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When demand spikes on Uber, prices go up, sometimes as high as 8X and 9X normal. Sure, "surge pricing" lets Uber capture more money in times of peak demand, but it also incentivizes more Uber drivers to get on the streets to meet that demand. And as supply of cars goes up, the surge pricing comes back down.
One really interesting nugget shared on NPR's Hidden Brain: people are more willing to hire an Uber when the price is 2.1X normal rates than when it's 2X. The explanation is that the round 2X rate feels arbitrary, as if the company is just jacking up prices to gouge riders, whereas the 2.1X rate feels like there must be some complex algorithm at work that has calculated a "fair" price for a car during the demand peak.
"Precise" pricing doesn't always work: on eBay, round-digit items ($50) sell quicker than off-digit ones ($49).
The human brain is sometimes hard to predict, which is why it's always important to run controlled experiments to see what really works in market.
Shopping lists are a highly talked about topic in the retail space. Retailers and brands alike seek to have their products put on a shopper’s list. This all starts with understanding the planning and list-making process. But it should also include an understanding of how to drive impulse when you don’t actually make it onto the list. In fact, our most recent study found that, though shoppers use shopping lists to help guide their purchases, almost all shoppers still make at least one impulse-purchase decision while shopping.
This study also looks at who is actually doing the shopping. Traditionally, shopping, especially household shopping, has been viewed as a task conducted most often by women. In today’s ever-evolving world, is this still the case? Find out the answer to this question and more by clicking here to read the newest Shopping-List Edition of The Checkout.
It was announced this week that retailing giant has received approval for a patent on self-driving shopping carts. These carts will be equipped with both a motor and a video camera. While the Internet-of-Things has been a huge buzz for some time now, most of the attention at the retailer level has been focused on things like mirrors that shoppers virtually try on clothes or test out makeup without having to actually apply. Shoppers continue to be wary of smart devices that, in theory, should enhance their shopping experience. Will self-driving shopping carts also make shoppers wary?
The store of the future is just around the corner, and it has started to materialize today, thanks to now-ubiquitous technologies like the smartphones in our pockets and the online shopping tools we tend to take for granted, like ratings and reviews and product recommendations.
Shoppers have not only grown accustomed to these tools, they’ve gotten so used to them in their shopping experiences that it would be strange and disappointing not to have them.
So when a recent study suggested that some of the more futuristic elements of the store of the future were a bit too “creepy” for shoppers today, it’s good to remember that most consumers don’t really know how they’ll embrace a technological advancement until they get to experience it in their everyday lives.
Apple doesn’t use focus groups. If they did, they would never have built the iPhone without a physical keyboard or the MacBook without a DVD-ROM drive or the recently announced AirPod headphones without a wire. And shoppers of today are in no better position to tell retailers what technologies they’d find useful in stores of the future than Apple focus group participants would have been.
Ads are always designed to sell something but tracking whether or not they actually led to a sale can be tricky sometimes, especially when they are social media platforms.
And now Facebook, of all platforms, is about to change all that.
Now Facebook ads can include interactive maps of store locations to help shoppers find the physical store. In addition, advertisers will be able to track views to physical visits.
Snapchat, too is getting in the mix and added several executives earlier this May to manage their ad tracking partnership developments with Oracle and Google.
Some things just immediately cue summer and ice cream is most definitely one of them! But with ice cream being such a common sign of the season, how does an ice cream brand stand out? For Magnum ice cream, they married the behavioral principle of scarcity with a shopper expectation of customization and it seems to be working.
This summer, Magnum ice cream created a seasonal pop-up shop in New York's trendy SoHo neighborhood. Taking over an empty retail space, they designed a premium environment that provided shoppers with an interactive and exciting experience while also connecting the superiority of their ice cream. Themed as "The Art of Magnum," shoppers were able to personalize their ice cream bars by selecting the dipping chocolate, choosing their own toppings, and then drizzling more chocolate over their own personal masterpiece. They even had designed backgrounds where shoppers could artfully display their creations. The catch is that it's here for the summer only, creating a sense of urgency for shoppers to get there before summer's end. With a line out the door, Magnum's pop-up shop is definitely a must-see spot.
Image Credit: Integer ShopPic
This week’s announcement of Stone Brewing opening a hotel that offers guests a complete craft beer experience has me thinking about the booming experience economy. At the hotel, guests will be treated with a complementary beer and will fill their pints throughout their stay with various Stone beers on tap, including special releases and unique casks. Guests will not only have access to typical hotel amenities like room service, but will also be treated to in-room growler delivery service. Experiential marketing is not new, but the idea of making an immersive and permanent vacation-like experience is a relatively new iteration of it. The move highlights that experience, above all else, is the means to affinity.
As trail blazers in the experience economy, more than three in four Millennials prefer to spend their money on an experience or an event instead of buying something tangible (Forbes, 2015). And this trend isn’t just a Millennial one. Consumer spending on experiences relative to total US consumer spending has increased by 70% in the last 20 years (Forbes, 2015).
Like an ice cream truck rolling through your neighborhood, this month's Urbanist is dishing out refreshing retail treats to get you through the dog days of summer. In this month's issue you can read about:
- Hong Kong's Stock Market Inspired Beverage Pricing
- Ford's New Test Drive Experience
- Lululemon's New Store Format, The Lululemon Lab
- MikMak Minimercials, The Evolution of The Infomercial
- KFC's Watt Box
Brands like Porsche, BMW, and others are opening and operating extensive experiential testing sites. Gone are the days of gentle test drives around the parking lot of a dealership while a salesperson meekly points out the improved air conditioning features included in your Prius. These “Experience Centers” let consumers test drive high-end models of cars along professional tracks with an instructor in the passenger seat educating you on how "test your limits to maximum speed”. They range in cost from three hundred to eight hundred dollars for a single session. Patrons are taken through an instruction course and then allowed to test out the cars.
This practice is especially effective in the way it works to bridge the gap between the luxury affluent consumer group and a demographic that is fiscally below what BMW usually targets. Despite the differences, any consumer can still get the experience of driving a BMW.
Every year, back-to-school (BTS) seems to be the same old routine but at the same time it also seems so very different. This issue of The Checkout examines the recurring themes and nuances of the BTS shopping season.
The study defines price to be the season's table stakes. Price is not only a recurring table stake for the season but it is a desire and focus that has molded many retailer and shopper behaviors. But that does not mean that all shoppers are the same nor that price is the way to win–it is just the cost of entry.
The study also outlines the nuances of how men and women shop and the impact of kids on shopping decisions. Did you know that men are more likely to shop earlier than women for BTS? Or that younger students have a greater influence on shoppers than older students?
If there's an occasion or event coming down the pipeline, you can bet your bottom dollar that the onslaught of thematic advertising is soon bound to follow. Nowadays, we've all grown pretty accustomed to the topical communications that sprout up from marketers during these key time frames. Whether it's for a traditional holiday (Valentine's Day, Father's Day) or the lesser-known yet socially revered National X Day (National Siblings Day, National Puppy Day), many brands have become experts at leveraging these moments as an opportunity to spark a conversation.
The underlying hope is that these marketing strategies create some top-of-mind awareness, an authentic connection, and that they ultimately lead to purchase. Most of the time, this can be a really effective tool. But what happens when we're all shouting the same thing at the same time? Will the communal and authentic spirit of the Olympic Games be able to shine through? Or does it come across as nothing more than a series of carefully premeditated machinations? This year, new policies put in place by the Olympic Committee could severely curb the oversharing frenzy of brands.
Recently, the subject of empathy has been on my mind. As brands and retailers work to establish long-lasting connections with consumers and shoppers, empathy seems to be falling by the wayside. While that might sound like a harsh blanket statement, the fact is that, lately, businesses favor innovation and chasing trends more so than creating meaningful pieces of content that spark an emotional connection.
Think back to P&G’s powerful "Thank You, Mom” or Dove’s “Real Beauty” ad campaign. Why were these so successful? Because both of these campaigns were compelling and influential pieces of storytelling. To this day, they spark an immediate emotional response. As marketers, we spend so much time talking about the power of the human connection, yet even the way we talk about it seems to be devoid of basic human language---for example, “targets, users, and consumers.”
Marvel has been killing the game lately with its multitude of media ranging from kids' shows, to Netflix series, to box office spectacles. They have been able to connect with a wide-ranging audience through producing a good deal of quality content. This investment in quality has worked to assemble an avenging empire that will last for the foreseeable future. People love Marvel. Lots of people love Marvel. So many people love Marvel that the lines separating the true fans from the bandwagoners have diffused. Comic books only just got cool again and While there are those who think their beloved company has sold out… Marvel has turned the tide.
Mutant carrot or a coveted part of your next meal? Ugly isn't supposed to be cool. It's not very marketable. And only when ugly takes off its glasses and everyone realizes it was beautiful all along does ugly really become a great story. Well today, ugly is taking center stage and is culturally ripe for success. Pun intended, as fruits and vegetables are the place ugly is starting it's rise.
Over the last several months, ugly fruit fever is spreading. Efforts by Ralph's and WholeFoods have provided cosmetically challenged fruits and vegetables to shoppers at discount prices. Food service companies, such as Bon Appetit Management Co., have also started programs designed to buy up uglies and use them in meals across the country. Even America's largest grocer, Walmart, this week will pilot discount sales of weather-dented apples in 300 of its Florida stores.
Click to learn more about the role of shopping lists for today's shopper