Relativity is a Poor Theory at Retail

The New York Times: “In some ways, what we experience as consumers is like what we experience when we listen to music or lift a heavy object. For example, we are more likely to notice that a drumbeat is loud if we have been listening to, say, a gentle violin. And we will notice that we are lifting extra pounds if they are added to a lightly packed suitcase. The same additional weight is barely noticeable in a heavy one. Vision, heat perception, smell and taste all obey a similar law: Perception is largely a relative mechanism.”

This dynamic manifests itself when we compare prices: “We tend to focus on the percentage rather than the amount we save, and fall prey to a mental illusion. After all, when your shopping is done, it is dollars — not percentages — that will be in your bank account … Ofer H. Azar, an economist at Ben-Gurion University in Israel, asked consumers in the United States how much they needed to save to justify spending an extra 20 minutes … When shopping for a $10 pen, they required only a $3.75 savings, on average. For a $30,000 car, though, they needed $277.83 for that 20 minutes.”

Less affluent shoppers are less likely to fall prey to the illusion: “Poorer people tend to value a dollar more consistently, irrespective of the context. It is not simply that those with less money pinch more pennies; it is that they are compelled to value those pennies in absolute rather than relative terms … To them, a dollar has real tangible value. A dollar saved is a dollar to be spent elsewhere, not merely a piece of token accounting.”

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Quote of the Day: Ildiko Szalai

“Traditionally, men’s path to purchase has been more linear than women’s, adopting a more utilitarian approach, considering all options rationally and weighing up alternatives based on price and quality. As men become more concerned about how they look, what they wear and products they use, their decision-making is beginning to imitate women’s.” ~ Ildiko Szalai, senior analyst of Beauty and Personal Care, Euromonitor, quoted in The Wall Street Journal.

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The Fallacy of Data vs. Intuition

In a Wall Street Journal interview, Hilary Mason of Fast Forward Labs illuminates the relationship between data and intuition:

“One of the common fallacies is that data is opposed to intuition. Data is a tool for enhancing intuition. When I worked at the social-media company, one day the CMO of a frozen-breakfast-sausage brand came into our office. The guy said, ‘I want to know what may customers do on the social web.’ And I said, ‘Great. So first we’ll figure out who your customers are.’ He said, ‘I know who my customers are. They’re moms in the Midwest.’ I said, ‘How do you know?’ He looked at me like I was crazy. He said, ‘They’re my customers. I’ve been doing this for years.'”

“He was not wrong. He had many customers. We didn’t know if they were moms, but they were looking at mom-type things. They were in the Midwest. But he missed a cluster of customers in Texas, and they were into motorcycles and man things. He missed a cluster in the Northwest who were anti food additives [who liked his product because it] did not have these additives. We were able to show that his intuition was in no way wrong. But he was missing things that were too small to come up on his human radar.”

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Less is More: Soda Pops as a “Cheap Treat”

The Wall Street Journal: “In some ways, the soda industry is returning to its early 20th century roots, when bottles were typically about 6 ounces and pop was a treat saved for a special occasion. It wasn’t until 1976 that 7-Eleven Inc. launched the 32-ounce Big Gulp at its convenience stores.”

“Now, once again, American soda drinkers ‘want to consume less but they still enjoy their favorite brands,’ said Marty Ellen, Dr Pepper’s chief financial officer. Dr Pepper is rolling out 7.5-ounce cans nationally this year, replacing 8-ounce cans it launched as an alternative to 12-ounce cans. Each 7.5-ounce can holds about 95 calories, compared with 150 calories for a 12-ounce can.”

This works out well for soda companies, which have stemmed losses by charging more for less: “At a Publix supermarket in Atlanta recently, a 12-pack of 12-ounce Coke cans was priced at $5.29, or 3.67 cents per ounce. An 8-pack of 7.5-ounce cans was priced at $3.99, or 6.65 cents per ounce.”

Mr. Ellen says the higher cost per-ounce aligns with consumer behavior because soda is still a “cheap treat.”

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Loyalty & The Late Adopter

Those who are slower to adopt new products or services tend to be more loyal to their choices, reports The Wall Street Journal.

Typically, a late adopter is “a person who buys a product or service after half of a population has done so. Late adopters tend to share certain characteristics: They are skeptical of marketing and tend to point out differences between advertised claims and the actual product. They often value a product’s core attributes, ignoring the bells and whistles intended to upsell the latest model. They may not try something new until weeks, months or even years after the crowd has moved on.”

“It takes a long time to change late adopters, but once they’ve done all that research, and once they are convinced about a product, they are going to stay for a long time,” says Sara Jahanmir of the Nova School of Business and Economics in Lisbon.

Late adopters are also believed to have “important things to tell companies about the role new products should play. Because they tend to be highly critical, late adopters can be useful to companies perfecting their wares … By listening to late adopters of the old version of a product, developers can create a new version that is quicker to be adopted.”

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Co-Creation Is The New Museology

Hyperallergic: “In plain terms, across the field, in museums, art institutions, performance forums, and even historical societies, the visitor’s experience is now being personalized. This means that not only is the visit marked by enhanced, interactive, and ‘dialogic’ engagement, but also there is an institutional recognition of the visitor as an independent maker of meaning who uses the museum in a variety of ways to fulfill particular, individual needs and desires.”

“Three key means of accomplishing this is first, recognizing visitors’ capacity to make meaning for themselves; two, partnering with them to discover what they personally want from the museum; and lastly, mobilizing the museum’s resources to meet these needs. These tasks can be met by, among other things, new curatorial strategies through which museums partner with visitors to develop activities and events: co-curation projects, and crowdsourcing exhibition content.”

“Visitors are no longer passive receptacles for the curator’s knowledge, but rather active, engaged participants.”

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Madison Avenue & Modern Medicine

From a New York Times review of Remaking The American Patient by Nancy Tomes: “Patients actually morphed into consumers long before health insurance and the Internet were invented, even before the turn of the 20th century … It was back in the 1920s that doctors’ offices first loaded up with machinery in order to impress patients with ‘new and improved’ medical care.”

“The first timesaving questionnaire for patients to complete in the waiting room was introduced in 1949 … Drugs have been enthusiastically hawked from the dawn of advertising. In fact, the drug industry pioneered the use of many of the most aggressive tools, like national ad campaigns, direct-mail ads, product placements and infomercials … Doctors were already complaining in the 1920s that patients just wanted drugs, not good advice. In the 1950s, the American Medical Association warned that doctors should learn to negotiate with a pickier generation of consumers.”

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Why Aren’t Wearables Well Worn?

In The New York Times, Nick Bilton offers several reasons why so much wearable technology has not worn so well. “First, almost all of them require a smartphone to be fully operational … a wearable becomes yet another gadget that we need to lug around. There’s also the fact that most of these devices are quite ugly … Then there’s the unpleasant fact that the technology just doesn’t seem ready … But the biggest issue may be the price … consumers just can’t justify buying a smartwatch that costs nearly as much as a smartphone.”

Geoffrey A. Fowler, writing in The Wall Street Journal, meanwhile extols the virtues of the Mio, which uses a metric called Personal Activity Intelligence (PAI), which tracks heart patterns rather than foot movement. “Mio’s hardware isn’t as elegant as others on the market, but PAI is the best example yet of how wearables can turn data into tailored, actionable advice, and hopefully longer lives,” Geoffrey writes.

“Unlike step counting, where you start over each morning at zero, PAI runs on a rolling weekly tally … Everyone’s PAI is a little different, by design. The formula takes into account your age, gender, resting heart rate, max heart rate and other unique signals. It’s personal Big Data,” Geoffrey writes.

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He Ain’t Heavy, He’s My Waiter

The Wall Street Journal: “In a new study … researchers wanted to find out whether a restaurant server’s body-mass index … influenced what diners chose to consume. Trained students working on the research team observed 497 interactions among diners and servers in 60 casual American full-service restaurants, such as Applebee’s. In each case, the observers estimated whether the server and the diners had a BMI of more or less than 25, the standard cutoff for being overweight. The result: ‘If you have a heavy server … you order more’.”

“What accounts for this finding? The scientists can only speculate” but suggest that “diners with a heavier server felt freer to order more fattening items.”

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Americans Are Loving Bowls

“Sales of bowls are rising as Americans prefer more casual, one-course meals that layer flavors,” The Wall Street Journal reports. Tableware makers are reconfiguring place settings. Restaurants are overhauling their china cabinets. Consumers are increasingly cradling their food while perched at kitchen islands, lounging on sofas or multi-tasking at a table.”

“The trend began as a way to make healthy entrees more appealing. If eggs and vegetables are piled into a bowl rather than on a plate, the diner is less likely to mourn the missing bread.” Juliet Boghossian of Foodology comments: “You’re taking away all the carbs, like toast, muffins and potatoes, but you don’t see the empty space on the plate.” Designer Ree Drummond adds: “A bowl is much more flexible and open to interpretation compared to a plate.”

Rebecca Proctor of Aurora Brands says: “The rise of the bowl is really evidence of the shift in our lifestyle from more formal to casual.”

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