1. Study suggests eye-catching labels may stigmatize many healthy foods

    October 20, 2017 by Ashley

    From the University of Delaware press release:

    When customers walk down aisles of grocery stores, they are inundated with labels such as organic, fair-trade and cage free, just to name a few. Labels such as these may be eye-catching but are often free of any scientific basis and stigmatize many healthy foods, a new University of Delaware-led study found.

    The paper published recently in the journal Applied Economics Perspectives and Policy examined the good, the bad and the ugly of food labeling to see how labels identifying the process in which food was produced positively and negatively influenced consumer behavior.

    By reviewing over 90 academic studies on consumer response to process labels, the researchers found that while these labels satisfy consumer demand for quality assurances and can create value for both consumers and producers, misinterpretation is common and can stigmatize food produced by conventional processes even when there is no scientific evidence those foods cause harm.

    For the poor, in particular, there is danger in misunderstanding which food items are safe, said Kent Messer, the study’s lead author and the Unidel Howard Cosgrove Career Development Chair for the Environment.

    “That has me worried about the poor and those who are food insecure,” said Messer, who is also director of the Center for Experimental and Applied Economics in the College of Agriculture and Natural Resources. “Because now you’re trying to make everything a high-end food choice and frankly, we just want to have healthy food choices, we don’t need to have extra labels that scare away people,”

    Process labels, by definition, focus on the production of a food, but largely ignore important outcomes of the process such as taste or healthiness. According to Messer and his study co-authors, policy changes could help consumers better understand their choices. They argue governments should not impose bans on process labels but rather encourage labels that help document how the processes affect important quality traits, such as calorie count.

    “Relying on process labels alone, on the other hand, is a laissez faire approach that inevitably surrenders the educational component of labeling to mass media, the colorful array of opinion providers, and even food retailers, who may not always be honest brokers of information,” the researchers wrote.

    The Good

    With regards to the positive impact process labels have on consumers, Messer said that consumers are able to more freely align their purchasing decisions with their values and preferences.

    If, for example, a consumer wants to buy fair trade coffee, they are able to do so with greater ease.

    “The good part is that process labels can help bridge the trust between the producer and the consumer because it gives the consumer more insight into the market,” said Messer. “New products can be introduced this way, niche markets can be created, and consumers, in many cases, are willing to pay more for these products. It’s good for industry, consumers are getting what they want, and new players get to find ways of getting a higher price.”

    The Bad

    The bad part is that consumers are already in the midst of a marketplace filled with information that can be overwhelming because of the sheer amount of product choices and information available.

    In addition, when most consumers go to buy food, they are often crunched for time.

    “Human choice tends to be worse when you put time constraints on it,” said Messer. “Maybe you’ve got a child in the aisle with you and now you’re adding this new label and there’s lots of misinterpretation of what it means. The natural label is a classic one which means very little, yet consumers assume it means more than it does. They think it means ‘No GMO’ but it doesn’t. They think it means it is ‘organic’ but it isn’t. This label is not helping them align their values to their food, and they’re paying a price premium but not getting what they wanted to buy.”

    Messer said that another problem are “halo effects,” overly optimistic misinterpretation of what a label means.

    “If you show consumers a chocolate bar that is labeled as ‘fair trade’, some will tell you that it has lower calories,” Messer said. “But the label is not about calories. Consumers do this frequently with the ‘organic’ label as they think it is healthy for the consumer. Organic practices may be healthier for the farm workers or the environment, but for the actual consumer, there’s very little evidence behind that. You’re getting lots of mixed, wrong messages out there.”

    The Ugly

    Like halo effects, the ugly side of food processing labels comes into play when labels sound like they have a positive impact but really have a negative one.

    A label such as “low food miles” might sound nice but could actually be causing more harm than good.

    “Sometimes, where food is grown doesn’t mean that it’s actually the best for climate change,” said Messer.

    Hot house tomatoes grown in Canada, for example, might have low food miles for Canadian consumers but it’s probably far better environmentally — because of all the energy expended in creating tomatoes in an energy intensive hot house in Canada — to grow the tomatoes in Florida and then ship them to Canada.

    “If you just count miles and not true energy use, you can get people paying more money for something that’s actually going the opposite of what they wanted which is to get a lower carbon footprint,” said Messer.

    He added that the ugly side of food labeling is that a lot of fear is being introduced into the marketplace that isn’t based on science.

    “When you start labeling everything as ‘free of this’ such as ‘gluten free water,’ you can end up listing stuff that could never have been present in the food in the first place,” Messer said. “These ‘free of’ labels can cause unnecessary fear and cast the conventionally produced food in a harsh, negative light.”

    Since the vast majority of the food market is still conventionally produced and is the lower cost product, there is a danger in taking that safe food and calling it unsafe because of a few new entrants into the food market.

    Messer also said that there is evidence that food companies are getting worried about investing in science and technology because they don’t know how the consumer is going to respond or how marketers are going to attack their food product because it’s new and different and therefore, can be labeled as bad or dangerous.

    “We’ve got a lot of mouths to feed in our country and around the world,” Messer said. “We are currently able to feed so many because of advances in agricultural science and technology. If we’re afraid of that now, we have a long-term impact on the poor that could be quite negative in our country and around the world. That’s when I start thinking these process labels could really be ugly.”


  2. Marketing study examines what types of searches click for car buyers

    October 19, 2017 by Ashley

    From the University of Texas at Dallas press release:

    When making important purchase decisions, consumers often consult multiple sources of information.

    A new study from The University of Texas at Dallas examines how consumers allocated their time when searching offline and on the internet as they shopped for a new automobile, and what the outcomes were for price satisfaction.

    Dr. Ashutosh Prasad and Dr. Brian Ratchford, marketing professors in the Naveen Jindal School of Management, recently published the study online in the Journal of Interactive Marketing. It will appear in the journal’s November issue.

    “Our data says that it’s very common for a person to spend time searching online and offline prior to making a big purchase,” said Ratchford, who holds the Charles and Nancy Davidson Chair in Marketing.

    “The same information is available both places for the most part — whether it’s a manufacturer’s website or a brochure at the dealer. It’s just a matter of which one a person is more comfortable accessing.”

    Over the long term, consumer searches have been moving online, Ratchford said. It’s more convenient, and consumers can do more on the internet than before, such as take a virtual test drive or configure a vehicle according to their preferences.

    By analyzing survey data on automobile purchases between 2002 and 2012, the researchers compared time spent on internet sources with time spent on offline sources, such as car dealerships.

    Generally, those who search more online tend to spend more time with offline sources, the study found. In contrast, previous studies looked at the internet as a substitution for offline sources.

    The analysis also revealed insights into buyer demographics and the impact of national brands, Prasad said.

    Consumers older than 50 spend less time searching, both online and offline, before making a vehicle purchase, according to the study. Many people don’t search at all. They merely buy the same type of automobile they already had.

    “Men were more likely to search online comparison websites than women,” Prasad said. “Married consumers spent more time at dealerships and were more likely to be satisfied with the price paid. The time spent at dealerships was significantly more for buyers of Korean brand cars versus U.S. brands. Knowing even minor differences in behavior can help fine-tune marketing campaigns.”

    Generally, longer search times were associated with higher price satisfaction — except for time spent at the dealer, the researchers found.

    Ratchford said that finding is possibly related to the price negotiation process.

    “We don’t know exactly why, but chances are they’re spending time trying to get a better deal, and they are getting frustrated,” he said.

    The study also found that time spent on manufacturer websites was less effective at generating price satisfaction, possibly because offline manufacturer and dealer sources, such as advertisements and brochures, perform similar functions. Dealer websites remain important because they list inventory and provide online price quotes, researchers said.

    The study’s results may have practical implications for manufacturers and dealers.

    For example, the use of independent websites was associated with reduced time at the dealer. If dealers could identify those who obtain information online, they could save considerable demonstration time, lowering costs as a result.

    Manufacturers also may want to rethink the content of their websites. According to the study, consumers who searched longer on manufacturer websites reduced their time on independent websites but increased their time on dealer websites. This suggests that more informative manufacturer websites can deter consumers from visiting comparison websites to get information.


  3. Study looks at factors that affect which child parents spend more money on

    October 12, 2017 by Ashley

    From the Society for Consumer Psychology press release:

    Imagine a parent who is shopping and has a few moments to spare before heading home. If the parent has both a son and daughter but time to buy only one surprise gift, who will receive the gift?

    Findings from a new study available online in the Journal of Consumer Psychology suggest that a mother would have a high likelihood of buying something for her daughter, while a father would choose a gift for his son. While more than 90 percent of people in the study said they treat children of different genders equally, researchers discovered that most parents unwittingly favor the child of the same sex when it comes to spending money.

    “We found that the effect was very robust in four different experiments and across cultures,” says researcher Kristina Durante, a professor of marketing at Rutgers Business School in New Jersey. “The bias toward investing in same-gendered children occurs because women identify more with and see themselves in their daughters, and the same goes for men and sons.”

    In one experiment, the researchers recruited participants who had a child of each gender. The participants were told that they would receive a treasury bond of $25 for one of their children, and they could choose who received it. The majority of mothers chose to give the bond to their daughters, while the fathers preferred their sons. To test if the gender bias occurred in a different culture, the researchers conducted the experiment among parents from India, and the results were the same.

    Participants also favored children of their own gender when deciding who would receive more in the family will. The researchers conducted another experiment at a zoo where participants with a child of each gender were given one raffle ticket after filling out a survey. They had to decide whether to enter the raffle for a girl’s back-to-school backpack or a boy’s backpack. Mothers chose the girl’s backpack 75 percent of the time and fathers picked the boy’s backpack 87 percent of the time.

    The findings have implications for children as they are growing up in different families, Durante says. If mothers make most of the decisions about a family’s spending, then daughters may receive more resources such as healthcare, inheritance and investments than their brothers. If fathers are in control of the family finances, then sons may be more likely to benefit in the long-run. This unconscious gender bias may also have ramifications far beyond the family, Durante says.

    “If a woman is responsible for promotion decisions in the workplace, female employees may be more likely to benefit. The reverse may be true if men are in charge of such decisions,” says Durante. “If this gender bias influences decisions related to charitable giving, college savings, promotions and politics, then it can have profound implications and is something we can potentially correct going forward,” says Durante.

    Find more online at: https://www.journals.elsevier.com/journal-of-consumer-psychology/forthcoming-articles/do-mothers-spend-more-on-daughters


  4. Appetizing imagery puts visual perception on fast forward

    October 11, 2017 by Ashley

    From the Association for Psychological Science press release:

    People rated images containing positive content as fading more smoothly compared with neutral and negative images, even when they faded at the same rate, according to findings published in Psychological Science, a journal of the Association for Psychological Science.

    “Our research shows that emotionally-charged stimuli, specifically positive and negative images, may influence the speed, or the temporal resolution, of visual perception,” says psychological scientist Kevin H. Roberts of the University of British Columbia.

    The idea that things in our environment, or even our own emotional states, can affect how we experience time is a common one. We say that time “drags” when we’re bored and it “flies” when we’re having fun. But how might this happen? Roberts and colleagues hypothesized that the emotional content of stimuli or experiences could impact the speed of our internal pacemaker.

    Specifically, they hypothesized that our motivation to approach positive stimuli or experiences would make us less sensitive to temporal details. Change in these stimuli or experiences would, therefore, seem relatively smooth, similar to what happens when you press ‘fast forward’ on a video. Our desire to avoid negative stimuli or experiences, on the other hand, would enhance our sensitivity to temporal details and would make changes seem more discrete and choppy, similar to a slow-motion video.

    To test this hypothesis, Roberts and colleagues used an approach common in psychophysics experiments — estimating relative magnitudes — to gauge how people’s moment-to-moment experiences vary when they view different types of stimuli.

    In one experiment, 23 participants looked at a total of 225 image pairs. In each pair, they first saw a standard stimulus that faded to black over 2 seconds and then saw a target stimulus that also faded to black over 2 seconds. The frame rate of the target stimulus varied, displaying at 16, 24, or 48 frames per second.

    Participants were generally sensitive to the differences in frame rate, as the researchers expected. Participants rated the smoothness of the target image relative to the standard image using a 21-point scale: The higher the frame rate of the target image, the smoother they rated it relative to the standard image.

    The emotional content of the images also made a difference in perceptions of smoothness. Regardless of the frame rate, participants rated negative images — which depicted things we generally want to avoid, including imagery related to confrontation and death — as the least smooth. They rated positive stimuli — depicting appetizing desserts — as the smoothest, overall.

    Most importantly, the researchers found that people perceived images that faded at the same rate differently depending on their content. Positive target images that faded at 16 fps seemed smoother than neutral target images that faded at the same rate. Positive images that faded at 24 fps seemed smoother than both negative and neutral images with the same frame rate. And positive images that faded at 48 fps seemed smoother than negative images at the same rate.

    Further analyses suggest that this effect occurred primarily because positive images elicited higher approach motivation.

    Because the words “smooth” and “choppy” could themselves come with positive or negative connotations, the researchers replaced them with “continuous” and “discrete” in a second experiment. Once again, they found that the emotional content of the images swayed how participants perceived the frame rate of the fade.

    Brain-activity data gathered in a third experiment indicated that the blurring of perceptual experience associated with positive images was accompanied by changes in high-level visual processing.

    “Even when we made adjustments to the instructions and the task structure, the overall effect remained — people subjectively reported seeing less fine-grained temporal changes in positive images, and they reported seeing more fine-grained temporal changes in negative images,” says Roberts.

    Together, these findings suggest that the emotional content of the images affected how participants experienced what they were seeing.

    “What remains to be seen is whether emotional stimuli impact objective measures of temporal processing,” says Roberts. “In other words, do individuals actually perceive less temporal information when they view positive images, or do they just believe they perceive less?”


  5. Study suggests flexibility of mindset determines whether someone judges other based on brands they use

    October 10, 2017 by Ashley

    From the Society for Consumer Psychology press release:

    While it may seem like a given that people judge others by the brand of clothes they wear, the cars they drive and electronic gadgets they use, new research suggests that this may not be the case as often as we think.

    In a study recently published online in the Journal of Consumer Psychology, researchers discovered that people who have what is known as a “flexible mindset” are less likely to judge people based on the brands they use. Individuals with this mindset believe that behavior varies significantly over time and across different situations, so they are less inclined to make assumptions about someone’s character based on brand choice at one point in time.

    “Previous research has supported the idea that people universally form perceptions about others based on brands, but we have shown that it depends on an individual’s mindset about behavior,” says Ji Kyung Park, lead author and a marketing professor at the University of Delaware. Park worked with Deborah Roedder John, professor of marketing at the University of Minnesota, on the study.

    As opposed to those with a flexible mindset, people with more of a “fixed mindset” tend to believe that one’s behavior is consistent over time and across situations, and thus predicts the person’s personality. Park found that people with this mindset were much more likely to make judgements about people based on the brands they used. In one of the experiments, participants viewed a picture of a man driving a car that was either a Mercedes Benz or a car without a visible brand name. They were asked to rate the person on a list of personality traits. Then the participants answered a series of questions that were used to evaluate whether each participant was more partial to a fixed or a flexible mindset.

    The study revealed that participants with a fixed mindset rated the man driving the Mercedes as more sophisticated than the man driving a car without a visible brand name. But the participants with the flexible mindset rated the two men as equally sophisticated. The researchers showed the same effect when participants viewed a picture of a woman eating a box of Godiva chocolates versus a box of chocolates with no visible brand name.

    In a culture that is filled with opportunities to judge social status and character based on brands, these research results offer hope that not everyone lives by that standard, Park says. Yet there are still people with a fixed mindset whose perceptions of others are influenced by brand choices. To appeal to consumers who do not want to be judged by the fixed mindset population, marketers could offer certain products that minimize the display of the brand’s name on the item, Park explains.


  6. Study looks at why public appeals may fall flat with some would-be donors

    October 7, 2017 by Ashley

    From the University of Western Ontario press release:

    It has long puzzled fundraisers why, in any appeal, some people will eagerly jump in with the throng while others equally passionate about the cause will reject the same pitch.

    Now research led by Western researcher Bonnie Simpson is nearer to figuring out why some people are — and aren’t — motivated by public appeals, and how fundraisers might better tailor requests.

    A new paper, “When Public Recognition for Charitable Giving Backfires: The Role of Independent Self-Construal” online in the Journal of Consumer Research, says people whose self-definition includes a strong streak of independence will sometimes balk because appeals seem too much like following the crowd.

    “They see public appeals as social pressure calling them to be like everyone else who gives in a certain way and at a certain time. They see themselves as resisting the influence to act as others might expect them to,” said Simpson, Assistant Professor, Consumer Behaviour at Western’s DAN Department of Management and Organizational Studies, and lead author of the study. “It’s not that they don’t want to give. They want to give, but more privately.”

    The study is co-authored by Katherine White, professor of Marketing and Behavioural Science at the Sauder School of Business at University of British Columbia; and Juliano Laran, Professor of Marketing at the School of Business Administration, University of Miami.

    “If asked to donate at a grocery-store checkout, for example, people with a greater sense of independence may decline. By contrast, people who place a high value on interdependence will often respond positively,” said Laran: “They think, ‘other people are giving, I want to be part of that movement, I want to help.’ ”

    The study asked people a series of questions about how they view themselves and about their giving patterns. And it found that sometimes the difference between someone’s willingness to give, or not give, was in how the question was worded.

    “For individualists who believe they are resistant to others’ influence, the ‘ask’ may need to be phrased differently. This group is more likely to give if we tell them it’s their choice, that not everyone is doing it and that they can be quiet leaders for the cause,” Simpson said.

    By encouraging people to give through their own free will, they are more likely to donate even when public recognition is involved,” said White. “The lesson isn’t that public or private appeals work better, but that organizations should be willing to change the language of the ‘ask’ based on interdependence or independence traits among donors, which may ultimately change response rates.”


  7. Study assesses effectiveness of deep promotional discounts

    October 5, 2017 by Ashley

    From the University of Arkansas, Fayetteville press release:

    Many retailers employ discounts to attract customers, but it can be difficult for businesses to know what effect these discounts have on overall store performance, and few studies have analyzed store-level data to know for sure whether this strategy works.

    A new study published in the Journal of Retailing shows that promotional discounts increase store traffic and lead to higher overall profits, especially if the advertised products are staples — items such as meat and produce that are purchased frequently and by many customers.

    “Our results validate the widespread use of price promotions supported by feature advertising, such as those found in newspaper circulars,” said Dinesh Gauri, professor of marketing in the Sam M. Walton College of Business. “These featured promotions provided a beneficial impact on several key performance metrics, including store traffic, sales and profits.”

    Over a 49-week period, Gauri and co-authors Brian Ratchford at the University of Texas at Dallas, Joseph Pancras at the University of Connecticut, and Debabrata Talukdar at the University of Buffalo analyzed data on 27 product categories from 24 branches of a popular Northeastern grocery chain. Each week, the authors compiled data on overall traffic, sales per transaction, and profit margin for each store.

    They examined the impact of so-called “loss leader” strategies — the practice of deep promotional discounts to attract customers who will buy other items — on several product categories, including penetration (items bought by many people), frequency (frequently purchased items), storability (items that can be stored, such as paper napkins or plates), impulse items and national brand items.

    Their analysis of about 677,000 transactions, with an average value of $15.44 per transaction, showed that deep discounting, accompanied by a blitz of advertising promotions, achieved retailers’ goal of attracting more customers into stores and increasing overall profits. But the researchers’ main finding came with several caveats, Gauri said.

    Promotional discounts on both high-penetration, high-frequency items (staples such as meat and produce) and low-penetration, low-frequency items (beer and condiments) led to increased traffic but lower sales per transaction.

    “This suggests that these promotional discounts tend to attract small-basket customers,” Gauri said.

    However, discounts in these same categories were associated with higher overall profit margins, especially in the low-penetration, low-frequency category. Gauri said this suggests that the smaller transactions generated by the discounts contained an above average number of high-margin items, in addition to the discounted items.

    “We think this result was driven mainly by beer, which was featured almost every week,” Gauri said.

    These other findings can also give retailers an edge, the researchers said:

    • Broad discounting in one category may lead to diminishing returns.
    • On average, discounts on national brand items had a stronger impact on per-transaction sales than discounts on non-brands.
    • Consumers who took advantage of deep discount promotions on impulse products tended to buy products in more profitable categories.

  8. Study suggests success enhances taste for luxury goods

    September 27, 2017 by Ashley

    From the University of Cambridge press release:

    Footballers in flashy cars, City workers in Armani suits, reality TV celebrities sipping expensive champagne while sitting in hot tubs: what drives people to purchase luxury goods? New research suggests that it may be a sense of being a ‘winner’ — but that contrary to expectations, it is not driven by testosterone.

    While we may sometimes make expensive purchases because of the high quality of a product, these items often represent status symbols, a phenomenon termed ‘conspicuous consumption’. Evolutionary psychologists claim that conspicuous consumption may be comparable to ostentatious behaviours or elaborate physical characteristics seen in the animal kingdom. A peacock’s tail may be energetically costly to build, but may serve as an indicator of genetic quality; similarly, conspicuous consumption may represent a costly display of wealth that serves to increase an individual’s social status.

    Previous studies have suggested that testosterone plays a key role in human social status seeking, with elevated levels of the hormone being associated with more dominant and aggressive behaviour in men. It has also been suggested that testosterone levels increase in response to an individual winning a competition, and fall in response to losing.

    In a study published today in the journal Scientific Reports, Yin Wu, at the time a PhD student at the University of Cambridge, in collaboration with researchers from London Business School, University of Oxford, and University of Vienna, led an investigation into the effects of social status and testosterone levels on conspicuous consumption. Dr Wu tested the effects of winning or losing a competitive version of the game Tetris on the behaviour and testosterone levels of 166 male volunteers — although in fact, while the participants thought they were competing against each other in two-player games, they were randomly assigned as winners or losers.

    After playing the Tetris game, the researchers asked the participants how much they would be willing to pay for luxury items such as expensive cars, from 10% of its retail price up to 120%. They found that winners tended to be willing to pay more for these items than losers. This effect was confirmed with some status products made in the laboratory, such that winners were more willing than losers to pay for a Harvard University T-shirt.

    Next, participants were asked to attribute positive and negative words to the items. This task helps assess the implicit value that participants assigned to the objects — in experiments, this is used to measure attitudes that people are unwilling to reveal publicly, and in the field of consumer psychology, these measures can predict brand preferences, usage, and recognition. The current study supported the finding that winners attach greater value than losers to luxury items.

    Finally, the researchers measured the participants’ testosterone levels. Contrary to expectations, winning and losing had no observable effect on testosterone levels. This suggests that testosterone does not play a role in conspicuous consumption.

    “Winning a competition, which we know is associated with feeling a sense of a higher social status, seems to drive individuals towards conspicuous consumption, making them more willing to pay for luxury items,” says Dr Wu, now based at Shenzhen University in China. “However, we were surprised that testosterone levels did not change with winning or losing, and so testosterone does not seem to be driving the effects on conspicuous consumption.”

    The researchers argue that one way in which winning leads to conspicuous consumption is through an enhanced sense of entitlement among winners, the feeling that as winners they are more deserving of preferential treatment than others: the Tetris ‘winners’ may have felt more deserving of the high-status products and also of fair treatment in the ultimatum game. This would be consistent with findings that feelings of superiority over others arising from hard work and success enhance the desire to purchase luxury brands, as individuals see the luxury goods as a reward.

    “We are not only interested in examining what people are willing to do to win, but also in understanding the consequences of winning on people’s everyday behaviour,” says Dr Amos Schurr, a behavioural economist at Ben-Gurion University of the Negev, Israel, who was not part of this study.

    “Social competition is pervasive in our daily life — whether it is in terms of fighting for the top job, competing for friends and popularity or even growing up in a wealthy, successful family,” says Dr Wu. “Our study demonstrates that winning a competition leads people to prefer high-status products, possibly through an increased feeling of entitlement or deservingness.”

    Concerning the null findings on the testosterone levels, the researchers suggested that competition-induced testosterone fluctuations may be hard to detect, and so they are carrying out further work to test the effects of testosterone on conspicuous consumption in their on-going project.

    This study was conducted at the University of Cambridge’s Behavioural and Clinical Neuroscience Institute, funded by Medical Research Council and Wellcome Trust.


  9. Lively tunes boost sales in crowded stores

    September 11, 2017 by Ashley

    From the Journal of Retailing at New York University press release:

    If a store is crowded, people tend to buy more if the sound system is playing a fast-paced song rather than a ballad. That’s what a team of researchers found in a field experiment across a chain of grocery convenience stores in Northern Europe.

    The researchers — Klemens M. Knoeferle of the BI Norwegian Business School in Oslo; Vilhelm Camillus Paus, of Saatchi & Saatchi in Oslo; and Alexander Vossen of the University of Siegen, in Germany — conducted a longitudinal experiment to determine whether and to what extent music played a role in influencing shoppers when stores were more or less crowded. The authors noted that customer spending tracked an inverted U-shape as stores became more crowded. They found that when stores weren’t crowded, music had little effect, but as social density increased, music with an up-tempo beat spurred spending.

    In “An Upbeat Crowd: Fast In-store Music Alleviates Negative Effects of High Social Density on Customers’ Spending,” appearing in the September issue of The Journal of Retailing, the authors describe a six-week field experiment in 2014 that tested the interaction between manipulated music tempo and measured social density. The sample included 460 small stores and recorded a total of 43,676 observations about shopping basket value (SBV) and the number of purchased items. Compared with no music, as a store became more crowded, the average SBV was roughly 8 percent greater. The authors also observed that SBV was higher due to shoppers’ buying more items rather than more expensive ones.

    Managerial implications were clear: first, the authors say, retail managers should be aware of crowding’s effect on spending patterns and find ways to control it; second, ambient music is a relatively easy tool for retailers to mitigate crowding effects; and third, the authors provide a metric for measuring when social density demands some lively tunes. In addition, when customers are few, retailers might save royalty fees by not playing music, and because fast music in crowded stores motivated customers to buy more low-priced items, managers should prepare for a run on impulse purchases.


  10. Study suggests way to success for sales newbies

    September 5, 2017 by Ashley

    From the Michigan State University press release:

    Good news for novice salespeople worried about becoming successful: Expressing your gratitude to customers by going above and beyond your job description may be as effective as developing long-term relationships with them, indicates a first-of-its-kind study.

    The scientific investigation into both customer and salesperson gratitude, led by Michigan State University business scholar Stephanie Mangus, is particularly relevant as Millennials enter the workforce and become major consumers. Substantial evidence shows that Millennials, or those born between about 1980 and 2000, are emotionally driven buyers.

    Salespeople who control the emotional tone of their buyer-seller relationship tend to have an upper hand, Mangus said. And one way of controlling that emotional tone is for salespeople to express their gratitude to the customer in positive ways, which in turn can foster customer gratitude and loyalty.

    “We’re not saying you have to go out and hug your customer,” said Mangus, an assistant professor of marketing and an expert in business relationships. “All we’re saying is that you should take action on that emotion in a positive way, to put that emotion into practice. Maybe that’s one extra phone call to share a piece of information with your customer, or maybe that’s one extra call to the service department to make sure that customer doesn’t fall to the end of the list.”

    Mangus and colleagues studied salesperson and customer surveys in a business-to-business setting from a large transportation logistics firm. The study found that when salespeople did not go above and beyond, customer gratitude was low overall – and even lower in new relationships between salesperson and client (compared with long-term relationships).

    But when the salesperson did go above and beyond by expressing their gratitude through action, which the researchers call “extra-role behaviors,” customer gratitude shot up to the same high level for both new and long-term relationships.

    “There’s a general acceptance that the longer you’ve been in a business relationship, the more loyal that customer is to you and the more they’re going to buy from you,” Mangus said. “But what we found is that extra-role behaviors can sometimes take the place of that. So if you’re going above and beyond, it may not matter that it’s a newer or developing relationship.”

    And that’s great news for new and aspiring salespeople.

    “One of the big fears of our sales students is that, ‘Oh man, sales jobs are scary because I’m going to go out there and not have customers and not be able to make any money,” Mangus said. “But what new salespeople have is excitement, energy and passion to prove themselves. So if they are grateful for someone just willing to let them come in the door, and they engage in these extra-role behaviors, they can potentially get over the fact that they haven’t been a salesperson for 20 years and that they don’t have an ongoing relationship with this customer.”