people were buying my ab machines. And that’s it.

You’re not going to buy another one. It doesn’t wear off. It’s metal. So I wanted to know, how do I fill up a little bottle every month and ship it to your house? I saw Bare Minerals, a billion-dollar cosmetic company, just rocketing through the roof. I was actually in the green room at QVC watching them live on air selling and they have in the green room at QVC, and they have screens where you could see how many callers are on the line and how many orders have come in.

The screens were all off the TV. They were above the chart. So I’m like, what is in those jars? I have to figure that out. I went back to the drawing board two years later and developed my own line. Bought some patents, hired some estheticians to help me develop it, and figured out the same method of branding that I use for my fitness products, which I’ll use for my cosmetics, problem solution.

I came out with fitness for your face, pure minerals, And it was healthy and it didn’t, non-comedogenic, it didn’t expire because it was just micronized pure color. It was a Cleopatra war that brought down, an empire. So I’m like, okay, that’s how I’m going to market. And that’s what I did.

I ended up selling it today. It’s a billion-dollar company. It’s been around for about 24 years now. I started in 2000. And so you want line extensions. You want something that you could actually either grow the sales through that or sell the brand and the brand on my buddy at Idea Village, Andy Cabani, who sold one product under the name Flawless.

They had some line extensions for 900 million, 600 million of that was the brand, was the flawless brand. Some of it was tied to sales like two or three times sales. He was at 160 million in sales when they bought him but to get 900 that’s the brand so that’s a long answer, but line extensions and building a brand is where product companies are looking to go, I believe right now.

Thanks for reading the highlights from this episode about retail psychology. Don’t forget to find the Social Pulse Podcast: Retail Edition on Apple or Spotify, where we’re digging into the challenges, successes, and stories of social media and community professionals in the industry, just like you.