When in Italy, my father-in-law has a proven technique for finding the best wine in the supermarket: By checking which shelf is the emptiest, he knows which wine is being drunk by the locals and thus is the best to get at that moment. In other words, he gladly uses the scarcity principle when being confronted with many choices in a fairly new and uncertain environment.
Current Topic: Strategy
We live in a returns culture, where delivery is free and so are the returns. Zero shipping fees and favorable in-store return policies make it very attractive to bulk buy products consumers don’t need. When consumers return their purchases, it causes losses for the companies due to extra logistical and repackaging costs. An increasing amount of returns have a negative impact on the environment too.
Marketers should strive to reduce the returns to save costs and reduce the adverse footprint on the environment. A recently published study has discovered a simple yet highly effective technique companies can use in this regard.
Going to a liquor store or standing in front of a shelf in the supermarket might sometimes be a little overwhelming. All products are screaming for your attention and it might be hard to pick the right product from the different designs and product sizes.
If you need to buy a running T-shirt, which one would you choose? One with a solid, neutral color or one with a bright, colorful pattern? Which choice will give you more satisfaction one year later?
Research has found that our buying decisions are often inconsistent with what we prefer in the long run. Most people tend to choose T-shirts with a simple design and a neutral color, believing they would be happier with their choices later. However, in reality, people experience more long-lasting satisfaction with bolder, attention-catching designs and colors.
A box of chocolates weighs 500 grams. The hotel is only a 400 meter walk away from the center. The mansion is over 6,000-square-foot big. From weight to size or distance; customers are constantly exposed to quantitative information in their decision making.
However, as it turns out, our brain is awful at processing this quantitative information. We prefer information to be more discrete and sparking the imagination, say a box of 10 chocolates, a hotel that’s only a 5-minute walk away from the center, or a mansion of 10 bedrooms…
This finding applies to other quantitative information as well and has intriguing implications for nudging consumer behavior both for marketeers as well as public policy makers.