Google Eyes: Watch While You Shop

The Washington Post: “Google executives say they are using complex, patent-pending mathematical formulas to protect the privacy of consumers when they match a Google user with a shopper who makes a purchase in a brick-and-mortar store. The mathematical formulas convert people’s names and other personal information into anonymous strings of numbers.”

“The formulas make it impossible for Google to know the identity of the real-world shoppers, and for the retailers to know the identities of Google’s users, Google executives said. The companies know only that a match has been made. In addition, Google does not get a detailed description of the individual transactions, just the amount spent.”

“Google would not say how merchants had obtained consent from consumers to pass along their credit card information. In the past, both Google and Facebook have obtained purchase data for a more limited set of consumers who participate in loyalty programs. Consumers that participate in loyalty programs are more heavily tracked by retailers, and often give consent to share their data with third parties as a condition of signing up. (Not all consumers may realize they have given such consent, according to the digital privacy advocacy group Electronic Frontier Foundation).”

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Michael Ruhlman & The American Grocery

The Wall Street Journal: “Is there any place more American than the supermarket? Forget the airport and the voting booth; for nearly a century, the one-stop shop has remained a temple of consumerism, not to mention our particular form of consumerist anxiety … In Grocery: The Buying and Selling of Food in America” Michael Ruhlman focuses on “his beloved hometown supermarket, Heinen’s Grocery Store, a Cleveland-based chain with 23 locations in Ohio and Illinois. Joe Heinen opened the first one in 1933, three years after Michael Cullen launched ‘the first true supermarket,’ in Mr. Ruhlman’s designation: King Kullen in Queens, N.Y. Heinen, like Cullen, stockpiled meat, seafood, dairy, produce and groceries, often at a discount, under a single roof. (King Kullen’s slogan was ‘Pile it high. Sell it low.’)”

“There are now 38,000 grocery stores in America, some as large as 90,000 square feet. Heinen’s has annual sales of some $600 million—on a margin of only 1.25% to 1.5%, typical of the industry. ‘You do sales of half a billion dollars,’ a Heinen’s executive notes to Mr. Ruhlman, “and you only have profit of $5 million—what kind of a business is that?'”

Now the best grocery stores compete in a crowded marketplace by combining all of the above while becoming obligatory shopping, and even tourist, destinations. Wegmans, an East Coast chain frequently named America’s top grocery, and Central Market, an upscale offshoot of Texas’ H-E-B … have generated the kind of fervent fan bases once limited to sports franchises.” However: “Jeff Heinen fears that the supermarket will eventually go the way of the suburban shopping mall. ‘We’ll be prepared food and specialty products,’ he tells Mr. Ruhlman. Everything else, all those center-aisle products, in his estimation, will be delivered via Amazon.”

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Intuition, Math & The Supermarket Checkout

The Wall Street Journal: “We are used to the standard system of one line for each cashier. But what if there is just one big lane feeding multiple cashiers? … The single queue often snakes around, as lines do at airport security checkpoints. Mathematical queuing theory says that the serpentine system should be faster than separate lines leading to separate cash registers, but only with a condition called ‘no jockeying’—the assumption that people in multiple lines won’t hop over to a different line that has become free.”

“But that isn’t realistic, as we can all attest. If you allow jockeying in multiple lines, the serpentine system is no faster on average. It might intuitively seem faster because you won’t get stuck behind a single person taking a long time, but that same delay is just portioned out among more people, leaving the average wait time the same … In a curious twist, one recent study showed that cashiers work faster when they are serving a dedicated line. Perhaps it instills a sense of pride or connection with the customers waiting for one hardworking cashier.”

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Of Puppuccinos & Peanut Butter Bacon Burgers

The Wall Street Journal: “For some restaurant customers, the hottest items to order aren’t on the menu. In recent years, so-called secret menus have cropped up on social media and attracted a cult following. Devotees proudly photograph their McDonald’s Chicken Cordon Bleu McMuffins, Chipotle Quesaritos (a quesadilla-wrapped burrito) and Shake Shack Peanut Butter Bacon Burgers. Fans debate recipes and discuss how to order tricky items without provoking the ire of harried restaurant staff.”

“Some restaurants, like McDonald’s, deny the existence of such menus, although others say their staff will customize orders. Some establishments actually embrace the concept. Many creations are suggested and named by consumers, who detail online what ingredients to request. Sometimes, people put them together on their own.”

“Occasionally, secret menus aren’t limited to restaurants’ human clientele. Last year, Ricky Wolfe and his then-girlfriend, with dog Wally in tow, drove through a Starbucks in College Park, Md. She ordered a coffee and a Puppuccino. The barista, no questions asked, handed over a tiny cup filled with whipped cream. Mr. Wolfe, 28, was incredulous. Wally, a shepherd-hound mix, was apprehensive until her tongue met the whipped cream.”

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The Stitch Fix Secret: Make Shopping Easy

The New York Times: Stitch Fix is a mail-order clothing service that offers customers little choice in what garments they receive, and shies away from discounts for brand name dresses, pants and accessories. Despite a business model that seems to defy conventional wisdom, Stitch Fix continues to grow … To the company’s founder, Katrina Lake, success comes down to delivering what consumers want: making it easier to shop … In her view, what was important was helping customers find clothing they liked without taking lengthy shopping trips and returning dozens of items.”

“At the company’s warehouse, Eric Colson, formerly a top data scientist at Netflix, spoke to the role that data science — once the province of high-tech giants — plays in nearly every aspect of the Stitch Fix business. Mr. Colson excitedly illustrated on whiteboards how the company’s systems can narrow down a broad range of women’s pants to a relative few that each individual customer is statistically likely to keep … Algorithms have even cut the number of steps needed for workers to pick out clothes for individual clients.”

“Yet the question remains whether customers who are initially thrilled by receiving a customized box of clothing will remain customers for months or even years … Stitch Fix executives declined to share their retention statistics, but claim that they are above industry averages.”

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Artists & Fleas: The New Retail Acrobats

The Wall Street Journal: “These are tough times for brick-and-mortar retail. Stores are closing locations at a record pace, while chains including the Limited and American Apparel are going belly-up. New York City’s flea markets, holiday markets, farmers markets, night bazaars and art fairs, however, continue to draw big crowds. If it’s sold from a stall or a folding table, it seems, shoppers can’t get enough of it.”

“Artists & Fleas … is opening a new, 5,000 square-foot market on Friday at the prime retail intersection of Prince Street and Broadway in SoHo, the former home of an Armani Exchange. Co-founders Ronen Glimer and Amy Abrams say artisan markets are thriving because shoppers are hungry for unique goods, not to mention connection. They choose their merchants based not just on their wares, but personality. A key question: ‘Is this a fun person?’ On peak days, their Chelsea location attracts up to 10,000 shoppers. That in turn draws merchants willing to pay $65,000 a year for a 50-square-foot booth.”

Cynthia Rybakoff, a jewelry maker, comments: “We might as well be baleen whales scooping up krill. We don’t have to work that hard to bring people in … There is no advantage to having a storefront other than vanity.”

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Shopping-Cart Psychology: To Return or Not?

Scientific American: “It seems like a basic courtesy to others: you get a cart at the supermarket, you use it to get your groceries and bring them to your vehicle, and then you return it for others to use. And yet, it’s not uncommon for many people to ignore the cart receptacle entirely and leave their carts next to their cars or parked haphazardly on medians. During peak hours, it can mean bedlam. Where does this disregard come from?”

“Social norms fall into two general categories. There are injunctive norms, which drive our responses based on our perception of how others will interpret our actions. This means that we’re inclined to act in certain ways if we think people will think well or think poorly of us. And there are descriptive norms, where our responses are driven by contextual clues. This means we’re apt to mimic behaviors of others—so what we see or hear or smell suggests the appropriate/accepted response or behavior that we should display.”

“The world will likely not end because we aren’t returning our shopping carts—that would be an amazing butterfly effect—but it’s an example of a quality of life issue we can control. That guy who didn’t return his cart may not be a complete jerk. He may just be using the example set by others so he can get home a little more quickly. But if everyone does that, then we’re shifting the balance of what is acceptable, which may have greater ramifications to the social order. We have a greater influence over seemingly mundane situations than we realize.”

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IKEA Asks: Do You Speak Human?

The Verge: ‘If you put an AI in charge of your house — letting it control the lights, the alarms, the temperature, and so on — how would you want it to act? Should it be ‘autonomous and challenging’ or ‘obedient and assisting’? Would you prefer if it sounded male, female, or if it was gender neutral? Should it be religious? These are just some of the questions Ikea is asking its customers in a new survey titled: Do you speak human?”

“With this new survey, Ikea is focused on computer personality, looking to find out what sort of AI people would be happiest to interact with. This is a question that preoccupies the big tech companies, too — that’s why they’re hiring novelists and comedians to finesse the personality of their digital assistants.”

“Ikea is updating the results of the survey as it goes; so far it’s saying that 41 percent of people want their AI to be ‘obedient and assisting,’ 42 percent want it to be ‘gender neutral’ (as opposed to 35 percent for male, 24 percent for female), and 87 percent say they want their AI to ‘detect and react to emotions.’ There’s bound to be some self-selecting bias at work here, as the people who answer this survey are more likely to be interested in technology in general, but it’s still a very intriguing project.”

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Insight Alert: Yes You Are Being Watched

Erica J. Boothby: “Most of the time, when you’re minding your own business and feeling relatively inconspicuous, you’re being watched much more than you realize. My colleagues and I demonstrated this in several studies … Although people surreptitiously noticed all kinds of details about each other — clothing, personality, mood — we found that people were convinced that the other person wasn’t watching them much, if at all.”

“So other people notice our coffee stains less than we think, but they watch us in general more than we think. The problem, in both cases, is that we project the focus of our attention onto others. Because we’re fixated on our coffee stain (or whatever we happen to be self-conscious about), we assume others must be, too. But when nothing in particular draws our attention to ourselves, we neglect the fact that we may nevertheless be an object of other people’s interest.”

“Assuming other people are focused on the same thing we are is at the root of many kinds of miscommunication … We all have a tendency to egocentrically ascribe our own perspective to others. That doesn’t make us selfish or bad. But it’s worth keeping in mind that everyone’s attention illuminates the world in a particular way, and what gets spotlighted differs from person to person.”

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