Tag Archives: shopping

The Licensing Effect and the Unhealthy Habit of Vitamin Supplements

The licens­ing effect is the phe­nomen­on whereby pos­it­ive actions or decisions taken now increase neg­at­ive or uneth­ic­al decisions taken later. I’ve writ­ten about this pre­vi­ously, before I was aware of a gen­er­al effect:

A Taiwanese study has provided us with a new instance of the licens­ing effect in action, this time with vit­am­in sup­ple­ments. The study found that tak­ing vit­am­in pills or diet­ary sup­ple­ments for health pro­tec­tion increases unhealthy and risky beha­viour.

After­wards, com­pared with placebo par­ti­cipants, the par­ti­cipants who thought they’d taken a vit­am­in pill rated indul­gent but harm­ful activ­it­ies like cas­u­al sex and excess­ive drink­ing as more desir­able; healthy activ­it­ies like yoga as less desir­able; and they were more likely to choose a free coupon for a buf­fet meal, as opposed to a free coupon for a healthy organ­ic meal (these asso­ci­ations held even after con­trolling for par­ti­cipants’ usu­al intake of vit­am­in pills). […]

The vit­am­in-takers also felt more invul­ner­able than the placebo par­ti­cipants, as revealed by their agree­ment with state­ments like “Noth­ing can harm me”. Fur­ther ana­lys­is sug­ges­ted that it was these feel­ings of invul­ner­ab­il­ity that medi­ated the asso­ci­ation between tak­ing a pos­tu­lated vit­am­in pill and the unhealthy atti­tudes and decisions.

Busi­nes­s­Week also points out that this loop of bene­vol­ent and self-indul­gent beha­viour is plainly evid­ent in the shop­ping habits of con­sumers… some­thing that mar­keters know all about.

via @vaughanbell

Dark Patterns for Marketers, or: Practical Behavioural Economics

Tak­ing a sys­tem­at­ic approach to imple­ment­ing find­ings from beha­vi­our­al eco­nom­ics into a sales cycle can “unlock sig­ni­fic­ant value”, accord­ing to McKinsey’s Ned Welch. To help busi­ness do exactly that, Welch–in what, at times, reads a bit like a ‘dark pat­terns guide for marketers’–has writ­ten an art­icle look­ing at four prac­tic­al tech­niques from beha­vi­our­al eco­nom­ics that mar­keters should use to per­suade pur­chasers. The tech­niques:

  1. Make a product’s cost less pain­ful.
  2. Har­ness the power of a default option.
  3. Don’t over­whelm con­sumers with choice.
  4. Pos­i­tion your pre­ferred option care­fully.

There’s not much new here, but the sum­mar­ies are nice and suc­cinct. From item four, I found this bit of gro­cery store choice archi­tec­ture inter­est­ing:

Anoth­er way to pos­i­tion choices relates not to the products a com­pany offers but to the way it dis­plays them. Our research sug­gests, for instance, that ice cream shop­pers in gro­cery stores look at the brand first, fla­vor second, and price last. Organ­iz­ing super­mar­ket aisles accord­ing to way con­sumers prefer to buy spe­cif­ic products makes cus­tom­ers both hap­pi­er and less likely to base their pur­chase decisions on price—allowing retail­ers to sell high­er-priced, high­er-mar­gin products. (This explains why aisles are rarely organ­ized by price.) For ther­mo­stats, by con­trast, people gen­er­ally start with price, then func­tion, and finally brand. The mer­chand­ise lay­out should there­fore be quite dif­fer­ent.

via Nudge

(If you don’t have a McKin­sey account, you can read the art­icle here or here (PDF).)

Privacy and Tracking with Digital Coupons

Data col­lec­tion and min­ing can be quite luc­rat­ive pur­suits for many retail­ers, and tech­no­lo­gic­al advances are provid­ing them with more nov­el and extens­ive meth­ods of doing just that.

Data min­ing is a top­ic I’ve been fas­cin­ated with ever since I was intro­duced to it in uni­ver­sity, and this look at how digit­al coupons track us and provide retail­ers with detailed data is a worthy addi­tion to my vir­tu­al col­lec­tion:

Inven­ted over a cen­tury ago as anonym­ous pieces of paper that could be traded for dis­counts, coupons have evolved into track­ing devices for com­pan­ies that want to learn more about the habits of their cus­tom­ers. […]

Many of today’s digit­al ver­sions use spe­cial bar codes that are packed with inform­a­tion about the life of the coupon: the dates and times it was obtained, viewed and, ulti­mately, redeemed; the store where it was used; per­haps even the search terms typed to find it.

A grow­ing num­ber of retail­ers are mar­ry­ing this data with inform­a­tion dis­covered online and off, such as guesses about your age, sex and income, your buy­ing his­tory, what Web sites you’ve vis­ited, and your cur­rent loc­a­tion or geo­graph­ic routine – cre­at­ing pro­files of cus­tom­ers that are more detailed than ever, accord­ing to mar­ket­ing com­pan­ies. […]

Many com­pan­ies have the tech­no­logy – and cus­tom­ers’ per­mis­sion, thanks to the pri­vacy policies that users accept routinely without read­ing – to track minute details of people’s move­ments.

I’m mostly fine with this sort of track­ing as it is typ­ic­ally done on a large, imper­son­al level: com­plex algorithms are used to determ­ine when to send what vouch­ers to who, all without dir­ect human inter­ven­tion. The piece ends with a thought that is some­what close to my opin­ion on this par­tic­u­lar pri­vacy debate: “I would be con­cerned […] if they get very gran­u­lar and are track­ing me spe­cific­ally.”

via @Foomandoonian

Prevention of Attainment Increases Desire, Decreases Attractiveness

Being pre­ven­ted from obtain­ing some­thing we desire sim­ul­tan­eously increases our desire for the item and decreases its even­tu­al attract­ive­ness. That’s the coun­ter­in­tu­it­ive res­ult from a study that shows the vari­ous sur­pris­ing effects of “being jilted”.

We show how being “jilted”–that is, being thwarted from obtain­ing a desired outcome–can con­cur­rently increase desire to obtain the out­come, but reduce its actu­al attract­ive­ness. Thus, people can come to both want some­thing more and like it less. […] In Exper­i­ment 1, par­ti­cipants who failed to win a prize were will­ing to pay more for it than those who won it, but were also more likely to trade it away when they ulti­mately obtained it. In Exper­i­ment 2, fail­ure to obtain an expec­ted reward led to increased choice, but also neg­at­ively biased eval­u­ation, of an item that was merely sim­il­ar to that reward.

It seems that by being unavail­able our expect­a­tions are raised to an unreas­on­able degree and we even­tu­ally become dis­ap­poin­ted. I guess this is a warn­ing for those think­ing of scarcity mar­ket­ing.

The Influence of Sold-Out Products

Sold-out products cre­ate “inform­a­tion cas­cades” where we infer that the next-best item must also be of a sim­il­ar high qual­ity and value for money: sold-out items ‘val­id­ate’ sim­il­ar products, per­suad­ing us to pur­chase more read­ily.

“Sold-out products cre­ate a sense of imme­di­acy for cus­tom­ers; they feel that if one product is gone, the next item could also sell out. […] Research shows there’s also an inform­a­tion cas­cade, where people infer that if a product is sold out, it must have been good and there­fore a sim­il­ar avail­able product will also be desir­able.”

The study […] found 61 per cent of shop­pers would buy a par­tic­u­lar five-hour ski pass for $20, but that fig­ure rose to 91 per cent when they thought a 10-hour ski pass for the same moun­tain slope for $40 had sold out.

A sim­il­ar study of mer­lot wines found 49 per cent of con­sumers would buy a bottle if they had one choice, but when they thought a sim­il­ar wine had sold out next to it on the shelf, nearly twice the num­ber of shop­pers would take home the avail­able bottle.

The research­ers note that for com­mon ‘stock’ items a sold-out status breeds con­tempt, where­as new and sold-out products sig­nal an unanti­cip­ated demand for a qual­ity product.

It goes without say­ing that the sold-out items didn’t neces­sar­ily have to exist, right?