2013 Trends

JWT: 100 Things to Watch in 2013 from JWTIntelligence

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2013 Trends

Rewind your 2012

The most trending videos mashup Gangnam style:

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Rewind your 2012

The person inside the present: Narcissists buy to big themselves up

Christmas is around the corner and many of us will be thinking of what to buy our loved ones (or ourselves) this festive holiday

But what is the psychology behind gift-giving?

Early results from research led by Dr Aiden Gregg from the University of Southampton, have shown that people with narcissistic tendencies want to purchase products, both for others and for themselves, that positively distinguish them - that is, that make them stand out from the crowd.

The study - conducted in collaboration with McGill University's Desautels Faculty of Management and Hanyang University in South Korea - investigated why narcissistic consumers chose certain products and how those products made them feel. Volunteers from both the universities in South Korea or Canada took part in one of four studies.

The first study, using online questionnaires, asked participants about their consumer buying behaviour-for example, why they bought certain products and how doing so made them feel. Narcissism, rather than simple self-esteem, predicted dispositions to purchase products for the purpose of promoting personal uniqueness.

In the second study, participants were asked to imagine they had to replace their old MP3 player with an Apple iPod Touch. They had to choose one of the two free bonus options that came with it: either a special, limited edition, leather case, which could be personally engraved, or a generic iTunes gift card.

The third study had three parts. In part one, participants were asked questions about a shirt that could be customized; in part two, they had to think of and describe three personal items they owned; and in part three, they were asked questions about a watch that was described either as exclusive or as run-of-the-mill.

Both the second and third studies found that narcissism predicted greater interest in exclusive, customizable, and personalizable products. The third study also found participants who were higher in narcissism regarded their prized possessions as less likely to be owned by others - that is, as more distinctive.

The final study focused on gifts being bought for another person. Participants were shown the same watch as in the previous study. Narcissists again tended to show more interest in the product when it was portrayed as exclusive. So it looks like narcissists want people around them to be as special as they are. Further analysis also suggested that a motive to manipulate others partly lay behind narcissists' gift-giving preferences.

Dr Aiden Gregg comments: "Narcissists seek to self-enhance. One way to do so is by buying products for symbolic as well as material reasons - for what they mean as well as what they do.

"Our early results show that narcissists' interest in consumer products, whether bought for themselves or for others, is strongly driven by the power of those products to positively distinguish them. Narcissists feel better about themselves because they think they have succeeded in individualising or elevating themselves."

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The person inside the present: Narcissists buy to big themselves up

A better online retail experience

Usher Lieberman: Leveraging Social Data from Piers Fawkes on Vimeo.o

A better online retail experience

Why Do Consumers Prefer Familiar Products?

Consumers are more likely to purchase a product if they have previously focused their attention on it but are less likely to purchase a product they have previously ignored, according to a new study in the Journal of Consumer Research.
“It’s generally assumed that consumers will choose products that provide the greatest value. But prior consideration of a product makes it easier to process the product when it’s encountered later and this influences whether or not consumers like the product, regardless of the benefits it provides. The act of attending to a product increases the likelihood the product will be purchased in the future while not attending to a product decreases the likelihood,” write authors Chris Janiszewski (University of Florida), Andrew Kuo (Louisiana State University), and Nader Tavassoli (London Business School).
In an experiment involving various unfamiliar brands of soda, cheese, shampoo, and chocolate, consumers were asked to locate a specific brand in a display of two competing brands. This was repeated for many pairs of brands, with some serving as “selected brands” and others serving as “neglected brands.” Others appeared by themselves as “neutral brands” that were neither selected nor rejected. When these consumers were later asked to choose between a selected brand and a neutral brand or between a neglected brand and a neutral brand, they preferred the previously selected brand to the neutral brand, but also preferred the neutral brand to the previously neglected brand.
Situations where selective attention to a product might be arbitrary create opportunities for companies to influence consumers and gain long-term advantage by drawing their attention through coupons, banner advertising, or packaging that stands out in a visually complex shopping environment.
“Every time a consumer searches for a product in a shelf display, the immediately adjacent products receive inattention. This will happen more frequently in high turn-over product categories. Thus, the inattention that accompanies the selective attention to frequently purchased products has the potential to influence future consideration of neglected products,” the authors conclude. 

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Why Do Consumers Prefer Familiar Products?

Eating or Spending Too Much? Blame It on Facebook

Participating in online social networks can have a detrimental effect on consumer well-being by lowering self-control among certain users, according to a new study in the Journal of Consumer Research.
“Using online social networks can have a positive effect on self-esteem and well- being. However, these increased feelings of self-worth can have a detrimental effect on behavior. Because consumers care about the image they present to close friends, social network use enhances self-esteem in users who are focused on close friends while browsing their social network. This momentary increase in self-esteem leads them to display less self-control after browsing a social network,” write authors Keith Wilcox (Columbia University) and Andrew T. Stephen (University of Pittsburgh).
Online social networks are having a fundamental impact on society. Facebook, the largest, has over one billion active users. Does using a social network impact the choices consumers make in their daily lives? If so, what effect does it have on consumer well-being?
A series of interesting studies showed that Facebook usage lowers self-control for consumers who focus on close friends while browsing their social network. Specifically, consumers focused on close friends are more likely to choose an unhealthy snack after browsing Facebook due to enhanced self-esteem. Greater Facebook use was associated with a higher body-mass index, increased binge eating, a lower credit score, and higher levels of credit card debt for consumers with many close friends in their social network.
“These results are concerning given the increased time people spend using social networks, as well as the worldwide proliferation of access to social networks anywhere anytime via smartphones and other gadgets. Given that self-control is important for maintaining social order and personal well-being, this subtle effect could have widespread impact. This is particularly true for adolescents and young adults who are the heaviest users of social networks and have grown up using social networks as a normal part of their daily lives,” the authors conclude. 

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Eating or Spending Too Much? Blame It on Facebook

Shoppers are drawn to centrally placed products

Rows of new toys, endless racks of sweaters on clothing store shelves, long lines of books arranged in the bestsellers section at the bookstore. From mall displays to boutique exhibits, long lines of horizontally arranged products are the norm when it comes to the holiday shopping experience. 

But how does a product’s placement on the storeroom shelf influence which one a consumer ultimately chooses? It turns out that the shopper’s eye has a very central focus.  

“Consumers are more likely to purchase products placed in the middle of a display – without even being aware of it,” says Onur Bodur. The associate professor from Concordia’s John Molson School of Business is co-author of a recent study in the Journal of Consumer Research, along with marketing researchers at HEC in France and the Aston Business School in England.

Using eye-tracking devices, Bodur and his colleagues investigated how location influences choices for a variety of products, including cosmetics and food items. 

They found that consumers would increase their visual focus on the central option in a product display area in the final five seconds of the decision-making process – and that was the point at which they determined which option to choose. 

It turns out that the process is a subconscious one. When asked how they had come to choose which product to buy, consumers did not accurately recall their reasons for their decision. What’s more, they were not aware of any conscious visual focus on one area of the display over another.

What does uncovering these unconscious habits mean for the average shopper? Greater awareness of buying behaviours should lead to more informed choices. Says Bodur, “by using this newfound knowledge that visual attention is naturally drawn to the center of a display, consumers can consciously train themselves to make a more thorough visual scan of what’s on offer.” 

When it comes to holiday shopping, the visual equivalent to thinking outside of the box just might lead to savvier selections. 

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Shoppers are drawn to centrally placed products

Retail Zombies

Retail Zombies from MAgnus Ohlsson

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Retail Zombies

Consumers Develop Complex Relationships with Celebrities to Construct Identity

Marketers and advertisers know celebrities influence consumers’ purchasing decisions, but a new study by a marketing researcher at the University of Arkansas and her colleague in the United Kingdom suggests that consumers take an active role in using celebrities to help them build their own identities and self-images, rather than merely passively receiving meanings and messages from celebrities and incorporating them into their lives.

“Our primary interest is what consumers do with celebrity and the roles celebrity interactions play in consumer identity construction,” said Hayley Cocker, visiting professor in the Sam M. Walton College of Business. “Of course, we’re talking about the cultural messages and meanings provided by celebrities, not literal relationships. Rather than a passive, top-down model in which celebrities use their marketing power to pass on cultural meanings to consumers, we found that consumers actually flit between different and often fragmented identities passed along to them by celebrities.”

To gain a better understanding of the dynamic between consumers and celebrities, Cocker and Emma Banister, lecturer at Manchester Business School in the United Kingdom, interviewed 11 young adults – six women and five men, all British and between the ages of 18 and 24. Cocker and Banister asked questions about the influence of celebrities in the subjects’ efforts to build their identities. To demonstrate the relevance of celebrities in the everyday lives of ordinary young-adult consumers, the researchers chose subjects who experience a range of feelings toward celebrities.

The researchers found that rather than a single message passed down from celebrity to passive consumer, a range of consumer-celebrity relationships conspires to allow consumers to form a personal identity that matches who they want to be. In effect, the various meanings and messages displayed by celebrities help consumers develop a portfolio of relationships that allow them to function as creators of meaning for themselves. Cocker describes the complex combination of these different and sometimes fragmented relationships as “celebrityscapes” or “celebrity bricolages,” within which the consumer has the freedom and opportunity to engage or not or to manipulate at will.

Cocker uses the example of Zara, one of the interviewees, to illustrate this phenomenon. Zara labeled different aspects of herself as “goofball,” “wanting to study,” “positive” and “old-fashioned,” and she relied upon different celebrities – singer and X-Factor judge Nicole Scherzinger (goofball); Emma Watson, “Hermione” in the Harry Potter films (wanting to study); Victoria’s Secret model Miranda Kerr (positive self); and Kate Middleton, Duchess of Cambridge (old-fashioned) – to execute and move between these various identities.  

From Cocker’s interview notes:

“Zara likes ’organic’ products like Miranda. Miranda has her own organic skincare line and every Monday she uploads blogs – which Zara reads every Monday (information on yoga, food and generally stuff she likes). She is Zara’s favorite celebrity. She also follows Miranda on Twitter and wants to buy a pair of leather trousers as she saw them on Miranda Kerr. Zara “wouldn’t buy day stuff from Kate Middleton” – she buys day stuff using Miranda Kerr and Blake Lively. “Miranda Kerr always has her hair to one side, she never has it on both sides and I always try and do that.”

The interviews with all subjects revealed nine types of relationships young adults develop with celebrities. These relationships fit within three general categories – everyday, inspirational and negative. Everyday relationships include “best friendship,” “compartmentalized” and “childhood friendship.” The inspirational category includes “aspirational,” “admiration” and “illusory” relationships. Negative celebrity relationships include “antagonistic,” “not for me” and “guilty pleasures,” all of which connote, as the name suggests, some kind of negative quality that motivates the consumer.

“We see consumers as active producers of symbols and signs of consumption,” Cocker said. “They are creating meaning rather than just waiting around to be told what is important in terms of constructing their identity.”

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Consumers Develop Complex Relationships with Celebrities to Construct Identity

Inviting customer complaints can kill business

Giving customers a chance to complain can be a bad idea if customers believe they’re to blame for a product’s failure, a new study from the Sauder School of Business at UBC shows.

“It’s commonly assumed that giving customers a chance to voice grievances allows companies to maintain relationships,” says Marketing Professor Darren Dahl, who co-authored the recent Journal of Marketing study with PhD student Lea Dunn.

“But our research shows that when a person feels implicated in a product’s failure – think building Ikea furniture – they’re more likely to shift blame to the product when complaining and increase ill will toward it.”

In an experiment, subjects were divided into two groups and directed to replicate the preparation of an “award-winning smoothie.” All of the participants were set-up to fail with poor quality food processors.

Half the group was made to feel the smoothie failure was their fault and the other half was told that it was likely a machine malfunction.Participants primed to believe the failure was their fault rated the machine lower on a nine-point scale after complaining – 3.29 – versus the same participants who were not given the chance to complain – 4.31.Participants primed to blame the processor rated the device higher after given the chance to complain – 4.02 versus 3 out of nine.

A further experiment showed that when self-blamers were provided with affirmative statements about their competence, they became more likely to rate a product favourably after complaining – 5.22 versus 3.36 on a nine-point scale.

“With companies turning to social media to communicate with consumers, the power of customer complaints has been amplified,” says Professor Dahl. “Our study shows that companies shouldn’t just let people sound off. They need to be stroking egos, as well.”

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Inviting customer complaints can kill business

The End Of Economy As We Know It

In Europe, we are now getting used to read about the Euro crisis, and the fiscal cliff in the US has a view that would make Grand Canyon full of envy. During the last ten years, central banks have expanded their balance sheets from 3 to 13 trillions dollars. But one country could be even worse off and that is Japan. During 2011 sales of adault diapers exceeded those for babies for the first time. With a debt level that would make the greek economy look really well managed, the rate of birth vs the number of senior citizens, the equation is hard to solve:

Kyle Bass

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The End Of Economy As We Know It

Social Media 2013

The latest developments and stats:

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Social Media 2013

In store facial recognition: How often are your customers shopping?

NEC has developed a facial recognition software that enables to track age, gender and shopping frequency across multiple stores.

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In store facial recognition: How often are your customers shopping?

In the mood to shop: Exploring the Financial Costs of Sadness

Your emotions can certainly impact your decisions, but you might be surprised by the extent to which your emotions affect your pocketbook. New research from psychological scientist Jennifer Lerner of the Harvard Kennedy School of Government and colleagues Yi Le and Elke U. Weber of Columbia University explores how impatience brought on by sadness can in turn produce substantial financial loss. The study is published inPsychological Science, a journal of the Association for Psychological Science.

Using data collected at the Harvard Decision Science Laboratory and the Center for Decision Sciences at Columbia, the authors found that subjects randomly assigned to view a video that induced sadness exhibited impatience and myopia, which were manifested in financial decisions that elicited higher gains in the short term, but lesser gains over the longer term. Thus, subjects in the sadness condition earned significantly less money than subjects in the neutral condition. They showed what is known as “present bias,” wherein decision makers want immediate gratification and so they ignore greater gains associated with waiting.

“Across three experiments, the median sad participant valued future rewards (i.e., those delayed by 3 months) 13% to 34% less than did the median neutral-state participant. These differences emerged even though real money was at stake and even though discount rates in the neutral condition were already high,” the authors reported.

“These experiments, combining methods from psychology and economics, revealed that the sadder person is not necessarily the wiser person when it comes to financial choices,” they concluded. “Instead, compared with neutral emotion, sadness — and not just any negative emotion — made people more myopic, and therefore willing to forgo greater future gains in return for instant gratification.”

Lerner and her co-authors contend that the findings have important implications for the design of public policy — in areas such as estate planning and credit card regulations.

“Public-policy design and implementation need to be based on consideration of the full range of psychological processes through which decisions are made,” the authors argue. “Fully understanding these processes may also help address the economic problems associated with Americans’ increasing reliance on credit cards.”

Jennifer Lerner is Professor of Public Policy and Management at the Harvard Kennedy School of Government as well as Director of the Harvard Laboratory for Decision Science. This inter-disciplinary laboratory, which she co-founded with two economists, draws primarily on psychology, economics, and neuroscience to study human judgment and decision-making.

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In the mood to shop: Exploring the Financial Costs of Sadness

Why we wait: Psychologist discusses the reasons we love to line up for the latest gadgets and greatest sales

As the Black Friday sales start earlier and the smartphones play hard to get, a Kansas State University professor says psychology can explain why consumers wait in line for the latest sales, gadgets and experiences.

Different people wait in long lines for different reasons, said Laura Brannon, a professor of psychology who also researches consumer psychology. A line of people can represent a wide variety of personalities and motivations for waiting -- or camping -- in line.

"People who are very motivated to have scarce items tend to have a high need to be unique," Brannon said. "On the other hand, people who are motivated by social proof tend to want to fit in with everyone else. You might see a bunch of people waiting in line, but different things might be going through all their minds. It's a little more complicated than it might first appear."

From Harry Potter midnight shows to smartphones and video games, waiting in line for the latest product or experience is not a new phenomenon. Brannon traces the most famous waiting incident back to the mid-1980s, when the Cabbage Patch Kids doll frenzy occurred. Parents promised the dolls to their children, but the demand greatly exceeded availability, she said. Although the dolls were fairly inexpensive, people still paid hundreds of dollars to obtain them.

People lined up a few weeks ago for the release of the latest smartphone, and the lines will happen again with the arrival of Black Friday on Nov. 23. Although Brannon said there might be good deals on Black Friday, there is also a lot of clever marketing involved because marketers are aware of social influence practices on the consumer.

"I think the quality of the deals offered will obviously vary by store," Brannon said. "Many stores have a few very good deals to get consumers into the store, hoping that they'll buy other things as well."

Brannon said that at least two social influence principles explain consumers' willingness to wait in line for products or experiences: the scarcity principle and the social proof principle.

The scarcity principle is similar to playing hard to get in the dating arena. The principle states that people naturally want things that are rare or difficult to obtain, Brannon said. In reality, many things -- such as diamonds -- are naturally rare and are actually valuable. Marketers understand this effect on other products, too.

"Marketers create a demand by imposing an artificial scarcity on an opportunity," Brannon said. "Research shows that people tend to react against limits on opportunities and reassert their freedom to have and do what they want."

Even though people could wait an extra week for a new smartphone or a few extra days to see a movie, the scarcity principle motivates people to buy the smartphone or see the movie because they are difficult to obtain.

The social proof principle is the concept that if other people are doing something, we use that as evidence that it must be good, Brannon said. Advertisers emphasize when their products are the best-selling or leading brand. It is usually the case that the reason a product or experience is very popular is because people realize it is of good quality or value.

"Once the lines form, there's a tendency to assume that's a cue to the value of the experience or opportunity, and people want to join in," Brannon said.

With the social proof principle, there also is an element of normative influence, which is when people want to fit in with what other people are doing, Brannon said. For instance, if five people stand on a busy street corner and look up in the air, most passersby will stop and look up as well because they'll assume there's something to see. The same concept applies when people wait in line.

"Solidarity might be one part of it," Brannon said. "For some people it might be more about the information that others' behavior provides, and for others it might be wanting to fit in. But for most people it is probably a combination of these two."

Similarly, people's willingness to wait in line also involves how the waiting is framed. People might complain about waiting in line for two hours for something required, while they are less likely to complain about waiting overnight for the latest gadget that they want.

"When someone is waiting at the DMV, they're waiting to do something they have to do," Brannon said. "When they're waiting to get an iPhone, they're waiting for something they want. The waiting makes the first one a negative experience more negative, but the waiting can increase the excitement and anticipation of the second experience."

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Why we wait: Psychologist discusses the reasons we love to line up for the latest gadgets and greatest sales

Product Choice: When Are Consumers Most Satisfied?

Consumers may be less satisfied with the choices they make if their options are presented one at a time rather than all at once, according to a new study in
the Journal of Consumer Research.
“Sequentially presented choices create uncertainty. Consumers know that alternatives will become available in the future, but not what those alternatives will be. So there is always the possibility that a better option could later be available,” write authors Cassie Mogilner (Wharton School of the University of Pennsylvania), Baba Shiv (Stanford University), and Sheena Iyengar (Columbia University).
Many decisions—selecting a bar of soap at the drugstore, an entrée at a restaurant, or a pair of shoes from Zappos—involve choosing from options presented all at once. However, many important decisions—choosing a job, a home, or even who to marry—involve options presented one at a time. Does the way options are presented affect consumer satisfaction?
In a series of experiments, consumers presented with options one at a time ended up less satisfied with, and ultimately less committed to, their choices than those presented with their options all at once. Consumers presented with their options all at once tended to remain focused on the current set of options and focused on comparing them against each other, whereas those presented with their options one at a time tended to imagine a better option, hoping it would eventually become available. This feeling of hope undermined how they later experienced their choice, resulting in lower satisfaction and commitment levels.
“The primary difference between sequentially and simultaneously presented options is the presence of alternatives. Consumer satisfaction with a chosen option depends less on its objective merits, and more on how it compares to alternatives—real or imagined. Enjoying the most satisfaction from our choices might require being willing to give up the eternal quest for the best,” the authors conclude. 

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Product Choice: When Are Consumers Most Satisfied?

Matching Brands: Why Do Consumers Prefer Tostitos Salsa with Tostitos Tortilla Chips?

onsumers prefer matching brands for products that are consumed together because they believe products from the same brand have been designed to go together, according to a new study in the Journal of Consumer Research.
“How much do brand combinations affect how much consumers enjoy products that are consumed together? It seems that matching brand labels enhance enjoyment by encouraging consumers to believe that the products were tested and designed to go well together,” write authors Ryan Rahinel and Joseph P. Redden (both University of Minnesota).
In one study, consumers ate Tostitos brand tortilla chips and Tostitos brand salsa but were told that the chips and salsa were various combinations of fictional brand names (“Festivity” or “Party Time”). Consumers enjoyed the chips and salsa more when told that the two foods were from the same brand.
In another study, consumers again ate Tostitos tortilla chips and salsa but were told that the chips and salsa were various combinations of “Brand A” and “Brand B.” Some were told that the brands had conducted joint research and design on the two products, while others were told that the brands had coordinated on matters unrelated to taste (coupons and distribution). The latter group of consumers enjoyed chips and salsa from the same brand more than chips and salsa from different brands. However, both groups enjoyed the chips and salsa more when told that the brands had conducted joint product research and design, regardless of the brands they were told they were consuming.
“There is no universal answer to which brand a consumer likes the most. The brand a consumer prefers for a particular product depends on the brand of other products with which it is being combined. A company that offers products that are consumed together will have an advantage over other rival brands that do not offer both individual products, since consumers will want to have matching brands,” the authors conclude. 

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Matching Brands: Why Do Consumers Prefer Tostitos Salsa with Tostitos Tortilla Chips?

Trying to Save Money? Ask for Crisp New Bills at the Bank

Consumers will spend more to get rid of worn bills because they evoke feelings of disgust but are more likely to hold on to crisp new currency, according to a new study in the Journal of Consumer Research.
“The physical appearance of money can alter spending behavior. Consumers tend to infer that worn bills are used and contaminated, whereas crisp bills give them a sense of pride in owning bills that can be spent around others,” write authors Fabrizio Di Muro (University of Winnipeg) and Theodore J. Noseworthy (University of Guelph).
Does the physical appearance of money matter more than we think? Money is said to be interchangeable. If we lend someone a $20 bill, it shouldn’t matter if they pay us back with the same $20 bill or a different one. This is why diamonds, real estate, and art are not suitable as currency. But money may not be as interchangeable as consumers think.
In several studies, consumers were given either crisp or worn bills, and asked to complete a series of tasks related to shopping. Consumers tended to spend more with worn bills than with crisp bills. They were also more likely to break a worn larger bill than pay the exact amount in crisp lower denominations.
However, when consumers thought they were being socially monitored, they tended to spend crisp bills more than worn bills. When testing the well-known finding that people spend more when given the equivalent amount in lower denominations (four $5 bills) than when holding a large single denomination (a $20 bill), the authors found that the physical appearance of money can enhance, attenuate, or even reverse this effect.
“Money may be as much a vehicle for social utility as it is for economic utility. We tend to regard currency as a means to consumption and not as a product itself, but money is actually subject to the same inferences and biases as the products it can buy,” the authors conclude. 

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Trying to Save Money? Ask for Crisp New Bills at the Bank

A scientific explanation to why people perform better after receiving a compliment

A team of Japanese scientists have found scientific proof that people doing exercises appear to perform better when another person compliments them. The research was carried out by a group lead by National Institute for Physiological Sciences Professor Norihiro Sadato, Graduate University for Advanced Studies graduate student Sho Sugawara, Nagoya Institute of Technology Tenure-Track Associate Professor Satoshi Tanaka, and in collaboration with Research Center for Advanced Science and Technology Associate Professor Katsumi Watanabe. The team had previously discovered that the same area of the brain, the striatum, is activated when a person is rewarded a compliment or cash. Their latest research could suggest that when the striatum is activated, it seems to encourage the person to perform better during exercises. The paper is published online in PLOS ONE (November 7, 2012, edition).

Forty-eight adults recruited for the study were asked to learn and perform a specific finger pattern (pushing keys on a keyboard in a particular sequence as fast as possible in 30 seconds). Once participants had learned the finger exercise, they were separated into three groups. One group included an evaluator who would compliment participants individually, another group involved individuals who would watch another participant receive a compliment, and the third group involved individuals who evaluated their own performance on a graph. When the participants were asked to repeat the finger exercise the next day, the group of participants who received direct compliments from an evaluator performed better than participants from the other groups. It indicates that receiving a compliment after exercising stimulates the individual to perform better afterwards.

According to Professor Sadato, "To the brain, receiving a compliment is as much a social reward as being rewarded money. We've been able to find scientific proof that a person performs better when they receive a social reward after completing an exercise.  There seems to be scientific validity behind the message 'praise to encourage improvement'. Complimenting someone could become an easy and effective strategy to use in the classroom and during rehabilitation." 

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A scientific explanation to why people perform better after receiving a compliment

Content is not the only king

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Content is not the only king

Retailing 2020

Downloadable outlook from PWC on the state of retail in 2020. Start download by clicking here.o

Retailing 2020

Interactive Shopping Window

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Interactive Shopping Window

Less than 1% of online purchases come from social channels

The people of media world are still living the hype of social media. But research shows that social media and tactics is a barely negligible source of sails for either new or repeat customers. Fewer than 1% of transactions could be traced to trackable social links.

Thirty-nine percent of online retail transactions by new customers start with clicks from paid or organic search results and less than 1% come from social channels according to a new Forrester report. "In spite of changes to the interactive marketing landscape and the growing number of shoppers using mobile and tablet devices to access content, core elements of web marketing continue to be effective," writes Forrester Analyst Sucharita Mulpuru.

In order to determine how and when shoppers touch various platforms when completing a transaction online, Forrester partnered with GSI Commerce to examine 77,000 consumer orders made over a period of 14 days in April 2012. Findings in the report include:

Multiple platforms influence many buyers. While 33% of transactions by new customers involve more than one trackable touchpoint, 48% of repeat customers visit multiple trackable touchpoints. The most popular platforms include organic search, paid search, and email.

Email and direct traffic matter for frequent customers. Thirty percent of transactions by repeat customers start with an email from the retailer, and an additional 30% type the retailer's URL directly into a browser.

Social tactics are not meaningful sales drivers. Forty-eight percent of consumers reported that social media posts are a great way to discover new products, brands, trends, or retailers, but less than 1% of transactions could be traced back to trackable social links.

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Less than 1% of online purchases come from social channels

When Do Consumers Make Different Conclusions about the Same Product?

Depending on which naive theory consumers use, a low price can indicate either good value or low quality, whereas a high price may imply either poor value or high quality, according to a new study in the Journal of Consumer Research.

“Consumers rarely have complete information and use various strategies to fill the gaps in their knowledge as they consider and choose products. One of these strategies involves using naive theories: informal, common sense, explanations that consumers use to make sense of their environment. For example, consumers may believe that popular products are high in quality while also believing that scarce products are high in quality,” write authors Hélène Deval (Dalhousie University), Susan P. Mantel (Ball State University), Frank R. Kardes (University of Cincinnati), and Steven S. Posavac (Vanderbilt University).

In one study, consumers were shown an ad for a bottle of wine with either a high or low price. When subtly reminded of quality, consumers evaluated the expensive wine more favorably than the cheap wine. However, when subtly reminded of value, they rated the cheap wine more favorably.

Sales promotions succeed when consumers perceive that they are getting a good deal, but they can also backfire if consumers perceive that lower prices indicate poor quality. Or, as J.C. Penney recently discovered, a company may implement an everyday low-pricing strategy that manages to reduce brand value and alienate consumers if many of them believe that low prices equal low quality. Over the years, J.C. Penney customers had become so used to sales that they no longer believed they were getting a good deal.

“Using subtle tactics, companies can bring a pre-existing naive theory to the consumer’s mind in order to guide favorable interpretation of their message. Yet, these tactics can backfire dramatically if they design a strategy by assuming that a certain naive theory is going to drive consumer evaluation and choice when, in fact, several naive theories are available to the consumer,” the authors conclude. 

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When Do Consumers Make Different Conclusions about the Same Product?

When Do Consumers Compare Experience over Value?

Consumers are often less satisfied when they buy or receive products that are easily counted because this makes them focus on value instead of experience, according to a new study in the Journal of Consumer Research.
“Numbers make us feel more certain of what is in front of us. When we count, we understand exactly how big, expensive, heavy, or old something is. But when we buy or receive products that are easily counted, we may be less satisfied,” write authors Jingjing Ma and Neal J. Roese (both Kellogg School of Management, Northwestern University).
What happens when consumers are compensated with gifts such as a toaster or a winter coat instead of cash? If two consumers receive the same dollar value, it shouldn’t matter if it comes in the form of gifts or cash. But it does matter.
In one study, the authors rewarded consumers with either cash or slices of cake. Predictably, consumers who received more cash were happy with the outcome while those getting less cash were upset. But whether people received more or less cake didn’t affect their satisfaction nearly as much. Because the cake slices were less easily counted, people were just as happy with less as with more. When consumers received a slice of cake, they were more likely to focus on how delicious their cake is and ignore how much cake others received.
Another study showed that when people miss out on a deal, they are more upset when that deal was countable (buy one, get one free) rather than uncountable (get a larger bottle at the regular price). This suggests that programs offering rewards that can be easily counted such as airline frequent flyer miles may be less satisfying to consumers than less easily counted reward programs such as those offering free products or vacation packages.
“Countability drives comparisons. When rewards are easily counted, people are more likely to compare themselves with others. But when rewards are less easily counted, people focus mostly on the unique aspects of their own experience,” the authors conclude. 

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When Do Consumers Compare Experience over Value?

Reminders of Money Impact Consumer Decision- Making

When reminded of money (not cost), consumers are more likely to evaluate a new product based on its primary features or brand name, according to a new study in the Journal of Consumer Research.
“Money and symbols of money are ubiquitous in our daily consumer environment, and money is linked to social resources such as security, status, power, confidence, and freedom. Mere reminders of money have the potential to signal confidence and strength and thereby impact consumers when making decisions,” write authors Jochim Hansen (University of Salzburg), Florian Kutzner (University of Heidelberg), and Michaela Wänke (University of Mannheim).
Consumers encounter money or symbols of money all the time. We earn, save, spend, or possibly lose money. We physically handle bills and coins. We are reminded of money by proverbs (e.g., A penny saved is a penny earned), songs (e.g., Money, Money, Money), and movie titles (e.g., The Color of Money). Given the importance of money in our lives, it is important to understand the psychological implications of such frequent reminders of money.
In a series of studies, the authors found that reminders of money caused consumers to think more abstractly and focus on the primary features of a product instead of its secondary features. For example, we might wonder if a television has great picture or sound quality and not pay any attention to the warranty. Or we might think about whether a yogurt is healthy or tasty but ignore the package design. Additionally, consumers reminded of money are more likely to evaluate a new product based on its brand name instead of its individual features. For example, we might think that a new bike by Mercedes must be good because Mercedes is a good brand and ignore its actual features.
“Our studies show that reminders of money influence consumer decision-making. Consumers should keep this in mind when choosing products, because they may overlook certain features when reminded of money,” the authors conclude. 

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Reminders of Money Impact Consumer Decision- Making

In the Blink of an Eye: Distracted Consumers Are Most Likely to Remember Ads with Subtle Variations

Consumers are more likely to remember an ad they’ve seen repeatedly if one element in the ad changes location from one exposure to the next, according to a new study in the Journal of Consumer Research.
“Consumers are bombarded with thousands of advertisements daily, are increasingly multitasking, and are preoccupied with everyday activities. The likelihood that they will devote their full attention to any one specific message is getting smaller every day. What impact can an ad have if consumers pay virtually no attention to it?” write authors Stewart Shapiro (University of Delaware) and Jesper H. Nielsen (University of Arizona).
Even when consumers pay very limited attention, advertising can succeed through repetition. When consumers are exposed to a print ad, an image of the ad is stored in their memory and this image becomes clearer with each exposure to the ad. As this memory becomes clearer, preference for the ad increases. Notably, this occurs even if prior exposures to the ad are extremely brief and a consumer devotes much of their attention to something other than the ad.
In a series of experiments, the authors found that this effect may actually be enhanced if one ad element such as the brand logo or product depiction changes location within an ad from one exposure to the next. Under conditions of limited attention, making subtle changes to an ad over repeated exposures may in fact be better than repeating the exact same ad or altering more ad elements from one exposure to the next. For instance, a company could create a more effective ad by placing their brand logo in the bottom left corner the first time it is shown, and then placing it in the bottom right corner of the otherwise unchanged ad the next time it is shown.
“Companies are still learning how to make the most of advertisements that are viewed quickly as a consumer searches for something else on a web page or in a magazine. Subtle changes to ads viewed repeatedly can boost advertising effectiveness in increasingly cluttered environments visited by increasingly unfocused consumers,” the authors conclude. 

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In the Blink of an Eye: Distracted Consumers Are Most Likely to Remember Ads with Subtle Variations

The Mobile Imperative

Key insight report - More than a marketing channel from TNS

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The Mobile Imperative

The end of stock market crashes?

A 72-year study of the Dow Jones could help avoid the kind of stock market crash that struck the world economy in 2008.

Professor Tobias Preis has led a study of the second oldest US market index and discovered that a portfolio of shares, far from being diverse and spreading risk during a time of stock market slump, start behaving the same.

This new study has been carried out in collaboration with Dr. Dror Y. Kenett (Boston University, USA), Prof. H. Eugene Stanley (Boston University, USA), Prof. Dirk Helbing (ETH Zurich, Switzerland), and Prof. Eshel Ben-Jacob (Tel-Aviv University, Israel).

In their paper entitled Quantifying the Behaviour of Stock Correlations Under Market Stress, Professor Preis reveals that the 'diversification effect' that protects a portfolio of shares through the vagaries of the stock market disappears when there is a general slump in the market.

Professor Preis believes this pattern can be used to anticipate 'diversification breakdown' in share portfolios and allow investors to steer away from a major crash by spreading their investments elsewhere or 'hedge' their money.

It could help traders avoid the major crashes that hit stock markets in 2008. Between September and December four of the five biggest daily falls in the Dow Jones hit the US stock exchange. It was part of one of the biggest stock market crashes and led to the economic recession most of the world is still suffering.

Professor Preis, who is associate professor of behavioural science and finance at Warwick Business School, which is part of The University of Warwick, said: "We analysed the daily closing prices of the 30 stocks forming the Dow Jones Industrial Average from March 15, 1939, to December 31, 2010. Our results also shed light on why correlation risks in mortgage bundles were underestimated at the beginning of the recent financial crisis."

The results of this study, published in Scientific Reports, provide crucial information on the behaviour of markets in times of stress.

"We found a striking result," said Dr Kenett. "The average correlation between these stocks increases at the same rate as market stress. Consequently the diversification effect, which should protect a portfolio, melts away in times of market losses, just when it would be needed most."

Their research has important applicative implications.

"We could use this to anticipate diversification breakdowns, which could guide the design of portfolios and contribute to the increased stability of the financial markets." says Professor Preis.

The German physicist, who founded Artemis Capital Asset Management, believes the data he has collected from 72 years of Dow Jones closing prices can be used to help portfolios steer clear of stock market crashes.

Professor Preis said: "When financial markets are suffering significant losses our findings could be used to anticipate the increasing lack of diversification in portfolios. This would enable a more accurate assessment of the risk of making losses."

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The end of stock market crashes?

Do Attractive People Have Attractive Traits and Values?

We’ve all been warned not to “judge a book by its cover,” but inevitably we do it anyway. It’s difficult to resist the temptation of assuming that a person’s outward appearance reflects something meaningful about his or her inner personality.

Indeed, research shows that people tend to perceive attractive adults as more social, successful, and well-adjusted than less attractive adults, a phenomenon that’s been termed the “what is beautiful is good” stereotype.

But could that really be true? Are physically attractive people really just as attractive on the inside as they are on the outside?

In a new article published in Psychological Science, a journal of the Association for Psychological Science, Lihi Segal-Caspi and Sonia Roccas of the Open University and Lilach Sagiv of The Hebrew University of Jerusalem investigated whether the “what is beautiful is good” stereotype holds up in the real world.

The researchers examined how traits, which describe what people are like, and values, which describe what people consider important, might be related to physical attractiveness.

Segal-Caspi and colleagues hypothesized that outside observers would perceive attractive women as more likely to have socially desirable personality traits than less attractive women. Specifically, they hypothesized that observers would judge attractive women to be more agreeable, extraverted, conscientious, open to experiences, and emotionally stable than less attractive women. They hypothesized that no such correlation would be found between women’s attractiveness and their perceived values, since judgments about what constitutes a “good” value are likely to vary from observer to observer.

The researchers recruited 118 university students to serve as “targets” or “judges.” The targets completed surveys about their values and their traits. They were then videotaped entering a room, walking around a table looking at the camera, reading a weather forecast, and leaving the room. Each judge saw a videotape of a different target, chosen at random, and evaluated the target’s values and traits and then her attractiveness, along with other physical attributes.

Women who were rated as attractive were perceived as having more socially desirable personality traits, such as extraversion, openness to experience, and conscientiousness, just as the researchers hypothesized. Out of the ten types of values, however, only one was thought to be associated with attractiveness: Attractive women were perceived as more likely to value achievement than less attractive women.

But when the researchers looked at the targets’ actual self-reported traits and values, they found the opposite relationships. Targets’ attractiveness, as rated by the judges, was associated with with their self-reported values and not with their personality traits. Women who were rated as attractive were more likely to endorse values focused on conformity and submission to social expectations and self-promotion.

Segal-Caspi and colleagues conclude that although some people may think beauty and goodness go together, the results from this study indicate that beautiful people may tend to focus more on conformity and self-promotion than independence and tolerance.

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Do Attractive People Have Attractive Traits and Values?

Pushing Buttons & Pulling Triggers: Using Psychology to Connect with People and Create Value

Pushing Buttons & Pulling Triggers: Using Psychology to Connect with People and Create Value from Kelsey Ruger

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Pushing Buttons & Pulling Triggers: Using Psychology to Connect with People and Create Value

Accenture: Six ways to make volatility your friend.

Special Report
Corporate agility
Six ways to make
volatility your friend

Among the highlights:

"Twelve-point agility checklist

1. Does your organization have at least three scenarios for how your industry is most likely to evolve over the next 36 months? Does it have good options for responding?
   
2. What three big opportunities would your company be pursuing if it were more agile?
   
3. Imagine three possible sources of competition that you haven’t thought would be likely until now. How will you respond to them?
   
4. Put yourself in your top competitors’ shoes. What could they do to disrupt the market in the next year, and what are your plans for outsmarting them?
   
5. How is your company augmenting its ability to quickly sense new market anomalies? Are you taking full advantage of the new capabilities of today’s analytics tools?
   
6. What are the three biggest factors preventing your organization from being more agile? How do you plan to overcome them?
   
7. Did you make such big cuts during the recession (particularly in terms of talent) that your agility and ability to grow have been damaged? If so, how are you compensating now for those cuts?
   
8. In what areas should you be collaborating with your competitors to drive changes in the market?
   
9. Who among your organization’s new leaders will be most effective at taking advantage of volatility? What makes them different from your longtime leaders?
   
10. Which of your customers are the best leading indicators of future market opportunities?
    
11. Where would faster decision making be of most benefit to your company?
    
12. Have you been able to cut your company’s fixed costs in the past few years to improve its agility?"

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Accenture: Six ways to make volatility your friend.

Empower your fans to take over your advertising

How to empower your fans to take over your advertising from iMedia Connection on Vimeo.o

Empower your fans to take over your advertising

Retail Trends For 2013 And Beyond

Retail trends 2013 from MAgnus Ohlsson

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Retail Trends For 2013 And Beyond

Retail's High Tech Future

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Retail's High Tech Future

Untapped Potential: Advertising in Mobile Publications

Untapped Potential: Advertising in Mobile... by advertisingweeko

Untapped Potential: Advertising in Mobile Publications

Our Preferences Change to Reflect the Choices We Make, Even Three Years Later

You’re in a store, trying to choose between similar shirts, one blue and one green. You don’t feel strongly about one over the other, but eventually you decide to buy the green one. You leave the store and a market researcher asks you about your purchase and which shirt you prefer. Chances are that you’d say you prefer the green one, the shirt you actually chose. As it turns out, this choice-induced preference isn’t limited to shirts. Whether we’re choosing between presidential candidates or household objects, research shows that we come to place more value on the options we chose and less value on the options we rejected.

One way of explaining this effect is through the idea of cognitive dissonance. Making a selection between two options that we feel pretty much the same about creates a sense of dissonance – after all, how can we choose if we don’t really prefer one option over the other? Re-evaluating the options after we’ve made our choice may be a way of resolving this dissonance.

This phenomenon has been demonstrated in numerous studies, but the studies have only examined preference change shortly after participants make their decision. Existing research doesn’t address whether these changes in preference are actually stable over time.

In a new article published in Psychological Science, researcher Tali Sharot of University College London and her colleagues examine whether choice-induced changes in preference are fleeting or long-lasting.

The researchers asked 39 undergraduate participants to rate the desirability of 80 different vacation destinations, rating how happy they think they would be if they were to vacation at that location. They were then presented with pairs of similar vacation destinations and asked to choose which destination they would prefer. The participants rated the destinations again immediately after making their choices and once more three years later.

To test whether a sense of agency over the decision makes a difference for choice-induced changes in preference, the researchers looked at participants’ preferences when the participants made the choices themselves and when a computer instructed the participants’ choices.

The results suggest that the act of choosing between two similar options can lead to enduring changes in preference. Participants rated vacation destinations as more desirable both immediately after choosing them and again three years later. This change only occurred, however, if they had made the original choice themselves. The researchers observed no change in participants’ preferences when the computer instructed their choices.

Sharot and her colleagues argue that fact that this effect is robust and enduring has implications for a diverse array of fields, including economics, marketing, and even interpersonal relationships. As Sharot points out, for example, repeatedly endorsing a particular political party may entrench this preference for a long period of time.

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Our Preferences Change to Reflect the Choices We Make, Even Three Years Later

Special K Tweet Shop

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Special K Tweet Shop

iPhone 5: Consumers focus too much on having the latest features, finds new study

More than 2 million consumers got to gloat Friday about their shrewdness in procuring an iPhone 5, with its larger screen and 200 additional features through its new operating system.

But once the novelty wears off, will they still enjoy their purchase?

It depends on why they bought it, says new research from a marketing professor at Olin Business School at Washington University in St. Louis.

Across five studies and four product domains,Joseph K. Goodman, PhD, assistant professor of marketing, found that consumers fail to estimate their feature usage rate before purchasing multifunctional products, which negatively affects product satisfaction.

The study, “Having Versus Consuming: Failure to Estimate Usage Frequency Makes Consumers Prefer Multi-feature Products,” is forthcoming in the Journal of Marketing Research.

“We propose that consumers focus on having features instead of elaborating on how often a feature will be used, and this can lead to a decrease in product satisfaction,” Goodman says.

He and his co-author, Caglar Irmak, PhD, assistant professor at the University of South Carolina, show that this shift in preferences is due to a change in elaboration from using to having features.

The pair identifies three key moderators to this effect: need for cognition, feature trivialness and materialism.

“Consumers focus too much on just having the latest features, and don’t spend time elaborating on how often they will use the features,” Goodman says. “When they do actually elaborating on usage, then they tend to buy lower featured products and they tend to be more satisfied with their purchase, regardless of whether they buy a high or low feature product.”

What should consumers do?

“Our findings can’t tell consumers what to buy, but they do suggest that consumers should at least stop and consider how often they are going to use each new additional feature before they make their decision,” Goodman says. “This little act of consideration can lead to greater satisfaction down the road.”

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iPhone 5: Consumers focus too much on having the latest features, finds new study

How Much Product Information Do Consumers Want?

The depth of explanation about novel products influences consumer preferences and willingness to pay, according to a study led by the University of Colorado Boulder and Brown University.
When it comes to descriptions about the functions of new and unusual goods -- such as a self-watering plant system, special gloves for touchscreens or an eraser for wall scratches -- some people prefer minimal details. Dubbed "explanation foes" in the study, they gain a strong sense of understanding and desire for products through shallow explanations.
In contrast, other people -- dubbed "explanation fiends" in the study -- derive desire for products from deep and detailed explanations.
"There are these two different types of consumers," said lead author Phil Fernbach, assistant professor of marketing at CU-Boulder's Leeds School of Business. "On these two sides, consumers differ in the amount of detail that makes them feel like they understand and -- because of that feeling of understanding -- the amount of detail that will make them prefer a product."
A paper on the subject was published online today in the Journal of Consumer Research.
Researchers say the study results can help consumers make better decisions.
"We're not making a value judgment on whether it's better to be an 'explanation foe' or 'fiend,' " said Fernbach. "You don't have to want to know how stuff works, but make sure that your intuition about whether you understand a product is based on objective information and not just a feeling."
In one part of the study, participants were given varying explanations of a new tinted food wrapper product. "Explanation foes" highly rated their understanding and preference for the item when they read a simple description of how its "white coloring protects food from light that causes it to spoil, thereby keeping food fresh for longer."
"Explanation fiends" highly rated their understanding and preference for the food wrapper when they read a more detailed description of how "atoms in the tinting agent oscillate when hit by light waves causing them to absorb the energy and reflect it back rather than reaching food, where it would break the bonds holding amino acids together, thereby keeping food fresh for longer."
The study also found that "explanation foes," who are more common, tend to have an inflated sense of understanding about novel products. Their heightened perception disappears and their willingness to pay decreases when they attempt to explain how a product works.
Conversely, "explanation fiends" tend to have a more conservative sense of understanding about novel products. For them, attempting to explain how a product works does not have a negative effect on their sense of understanding and their opinion of the product stays the same or increases, according to the study.
Attitudes toward explanation were predicted by a cognitive reflection test that measures how much people naturally engage in deliberative thinking. Each test question elicits an intuitive but incorrect answer and participants who impulsively respond tend to err. These participants are the "explanation foes" who prefer less explanation.
In contrast, those who inhibit their initial responses to the cognitive reflection test and think more deeply tend to correctly answer. These participants are the "explanation fiends" who prefer more in-depth descriptions.
While the study can help consumers with better decision-making, it also yields advice for marketers.
"Marketers should target these different consumer groups with different types of explanations," said Steven Sloman, a study co-author and professor of cognitive, linguistic and psychological sciences at Brown University.
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How Much Product Information Do Consumers Want?