Tuesday, March 31, 2009

Millward Brown's Nigel Hollis attacks "voodoo" research

Research has come under attack recently. People have been citing neuroscience, cognitive psychology and behavioural economics learning that suggests much of what we do is rubbish.

Who will defend the status quo?

Who better than that standard bearer of normative data, that bete noire of every shaven headed, trendy spectacle wearing, Mark Earls reading account planner? Step forward Nigel Hollis of Millward Brown.

His latest post here attacks "Voodoo" research and defends the tried and er pre-tested (a little MR humour). And this is about as direct as a genteel and collegiate British researcher gets. Attacking the journalist but taking indirect aim at the Advertising Research Foundation.

I posted below that Joel Rubinson of the ARF had gone outlaw like Waylon and Willie. Millward Brown is the Grand Ole Opry and Mr. Hollis our Porter Wagoner.

OK, the country music analogy is probably done now. But what's important is that it's on.

Is Martin Lindstrom for Real?

I was alerted to this guy by his very disappointing book Buyology.

Now he appears again telling us about some more groundbreaking research. Yes, it's the first time the brain has been monitored while shopping! Well, except this time maybe.

So I guess you are all excited to find out the earth shattering insights that this groundbreaking experiment uncovered.

Let's see ....

  1. Discounts make shoppers change their minds
  2. Emotions sometimes outweigh 'rational' price considerations.
  3. Freshness is important

Am I on candid camera?

Monday, March 30, 2009

Digital Social Shopping and "Reason"

The topic of online shopping is so vast I have been kind of avoiding it. Partly because nothing I have to say about it fits into a blog post.

But one aspect of online shopping has been getting a lot of attention recently – the use of it as a mechanism for seeking discounts. Here is a survey that reports that 40% of Americans are spending more time comparing prices online.

Of course there is plenty of online price checking, discount seeking and reading of customer reviews to gain reassurance on purchases. These activities lead to the general perception that the Internet provides the discipline of computerized “reason” to our irrational and emotional urge to buy.

This thinking can be misleading for a number of reasons.
  • Firstly, the idea that online shopping or investigating purchases online sits in contrast to ‘impulse purchasing’ is not necessarily true. Of course it is possible to impulse purchase online. My wife constantly impulse downloads 80’s tunes from iTunes that she runs across.
  • And while the bulk of online activity may be about saving / reassurance some is also about indulgence. Consider the difference between the kind of social shopping sites that consumers use to compare prices with ThisNext. This site is the ultimate social shopping forum for those who are not looking for bargains but are looking to share enthusiasm to consume. The goals of users of ThisNext (who are 80% female) are hardly comparable with the users of Red Tag Deals or even Epinions.

We found that two groups of Canadian shoppers are the heaviest users of flyers – the most price sensitive and the least price sensitive. The former are looking for deals. And the latter are looking to enjoy consuming and the flyer was a means of doing that. It is wrong to assume that flyer use or online comparison or digital social shopping is motivated by a strictly ‘rational’ urge to seek discounts.

Related to this is the idea that even if consumers are using online tools to make “better” shopping decisions a recent post by Jonah Lehrer questions whether they are achieving their goal. He points to a published paper in the Journal of Consumer Research by Leonard Lee, Dan Ariely, and On Amir regarding decision-making implies that the slow rational, deliberate approach to decision making that you might use if you are shopping on-line does not produce “better” decisions than the fast, emotional, instinctive approach that you might use in a store.

Sunday, March 22, 2009

Recession turns Americans into Canadians

Cautious, risk averse, dismissive of ostentatious consumption and luxury, distrustful of big business, cynical about individual success, collectivist, accepting and even grateful for government intervention and regulation.

One result of this recession is that it may start making Americans look like Canadians.

Shopping Trip Type Influences Price Sensitivity

Part of the Environics Mental World of the Shopper study looked at the difference in attitude and behaviour to price for certain categories based on last purchase. We also asked on what kind of trip that purchase occurred.

Notable is the fact that sensitivity to price differs according to trip type for some categories. Coffee is most likely purchased on a stock up trip - but about a quarter of coffee purchases are on quick trips. The table above shows considerable differences in sensitivity to price depending on this context.
Thing is that it is not consistent between categories. Those buying frozen meals are more sensitive to price on a quick trip for example. Intuitively that makes sense. A frozen meal on a quick trip is probably the trigger and a focus of the mission. On a stock up trip it might be impulse at the end of the shop.
And adding to the complexity, it differs by demographics. Males buying potato chips on a quick trip are the least price sensitivity.
As far as I am concerned this supports the notion that researching pricing or even concept testing without understanding the context and process of purchasing the product is misleading. If you are asking discrete choice questions or purchase intent questions with no knowledge of the purchase process you are missing half the picture.

Wednesday, March 18, 2009

Is more rubbish research one of the consequences of the recession?

Is it just me or is anyone else finding that every day there is a press release on some new banal and useless research findings about consumer behaviour in the recession?

I just put down a marketing magazine that provided on page 10 such insights as - "Cool" scored lower than "cheap" and "inexpensive" in what kind of message would make 13 to 29 year olds pay attention to an ad.

Question: Has "cool" been rated more important than "cheap" or "inexpensive" by consumers in any survey ever? No. So why report it?

The same magazine tells me on page 35 that 95% of Canadians believe that "better value for money" is important when buying products.

And then some blather on "austerity chic" on other pages.

It is bad enough that the recession slices our savings in half, puts our jobs in jeopardy without also subjecting us to this rubbish.

Message to my fellow researchers: I know it's nice to see your name in a magazine but please stop putting out this stuff. It makes people think we're...well, useless.

Thursday, March 12, 2009

Research Reinvented

Joel Rubinson of the ARF does Willie and Waylon and goes a little outlaw on the future of research here.

Good stuff.

Good Stuff from Unilever on Shifts in Shopper Behaviour

Great presentation from Unilever via Retailwire on actual changes in shopper behaviour due to recession in the US.

The seven distinct patterns of CPG shopping give a good framework to understanding category shifts and avoiding generic "consumers are cutting back on ...." concepts.

Wednesday, March 11, 2009

Why is social media called "media"?

Looking up "definitions of media" on Google I find many different ones. But they all have the same tone and talk about "Messages that are distributed"..."means of providing information and instructions"..."transmission tools".

Which makes me wonder why people call social media, "media". Nobody is distributing or providing anything. People are just talking to each other.

No wonder marketers are scratching their heads. They've been told this thing is "media" when in fact it isn't. But they're trying to understand why they cannot broadcast through it.

I think I'm a bit late to this. But this blog is about shopping.

Saturday, March 7, 2009

Shopping and Dopamine

I am really enjoying the latest book by Jonah Lehrer : "How We Decide" (an excellent kind of Idiots Guide to neuroscience and decision-making).

I have also been reading his blog on neuroscience that has a few posts on shopping and the brain.
Essentially the act of shopping is pleasurable because when someone is seeing something they desire the nucleus accumbens (NAcc) floods the brain with dopamine. This is what urges people to buy.

This is essentially why sadness increases the likelihood of purchase. Shoppers attempt to offset sadness by increasing this pleasure. And this is why shopping, like gambling can be addictive.

Increasing desire is a basic function of all marketing and retailing. And many marketers and retailers understand that anticipation is an important element of the shopper or consumer experience. Again, the actions of the brain guarantee this. The most intense NAcc activity is not during consumption or after purchase but before purchase. Once an item is acquired the shopper is likely to experience 'dopaminergic adaptation' so the rate of NAcc activity decreases and pleasure declines. This is one of the reasons that the shopper can feel a sense of regret after purchasing.

Of course this is not just about shopping. The Buddha observed the same nature of desire - hence his pronouncement that trying to fulfill desire is like trying to slake thirst with salt water (or something like that).

It is fairly obvious that desire drives the urge to shop. But as I have noted before, this desire is mitigated by the hip-pocket nerve - or in neuroscientific terms, the insular cortex. Just as the NAcc makes the shopper feel good when the item is anticipated, the insular cortex delivers feelings of fear when the price is introduced.

Jonah Lehrer's conclusion is that retailers need to mitigate the sense of loss that activates the insula cortex. Of course that's what salespeople have been attempting since time began. I realise he is not entirely serious as he ventures out of his area of expertise into marketing and retailing but blunt discounting is one way but certainly may not be the most effective way - or the most profitable.

Neuroscience and behavioural economics certainly shed light on shopper behaviour. Although the conclusions are hardly earth shattering for marketers or retailers - who know all too well that increasing desire and decreasing reluctance to buy is their job. What it does show us is how much of the shoppers' evaluation is 'non rational'. It was previously assumed that desire was somehow 'emotional' and resistance was a rational function of careful evaluation. As a result, brand marketing was given the task of increasing desire through emotional messages and retailing then attempted to cater to the shoppers' 'reason'. In fact both are 'emotional' - and that does have implications for shopper marketing and retailing in general. More on that in the next post...

Thursday, March 5, 2009

Bad Reporting

This article from Ad Age is bouncing around. The headline "Trouble in Store for Shopper Marketing?" is really misleading.

Firstly, "shopper marketing" does not just refer to "in store marketing" or POP. Secondly, even it it were, the fact that impulse purchasing is declining does not make it less important, it probably makes it more important. And certainly the fact that people are putting more thought into their purchase decision does.

But the biggest mistake is the notion that the economy is having dramatic impact on the fundamental nature of consumer decision-making. Unless it is overturning the result of evolution on the human brain over the last million or so years.