Monthly Archives: June 2012

Retail and Freemium

Retail and Freemium

I’ve been wondering whether freemium game design could benefit from the science of retail merchandising. After all, freemium games are dependent on in-app purchases just as retail stores are dependent on in-store purchases. And retailers have already spent decades researching how best to motivate buyers and promote purchases.

I looked into retail store design and visual merchandising (VM), and found some lessons that could be applied to freemium games.

Customer Traffic
Retail stores have an initial advantage in attracting window shoppers passing by, but once the customer steps through the door the dynamics of e-tail and retail spaces converge.

Strategies to stimulate purchases can be surprisingly similar in both worlds. Key lessons about generating retail customer traffic can be applied to freemium games.

One lesson is that retailers have discovered that the more commitment customers make entering the space, the more willing they’ll be to linger and buy. That’s why some brick and mortar stores install revolving doors: increasing the effort to enter establishes a greater commitment. Visual cues can also be used to give the illusion of a commitment, such as recessed or arched entrances. These features give customers a sense of transition from one space to another in the hope that they will stay longer in this new environment.

Freemium developers can use this method in their games to better transition users into the game space. For example, ashort opening sequence showing movement into the game space may create that same sense of commitment into the game and thereby increase user retention for that session.

Sales staff
One function of sales personnel is to establish themselves as an authority. This builds customers’ trust and confidence so they feel more inclined to buy and more conent with their purchase. Freemium games can create a virtual sales person in the form of an in-game character who can introduce the game and its mechanics as well as offer advice on purchases and even up-sell. Of course, the character should be not only authoritative but likable too, not hovering, annoying and intrusive. No one want to end up with another Clippy.

Merchandise
Retail stores will sometimes differentiate themselves by offering exclusive brand names. Brands, in turn, provide the shopper with a sense of trust similar to that of a sales person. Using brand names in a freemium game could be difficult if not impossible (Ralph Lauren grenades?), but freemium game developers can still create their own brand names within the game world itself. Instead of giving a power-up a generic name, one could brand it. This in turn can breed familiarity and might even be used across other games.

Layout
Much literature in VM is devoted to the arrangement of the retail space. Pools of light can highlight merchandise, store fixtures and displays are moved around to keep the space fresh, lounges provide customers with a space to take a break from shopping. While changing an in-app store is probably bad user interface design, freemium game designers may consider creating an area where the player can take a break from the main game. This has the benefit of giving the player a rest but still keeping them in the game. With more freemium games going social, this area could be a chat area or just a fun virtual place to interact with friends.

Pricing
Retailers tend to prefer a tiered pricing approach where prices increase for overall quality of products. There is not much room to vary prices for value or mid-level quality items; the margins are much more flexible for high-end items. Freemium developers may want to mimic this model by making sure basic premium content is priced competitively but allow themselves to charge more for highly desired items.