On chewing gum and impulse purchases

I will fess up.

I’m  a gum addict and I buy gum in Costco case lot sizes.

But for most normal people, I suspect gum is a pretty impulse purchase.

Have you ever noticed how grocery or drugstores are laid out?   Notice that necessities (milk, eggs, meat, meds) are in the back of the store, but the bad-for-you but oh so tempting kinds of goods are all located near the checkout.  The truly evil stores (like Bristol Farms in Westfield Mall + any Frys Electronics stores) make you snake through aisles of junkfood and chocolates and chips and stuff before you’re given the privilege of parting with your money at the alter of the cashier.

There’s a reason.

Impulse purchasing.

Impulse purchases break from the typical logical/rational decision making process.  It taps into the concept of instant gratification where the decisions you make are emotionally driven.  Yah, it means you find yourself doing things and buying things you had no idea you were going to.  Right now, 66% of confectionary brand decisions are made in stores, so that’s one category that’s got impulse purchase behaviour down pat!


Some interesting general facts about impulse purchase behaviour:

  • Young, unmarried adult households with higher incomes do 45% more unplanned buying.
  • Households led by an older person and those that have larger families do 31% to 65% less spontaneous purchasing.
  • There is 25% less unplanned buying among shoppers who mainly use newspaper ads for price information.
  • People who consider themselves very “fast and efficient” shoppers are far less likely to make impulse buys — 82% less than the average.
  • If the purpose of a shopping trip is “immediate needs or forgotten items,” the rate of buying in unplanned categories falls by 53%.
  • Unplanned purchasing goes up by 23% if the shopping trip itself is unplanned, but it goes down by 13% if it’s a major or weekly trip.
  • If a shopping trip includes stops at multiple stores, there is 9% less unplanned buying at the second or third store.
  • Unplanned purchasing goes up by 44% if the shopper goes to the store by car instead of on foot.

    (Excerpted from a Wharton study, Unplanned Category Purchase Incidence: Who Does It, How Often and Why“)

Impulse behaviour works in other scenarios too.  On Travel Brain, we leveraged impulse behaviour to build our travel content – all of our tips and reviews.  We got a contribution rate of 5-10% (versus the standard 1%) by asking users to come on and do something simple (like create a map of where they’ve been).  Once they did that, we asked them to share a tip or review of a place they just finished telling us they’d visited.  Our users agreed more readily because they were already there first doing something else.

So think about how you might tap into impulse behaviour into your product.  Last minute upsell?  Using some other necessity as a hook?  On that note, I think I’d like to buy a planned purchase cupcake.

Posted in Marketing, Psychology | Tagged | 1 Comment

On the concept of loss aversion

Losing something sucks ass.

In fact it sucks more than if you never had it to begin with.  It’s the concept of loss aversion.  Studies show you feel twice as much pain from loss than you do pleasure from  a gain.

Well that’s no fun.  How can you make the best of it?

For starters, you could design products with this consumer behaviour in mind. 🙂 🙂 🙂

Some example applications:

  • Airlines, shopping sites like Gilt do this amazingly well.  Want a ticket? You better buy it quick because even if it’s in your cart it could disappear if you don’t complete your transaction within minutes.  That countdown timer is pure evil.
  • When asking for charitable donations, instead of telling people how many goats you can buy with the donation, how about the # of people who won’t die because they’ve been fed?  The number of shelter animals that don’t get put down because you made a donation.  Hear that?  Make a donation. 😉
  • Networking or dating sites, where your messages and stats might get deleted after 30 days or x period of inactivity unless you pay to upgrade
  • Farmville (and all its permutations) where your crops die from neglect unless you check in on the crops.

Also, knowing this instinct:

In making decisions, consider whether you’re being caught up with sunk costs.  What you’ve invested in something so far should not influence whether you continue to do it.

Posted in Experiences, Happiness, My life lessons, Psychology | Tagged , | Leave a comment

On signalling (for something like dating)

So I just learned that my ex started seeing someone shortly after we broke up.

My feelings about this aside, it got me thinking about the game of dating.  And that’s because dating is very much about selling a product — it just so happens that the product is probably a pretty personal matter.  C’mon, it’s you. 🙂

Market economics for a matchup is all about supply and demand, and given that I’m not a dating advice columnist, I’ll leave the supply side out of this. :p

So how do you increase the demand for a product like yourself?

In a crowded market, standing out is pretty important critical.  In The Game by Neil Strauss (yes, I’ve read it, and no, not because of this :p), that’s the concept of peacocking.  What’s something surprising or unusual about you that breaks from the clutter?  Hopefully you’ve picked differentiating on something that’s actually in demand!

Perceived scarcity
It goes a bit hand in hand with the previous point, but if you’re not seen as a few-of-a-kind (meaning that you are not hyper-differentiated), then there’s no reason to pull the trigger.   Ok ok, so maybe standards might be lower for casual dating, but point being the more scarce you are, the better the odds. 😉  Ideally you’ve got a few things that’s the intersection of highly unusual and highly desirable.

If you’re differentiated, and it’s clear you’re rare, it doesn’t matter a minute if  the perception is that you’ll be around and available forever.  Think about the psychological impact of an auction.  You often pay far more than you intended because if you wait, it’s gone.  So what can you do to give the impression that if they wait, you’re gone?

Emotional Connection
The most successful brands speak to you emotionally.  Think about the feelings that come to mind when you think of brands like Apple, Mini Cooper, Molson Canada’s I am Canadian campaign (it being crap beer aside :p).:

Shared experiences (ideally novel, thrilling, or dangerous) tends to help with creating closeness and establishing an emotional connection.  As does skipping fluff in conversation like the weather or your job and focusing more on things like the challenging times you’ve faced; events that shape who you are today.

Indifference (aka, not desperate)
Dating is a psychological game.  It feels calculating, but unfortunately, it’s true.  You’re a far more desirable brand if you create the impression that you care — just that little bit less than your potential counterpart.  Don’t go too far the other way though to be completely unavailable.  Studies have shown that a less attractive person who sends a positive signal (e.g. brief eye contact) will be approached far more frequently than someone who’s a 10 and sends no signals.

Brands devalue themselves when they engage in heavy, constant discounting.  Don’t be that brand.

Frequency of contact
Familiarity might bring complacency and potential boredom down the down the line, but if you’re an interesting person and there’s already physical attraction and an emotional connection, increasing the opportunity to be reminded of the person or just spending more time together having meaningful shared experiences will certainly increase the odds of engagement.  It’s why dating or emotional affairs happen so often in the workplace!  Long hours, close proximity, common bond = muchos kindling.

Be hot.
It’s true.  Packaging matters.  It doesn’t mean you have to be the 99.99% percentile to the world – just be that to the person (people) who matter.

Be Surprising
If you’re predictable, you’re less interesting.  That’s not to say be schizo.  Once you establish a connection, you stay more intriguing if there are little surprising or unexpected things about you.


Mind you, this is all purely academic as 1) I’m absolutely no dating expert, and 2) my very dear friends are more than satisfying my need for connection right now 🙂 — meaning I have no intention of applying these points to anything!

And to these friends, thank you. 🙂

Posted in Branding, Marketing, My life lessons, Positioning | Tagged , , , | Leave a comment

On something as vague as distribution

There’s really a lot to write on distribution.

I’ve decided to focus on vending machines automatic retailing first.

A few years ago, I saw vending machines selling iPods in the airport.  I was so surprised I wrote about it.   Turns out they are far more sophisticated than that, and also they are really not called vending machines.  My bad. 🙂

Not only did I see them in airports, but I started noticing them in stores like Macy’s too.

Naturally I started to wonder why they’re there, and who the consumers are.

Well, sometimes it’s just way more effective to ask the founder than to theorize ad infinitum. 🙂

So that’s what I did yesterday morning.

I sat down with Gower Smith, founder of Zoom Systems to talk shop.  Specifically self-serve retail shops.  Zoom shops are completely standalone mobile retail outlets that sell everything from face wash to Proactiv to iPods, iPads, and other Apple products.  And guess what?   These shops are big business.  In fact, the average Zoomshop does over 20x the business of a traditional vending machine.  Some of the top selling units are easily making mid-6 figures in retail volume.  That’s right – 1 vending machine.  $500K ballpark.  And still in growth mode.

Mind blown.

So who are these consumers, and what’s the motivation to buy from an automatic retail unit?

I started with Macy’s.   Why is there a store within a store?

As I learned, at least for Apple, setting up a retail store within Macy’s allowed the brand to reach a whole new type of consumer.  The Macy’s shopper is female, and typically purchases Zoomshop products using a Macy’s store card or gift card.   They don’t often frequent Apple’s retail stores.  No cannibalism = great.

These units also work for Apple because it lets them control  the entire user experience  (and that seems to be a pretty important Apple criteria 😉 )  Instead of locked up boxes with anti-theft wiring on it and signs to go see front desk for your product, you can browse the selection of products in an approved display environment with approved messaging.  You even get to pay and get your product without having to interact with any disgruntled or poorly trained staff!

And Proactiv vending machines?   Well think about it, if you have pimply skin, do you really want to be interacting with a person to talk about your pimply skin?

Given that zoom systems can capture loads of actual customer data — including traffic count of passerbys and traffic flow, abandonment rates in shopping interface, the types of information being browsed…you’re starting to get a physical retail system with as much data and A/B testing ability as the average website.

Talk about the potential here. 🙂


Thanks to Gower Smith for answering all my questions, and for the data on Zoomshops 🙂

Posted in Customer service, Design, Merchandising | 1 Comment

On satisfying my curiousity on things like startup founders

I’m hoping you’ll help me satisfy a curiosity.

Technically, I’ve got partial answers as a friend already posted this question on his Facebook wall last week, but now I’d like a bit more data as the preliminary results are intriguing.

If you are a startup founder, please help me out and take this survey:

Take a 5 min survey

(bit.ly link:  http://svy.mk/wQnXyD )

If you know a startup founder, would you please share this survey with them?

Once I have enough data, I will share the results back. 🙂

Thank you so very much in advance!  In exchange, if you ever visit me at the office, I’ll trade you for as much candy as you can eat. 🙂


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On holidays like Valentines and other times for commercialism

Valentine’s Day.

It’s one of the more commercial holidays of the year.

Now I suppose I could be as romantically inclined as the next person, but given that I’m already buying chocolates all year round and flowers almost as often, the day doesn’t feel ALL that special (or maybe just especially anti-special this year. 🙂 )

But Valentine’s day is big business.  $18B of big business just in the US alone.  It’s ranked #3 in holiday spending, ahead of Mother’s Day, Easter, and Father’s Day, and behind only Christmas and Thanksgiving.

In fact, it’s such big business that you might have noticed Valentine’s Day merchandising showing up while you were still celebrating New Year’s Day.  (Yep, I’m that person who, of all the things to take note of after NY, notices the merchandising changing over :p)

Somewhere along the way, stores figured that people buy more when they are being reminded to buy.

Smart observation.

Bit by bit, merchandising for a holiday or event crept up sooner and sooner till stores became a schizophrenic mix of holidays (hello Costco with your Halloween AND X’mas merchandising at the same time.  On notice!!)

But I think stores have gone a bit overboard.

Maybe it’s laziness on figuring out what else to merchandise in those seasonal sections, but if they are telling me to think Valentine’s Day on January 2nd already, where is my sense of urgency?  Am I really buying Valentine’s chocolates that early in?  Showing me something too soon can have a detrimental effect where I actually tune out on the store merchandise.

Does early holiday merchandising work in general?  It seems the results have been mixed.

Retailers that merchandise early seem to gain an advantage over their competitors.  However, as their competitors follow suit, this advantage is lost, and in the long run the industry is no better off than before.  Total spending does not go up, but retailers may gain a temporarily larger share of the pie.  Since there doesn’t appear to be any conclusive negative long-term effects to the industry for doing this, don’t expect this trend to end soon.

There’s one product I don’t mind seeing all the time.  And that’s creme eggs.  I’ll buy those all year round.

Which is why this —

is truly brilliant.

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On amusement parks and seasonality

Not too long ago, I found myself in an indoor waterpark in the middle of America in the middle of winter.

Now I don’t find myself in said location all too often, so when I do,  I tell myself to take full advantage.

As I’m standing in a heavily chlorine-scented line squinting at my surroundings waiting for the thrill of a self-imposed wedgie from going down slides (or most fun, flushing myself down the toilet bowl 🙂 ),  it occurred to me that there was an awfully high lifeguard to scantily clad patron ratio.

So I started wondering – Are waterparks actually making any money with that level of staffing?

Turns out not really.  At least not during the time I was there.  Waterparks – even indoor waterparks follow a highly seasonal curve.  Between high season and low season, they can fluctuate between an operating loss of $67M in Q1 to an operating profit of $247M in Q3 for a company like Cedar Fair, which owns 11 amusement parks and 7 water parks.  During that low season, operating expenses are often 3 to 4 times greater than revenues.

So aside from then pondering why they bothered to stay open at a loss because I’m sure it wasn’t just to amuse yours truly, I started thinking about other similar products.

Luxury goods also follow the same demand curve.  Products like jewellery (39% of sales come in the 4th quarter),  cosmetics and fragrances (34%) — even consumer electronics (33%) typically make a disproportionate amount of their sales in the last quarter due to holiday gift giving (16% of consumer electronics sales are due to holiday gift giving).  Profitability for an entire year can be based on how sales go in just one month (23% of jewellery sales happen in December alone).    Tourism companies try to adjust demand by offering seasonal rates, and now it looks like luxury goods and services have an outlet too through flash sales sites like Gilt or Bloomspot. (though if it changes consumers overall to be super-price conscious remains to be seen.)

Some places, like Tofino, got creative by rebranding their wretched wet winter experience as “Storm watching season” (kudos on that, I was convinced to go :p).

What else can be done to promote luxury products outside of the traditional gift giving season?  What would make you want to buy smelly toilette water in the dead of summer?

Unless it’s to drown out the sweet scent of chlorinated water in your hair —

Haha, maybe that’s it.   Seasonal match made in heaven! :p

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On music and your tastebuds as it relates to wine

While it’s been known that music can influence your mood, did you know that music can also influence how a wine tastes to you?

Yep, the right music  makes your wine taste better.  Up to 60% better, according to a study by Heriot-Watt University in Edinburgh.

So not only are there wine+food pairings, now maybe we’ll see wines+food+music pairings. 🙂

Some recommended wine and music matches

  • Cabernet Sauvignon: Jimi Hendrix, Rolling Stones, The Who, Paul McCartney
  • Chardonnay: Blondie, Tina Turner, Kylie Minogue
  • Syrah: Enya, Puccini, Vangelis
  • Merlot: Lionel Ritchie, Eva Cassidy

Why is this so?  Theory is that it’s due to cognitive priming.  Different styles of music stimulate different parts of your brain.  Those trigger points in turn affects your perception of taste.

So now then, since I’m on a cooking hiatus — what kind of music should I play to make my instant noodles taste even better? 🙂  What other ways might you try to prime your consumers?

Also why wasn’t Mexican death metal or Reggaeton part of the study??

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Superbowl Musings: Does Icing the Kicker Work?

Super Bowl XLVI.

Chances are, a last minute field goal will decide the game.

Of the 45 past Super Bowls, six (13%) have been decided by three points or less.

Four of those games have come down to a field goal in the last minute of the game. A lot of pressure is put on the kickers in these situations, and their historical legacies are cemented by whether they make it (O’Brien in Super Bowl V, Vinatieri in Super Bowls XXXVI and XXXVIII) or not (Norwood in Super Bowl XXV – the Wide Right Game).

Each of the four Super Bowls that New England has made it to during the Belichick / Brady era have been decided by three points, so if Sunday goes according to recent history, kickers may play a center stage role in this Super Bowl as well.

In this scenario, some teams employ the tactic of trying to ice the kicker, meaning –

Icing the Kicker
: a tactic employed by defending teams to disrupt the process of kicking a field goal just prior to the snap.

So to get to the question: Does icing the kicker work?

Inconclusive, but looking like probably not.

  • A 2010 story in the Wall Street Journal mentioned that for field goals (since 2000) in the final two minutes of the game or overtime, NFL kickers made 77.3% of field goals when no timeout was called vs. 79.7% when a timeout was called.
  • An ESPN article mentions that icing the kicker in the last 10 seconds of the game actually increases the chance that the kick will be successful. They don’t mention the sample size, however.
  • A University of San Diego study indicated that for field goals (when there was point differential of three points or less in the last minute) between 2002 and 2007, iced kickers were successful 66.4% of the time vs. 80.4% when they weren’t iced.
  • On the other hand, Stats Inc. found for that pressure kicks (point differential of three points or less in the last two minutes) between 1991 and 2005, iced kickers were successful 72% of the time vs. 71.7% when they weren’t iced.

Of the four studies mentioned, two show no significant difference, one shows that icing the kicker works, and the other one shows that icing the kicker actually increases the kicker’s chances of success. Results vary based on the timeframe, how a pressure kick was defined (last two minutes, three minutes, 10 seconds, etc…) and sample size. No matter how you look at it though, the case for icing the kicker looks very inconclusive.

So why do coaches still try to ice the kicker if it doesn’t actually seem to work based on past data?

Confirmation bias might be at play.  Past experiences, ascribing missed kicks to a timeout call when those misses should be expected based on probability.

Statistical analysis in sports has been fitfully embraced, with many coaches and managers preferring to rely on visuals and past experience.  Media and the general public reinforce this, praising coaches for icing the kicker to win a game,  questioning others on their decision not to ice a kicker.

Coaches like to think they can influence the game.  They are used to the belief their playcalling and decisions having a significant impact on the results of any given play.  When it comes down to a high importance game winning or game tying field goal attempt, they won’t want to believe they can’t affect the result.   Even if evidence solidly proved that icing the kicker was ineffective, coaches will probably still call timeouts so that they aren’t left standing powerlessly on the sidelines. Because in the end, we all like to think that we have some control over things.

Will we see someone ice Gostkowski or Tynes at the end of Super Bowl XLVI? With the Patriots as only 2 1/2 point favorites over the Giants, there’s a pretty reasonable chance the game will be decided by a field goal at the end!


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On beautifully designed products

I was once asked in a job interview to describe my favourite product.

My Kuhn Rikon garlic press.” I answered without hesitation.

My interviewer paused for a moment. “Wow, well that’s the first time I’ve ever heard that as an answer before.”

Did I mention I was interviewing at a tech company?

Ok, so I didn’t get the job (they pulled the position), but nonetheless, I stand by my answer. And I think there are lessons a company can learn from a product like that.

What makes this garlic press so awesome? 5 things.

It’s simple.

It’s durable.

It’s effortless to use.

It does a kick-ass job on it’s primary function. (cranking out crushed garlic effortlessly)

It’s beautiful to look at.

‘Nuf said. 🙂

p.s. serious – if you’re on the search for a garlic press – look no further. This is the best one out there. It’s so hardcore it’s doubled as a hammer for me. More than once. Gotta hammer that point in. 🙂


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