We almost always buy in the same shops

Consumers are a lot more predictable than they seem. This is the main discovery of an international scientific study, in which the Universidad Carlos III of Madrid (UC3M) has participated, which reveals how to predict people’s shopping patterns.

This research study attempts to identify just how predictable we consumers are with respect to shopping patterns. As explained by one of its authors, Esteban Moro of the Department of Mathematics at UC3M, “the main conclusion we have drawn is that people’s behavior is repetitive when it comes to visiting and spending in shops, and as such it is possible to have some success in predicting where we are going to buy in the future”. Published in Scientific Reports, the open journal of the Nature group, the study was also produced by scientists from the Universidad Autónoma de Madrid, the University of California in San Diego (U.S.A), M.I.T (Massachusetts Institute of Technology) and NICTA (Australia).

In order to carry out the study, researchers analyzed hundreds of thousands of de-identified economic transactions made with credit cards on both sides of the Atlantic. The goal was to find the ´predictability’ of the time series of consumption in almost a year’s worth of credit card purchases made by more than 50 million accounts. “What we found”- the researcher points out- “is that people are quite regular when visiting (and purchasing in shops and that there is quite a bit of ´predictability’, above all in the long term”. To put it another way, it is difficult to predict where your next purchase will be on the basis of where you are doing your shopping now. However, as Professor Moro indicates, it is possible to know with a fair degree of probability where you will go shopping during the next month. In short: we go back to the same shops with remarkable regularity.
As pointed out by the researchers, the study has various applications that range from geomarketing (marketing in specific areas of the city), provision of points of sale, locating cash tellers or detecting fraud. There is still not enough information available to the researchers as to whether this data can be extrapolated to cash operations.

Over the past few years there has been a good deal of research on the ‘predictability’ of social behavior. By using different data sources (telephones, Wi-Fi points, GPS data, etc.), many groups of scientists have studied how predictable our mobility is- that is, the routes, walks and places that we use to move about in the city. While this mobility is determined by the tasks we have to carry out throughout the day (going to work, going home, etc.), there are also many variables throughout the day that are not completely predictable (where to, take out money, etc.). As Esteban Moro puts it, “our goal was to try to observe to what extent this ‘predictability’ also exists in economic decisions (how much and where I use the credit card). Although they are conditioned by our daily mobility, these decisions have a completely different dimension.”

o

We almost always buy in the same shops

The Rational Consumer

Does the rational consumer exist, or is shopping just a result of chemical reactions?

o

The Rational Consumer

Hubspot Magazine May/June 2013

Read it for free by clicking here.o

Hubspot Magazine May/June 2013

Our Futures Look Bright

People believe they’ll be happy in the future, even when they imagine the many bad things that could happen, because they discount the possibility that those bad things will actually occur, according to a new research published in Psychological Science, a journal of the Association for Psychological Science.

“I’ve always been fascinated by the changeability of people’s perceptions of happiness,” says psychological scientist Ed O’Brien of the University of Michigan. “On some days our futures seem bright and exciting, but on other days the same exact future event can feel stressful and terrifying.”

With this new research, O’Brien wanted to explore whether fluency — how easy or difficult it feels to think about different events — might play a role in how people think about well-being.

He conducted five studies, asking participants to complete online surveys with questions that addressed past and possible future experiences and perceptions of well-being.

In line with previous research, fluency amplified the effects of past events on participants’ reports of well-being: The easier it was for people to generate positive past experiences, the happier they said they were in those times. Likewise, the easier it was to come up with negative past experiences, the more unhappy people said they were.

But, in an interesting twist, this trend did not hold true for future experiences.

While thinking about positive future events was still correlated with people’s predictions of future happiness, thinking of negative future events didn’t have the corresponding effect — easily imagining negative possibilities didn’t sway people to believe that they would be unhappy in the future.

“People seem to ‘explain away’ the presence of bad possibilities, thinking that they won’t really occur,” explains O’Brien. “But they have a harder time explaining the absence of good possibilities. The absence of good events in our future feels much worse than the presence of bad ones.”

That doesn’t mean bad things can’t happen to our friends, though. When participants were asked to imagine events and happiness for one of their close friends, they predicted that negative events would have a significant effect on their friend’s well-being.

Having to recall many positive events was more difficult than having to come up with only a few, and participants’ happiness ratings reflected this: People who were asked to recall twelve past events gave lower ratings of happiness for that period than people who were asked to recall only three experiences.

“Once you struggle to think about the good things, your life seems a lot less happy,” says O’Brien. “Ironically, trying to think of ten good things that could happen to you and struggling with that list may be worse for your wellbeing than thinking about only two good things without any problem.”

But, just as before, the trend didn’t apply to negative events: There was no difference in predicted happiness whether participants were asked to think about three or twelve negative events.

These findings suggest that, when it comes to negative events in the future, fluency doesn’t seem to matter — people expect that experiencing a few negative events is just as unlikely as experiencing many negative events, and they discount the likelihood that the experiences will occur at all.

O’Brien hopes to continue this research, looking for individual differences in the patterns, and also applying them to other domains such as consumer behavior: “Think about the counter-intuitive implications for increasing real buying behavior and customer satisfaction — maybe customers should be asked to consider all the bad things that could go wrong with the product they’re about to buy, rather than the good.”

Ultimately, these findings have implications for how we think about what makes us happy.

“Anecdotally, many people endorse the belief that more happiness in quantity yields more happiness in quality. But these findings suggest that struggling to think about many happy aspects of your life can yield less happiness than easily imagining the negative aspects,” O’Brien concludes.

o

Our Futures Look Bright

Why humans are notoriously incapable at predicting future events...

Why humans are notoriously incapable at predicting future events...

o

Why humans are notoriously incapable at predicting future events...

No Regrets: Close That Menu and Enjoy Your Meal More

Certain physical acts of completion provide consumers with a sense of closure that makes them happier with their purchases, according to a new study in
the Journal of Consumer Research.
“Choice closure, the psychological process through which consumers perceive a decision as complete and stop reassessing their choice, can increase satisfaction with decisions involving many alternatives. Subtle physical acts that symbolize closure can trigger choice closure and increase satisfaction,” write authors Yangjie Gu, Simona Botti, and David Faro (all London Business School).
After making a purchase, consumers often revisit their decision and think about other options that were available. This tendency can lower satisfaction with a decision, especially when the choice is a difficult one.
In a series of studies, consumers were asked to choose from a large selection of products (chocolates, teas, biscuits) and then either performed or didn’t perform a physical act of closure. In one study, consumers were asked to choose one of twenty-four chocolates displayed on a tray covered by a lid and then either put the lid back on the tray or not before eating the selected chocolate. In other studies, consumers chose an item from an extensive menu and either closed the menu or not before tasting the chosen item. Consumers who closed the lid or the menu liked what they ate more than those who didn’t perform an act of closure.
Not all acts of completion are equally effective in facilitating choice closure. For example, acts of closure performed by the decision maker after making a choice are more likely to lead to choice closure.
“Consumers are less likely to be satisfied with a purchase when they compare it to other options. Physical acts of closure enable consumers to perceive a difficult decision as complete and limit their tendency to compare their selection with the options they have rejected. Since such comparisons tend to be unfavorable, closure triggered by acts of closure will increase consumer satisfaction when there are many choices,” the authors conclude. 

o

No Regrets: Close That Menu and Enjoy Your Meal More

High-resolutions scans + motion sensors = virtual fitting room

o

High-resolutions scans + motion sensors = virtual fitting room