Boots

In a similar vein to Salt and Oats I noticed something in the local Boots pharmacy earlier today...

The seated waiting area is directly facing a shelf full of products. So, what products do you think Boots would place in pride of place for people to stare at while they waited? Chocolate bars? Soft drinks?

Oh no, it was actually pregnancy tests!

If you are going to buy a pregnancy test, surely you have decided before you arrive at the pharmacy. Is sitting opposite one going to make people buy them? Surely sitting opposite food and drink will create a better return?

But maybe I am wrong, maybe sitting opposite pregnancy tests will make women think "Oh golly, what if I'm pregnant? I'd better check just in case." Maybe I underestimate the power of suggestion. Perhaps Boots know exactly what they are doing...

Salt And Oats - Fire Coming Out Of The Monkey's Head

Sailing on the Norfolk Broads is both a wonderful and totally unique experience. We cruise around beautiful rivers and lakes in 1930s yachts, enjoying getting away from the world. Every now and then, however, we have to stop at outposts of civilisation for supplies. Ludham Bridge Stores is one such outpost. It is almost the dictionary definition of a monopoly; the nearest competitor is at least half a day by sail. So improving their shop using behavioural economics probably isn't a high priority for the owners, but I humbly suggest that they might be able to increase their profitability somewhat...

The first thing you see as you enter the front door is salt and oats. Right in your face. At eye-level. About 50cm from your face.

Now, I'm fairly confident when I say that salt and oats are the exact opposite of 'impulse buys'. No-one ever in the history of humanity has ever walked into a shop, seen some salt, and thought to themselves:

"Oooh... That might nice..."

Why? Because people know whether they need salt or not. They have either run out of salt, in which case they will buy it wherever you put in the shop, or they have not run out of salt, in which case they will not buy it.

It's a fairly similar story with oats.

And, worse than wasting the prime spot in the shop to get people to buy something on an impulse (like, say, an ice-cream) you have, in one fell swoop, changed the consumer journey. They will now be thinking:

"Oh, I don't need salt... What do I need?"

By getting people to think about what they need rather than what they would like, Ludham Bridge Stores probably sells fewer ice-creams and other such-like impulse items.

After saying all this as I stood with friends at the entrance to the shop a few weeks ago, I was told to shut-up, hurry-up and just buy something by my mates. Such is the life of a behavioural economist.

Ludham Bridge

Recommended listening:
Fire Coming Out Of The Monkey's Head by Gorillaz

Mood Matters – Feeling Good

http://www.techno-lovers.com/wp-content/uploads/2012/05/Samsung-Patented-Emoticon.gif

A recent Facebook conversation got me thinking.

My friend had just done the Common Ratio Effect experiment (see previous blog: Are You Consistent? - Mad World), and was pleased that she had been consistent. However in relation to her answers, she noted that:

“lol... depends on circumstances...”

Which is true. Our answers one minute may vary wildly from the next minute. One day we may be feeling positive and more prone to taking risks, another day we may be more conservative and risk-averse. 

So, therefore, aren’t experiments a load of rubbish? Surely they can’t capture human behaviour accurately, because human behaviour is inherently dependent on our mood?

However, economists solve this problem by repeating the experiments on lots and lots of people (and use different experiments to see if phenomena are ‘robust’). Thus any mood variability should balance out over large populations. And remember, economists test to see if an aspect of behaviour can be shown to be systematic among us humans which does not usually require literally everyone to exhibit it. Anomalies are allowed. It does not matter if you answer differently according to how you feel because an experiment will never rely on your answers alone.

There are other criticisms of experiments (which will have to wait for another blog), but the “it all depends on how I feel” objection, while being absolutely correct, does not actually challenge the validity of experiments.

Recommended listening:

Feeling Good by Nina Simone