All posts filed under “Shopping

Swoopo: Irrational escalation of commitment

Swoopo

Swoopo, a new kind of “entertainment shopping” auction site, takes Martin Shubik’s classic Dollar Auction game to a whole new, automated, mass participation level. It’s an example of the escalation of commitment, or a sunk cost fallacy, where we increase our commitment (in this case with real money) even though (in this case) most users’ positions are becoming less and less valuable.

Thee Cake Scraps has a good analysis of how this works:

It is a ‘auction’ site…sort of. Swoopo sells bids for $1. Each time you use a bid on an item the price is increased by $0.15 for that item. So here is an example:

Person A buys 5 bids from Swoopo for $5 total. Person A sees an auction for $1000 and places the first bid. The auction is now at $0.15. Person A now has a sunk cost of $1 (the cost of the bid they used). There is no way to get that dollar back, win or lose. If Person A wins they must pay the $0.15.

Person B also purchased $5 of bids. Person B sees the same auction and places the second bid. The auction price is now $0.30 (because each bid increases the cost by exactly 15 cents). Person B now has a sunk cost of $1. If Person B wins they must pay the $0.30. Swoopo now has $2 in the bank and the auction is at 30 cents.

This can happen with as many users as there are suckers to start accounts. Why are they suckers? Because everybody that does not have the top spot just loses the money they spent on bids. *Poof* Gone. If you think this sounds a little like gambling or a complete scam you are not alone. People get swept up into the auction and don’t want to get nothing for the money they spent on bids.

The key thing seems to be that some bidders will win items at lower than RRP, i.e. they get a good deal, but for every one of those, there are many, many others who have all paid for their bids (money going to Swoopo) and received nothing as a result. The house will always win.

Swoopo staff respond here and here (at Crunchgear).

As is obligatory with this blog, I need to ask: where else have systems been designed to use this behaviour-shaping technique? There must be many examples in auctions, games and gambling in general – but can the idea be applied to consumer products/services, using escalating commitment to shape user behaviour? Can this be applied to help users save energy, do more exercise, etc as opposed merely to extracting value from them with no benefit in return?

Persuasion & control round-up

  • New Scientist: Recruiting Smell for the Hard Sell
    Image from New ScientistSamsung’s coercive atmospherics strategy involves the smell of honeydew melon:

    THE AIR in Samsung’s flagship electronics store on the upper west side of Manhattan smells like honeydew melon. It is barely perceptible but, together with the soft, constantly morphing light scheme, the scent gives the store a blissfully relaxed, tropical feel. The fragrance I’m sniffing is the company’s signature scent and is being pumped out from hidden devices in the ceiling. Consumers roam the showroom unaware that they are being seduced not just via their eyes and ears but also by their noses.

    In one recent study, accepted for publication in the Journal of Business Research, Eric Spangenberg, a consumer psychologist and dean of the College of Business and Economics at Washington State University in Pullman, and his colleagues carried out an experiment in a local clothing store. They discovered that when “feminine scents”, like vanilla, were used, sales of women’s clothes doubled; as did men’s clothes when scents like rose maroc were diffused.

    A spokesman from IFF revealed that the company has developed technology to scent materials from fibres to plastic, suggesting that we can expect a more aromatic future, with everything from scented exercise clothing and towels to MP3 players with a customised scent. As more and more stores and hotels use ambient scents, however, remember that their goal is not just to make your experience more pleasant. They want to imprint a positive memory, influence your future feelings about particular brands and ultimately forge an emotional link to you – and more importantly, your wallet.

    (via Martin Howard‘s very interesting blog, and the genius Mind Hacks)

  • Consumerist: 5 Marketing Tricks That Unleash Shopping Frenzies
    Beanie BabiesThe Consumerist’s Ben Popken outlines “5 Marketing Tricks That Unleash Shopping Frenzies”:

    * Artificially limit supply. They had a giant warehouse full of Beanie Babies, but released them in squirts to prolong the buying orgy.
    * Issue press releases about limited supply so news van show up
    * Aggressively market to children. Daddy may not play with his kids as much as he should but one morning he can get up at the crack of dawn, get a Teddy Ruxpin, and be a hero.
    * Make a line of minute variations on the same theme to create the “collect them all” effect.
    * Make it only have one highly specialized function so you can sell one that laughs, one that sings, one that skydives, etc, ad nauseum.

    All of us are familiar with these strategies – whether consciously or not – but can similar ideas ever be employed in a way which benefits the consumer, or society in general, without actual deception or underhandedness? For example, can artificially limiting supply to increase demand ever be helpful? Certainly artificially limiting supply to decrease demand can be helpful to consumers might sometimes be helpful – if you knew you could get a healthy snack in 5 minutes, but an unhealthy one took an hour to arrive, you might be more inclined to go for the healthy one; if the number of parking spaces wide enough to take a large 4 x 4 in a city centre were artificially restricted, it might discourage someone from choosing to drive into the city in such a vehicle.

    But is it helpful – or ‘right’ – to use these types of strategy to further an aim which, perhaps, deceives the consumer, for the ‘greater good’ (and indeed the consumer’s own benefit, ultimately)? Should energy-saving devices be marketed aggressively to children, so that they pressure their parents to get one?

    (Image from Michael_L‘s Flickr stream)

  • Kazys Varnelis: Architecture of Disappearance
    Architecture of disappearance
    Kazys Varnelis notes “the architecture of disappearance”:

    I needed to show a new Netlab intern the maps from Banham’s Los Angeles, Architecture of Four Ecologies and realized that I had left the original behind. Luckily, Google Books had a copy here, strangely however, in their quest to remove copyrighted images, Google’s censors (human? algorithmic?) had gone awry and had started producing art such as this image.

    It’s not clear here whether there’s a belief that the visual appearance of the building itself is copyrighted (which surely cannot be the case – photographers’ rights (UK at least) are fairly clear on this) or whether that by effectively making the image useless, it prevents someone using an image from Google Books elsewhere. The latter is probabky the case, but then why bother showing it at all?

    (Thanks to Katrin for this)

  • Fanatic Attack
    Finally, in self-regarding nonsense news, this blog’s been featured on Fanatic Attack, a very interesting, fairly new site highlighting “entrancement, entertainment, and an enhancement of curiosity”: people, organisations and projects that display a deep passion or obsession with a particular subject or theme. I’m grateful to be considered as such!
  • Detailing and retailing

    HMS Furious
    The dazzle painting of HMS Furious, c. 1918. Image from A Gallery of Dazzle-Painted Ships

    A couple of weeks ago we looked at casino carpet design – a field where busy, garish graphic design is deliberately employed to repel viewers, and direct their attention somewhere else. Ben Hyde commented that deliberately unattractive “background music, lighting, seating, and color schemes in large malls” may be used to drive shoppers into the quieter surroundings of the actual stores, which certainly rings true in some cases I can think of.

    On another level, though, A comment by Kenshi drew my attention to the dazzle camouflage used in the First World War, which is quite startling, in a brilliantly bold way. Roy R Behrens‘ book, False Colors: Art, Design and Modern Camouflage, from the website of which I’ve borrowed these images, looks extremely interesting, and I will certainly be ordering a copy when I have the budget.

    Developed in Britain by Norman Wilkinson and in the US by Everett Warner and Frederic Waugh, the dazzle techniques were intended to make “a single thing appear to be a hodgepodge of unrelated components,” as Behrens puts it in this fascinating article. The aim was that such visual disruption would cause confusion and make it difficult for the enemy to identify what kind of ship – and what size – it was from a distance, with the use of ‘reversed perspective’ in the patterning a part of this. The ship’s course – and angle to the viewer – would also be problematic to identify, with colouring including bright whites, blues and sea-green alongside black, darker blue and grey selectively helping parts of the ship to blend into the seascape, and other parts very much stand out.

    Breaking the enemy’s ability to distinguish elements of the ship properly, and generally to cause distraction and make it difficult to concentrate on observation for protracted periods, were all part of this plan; painting ships with different dazzle patterning on each side made identification even harder.

    Despite being likened to Cubism disdainfully by some contemporary journalists, the processes used for designing the camouflage were developed both analytically and empirically, and extensively tested before being applied to the real vessels. Nevertheless, there are certainly elements in common between dazzle techniques and parts of Picasso’s and others’ work; Behrens has written further on the interactions between Cubism, Gestalt theory and camouflage (both in nature and man-made).

    From A Gallery of Dazzle-Painted ShipsFrom A Gallery of Dazzle-Painted Ships
    Left: The Mauritania in dazzle paint camouflage. Right: Those blue and white stripes are familiar to UK shoppers today. Images from A Gallery of Dazzle-Painted Ships

    Intriguingly, the right-hand image above, with the bold blue and white stripes, has something in common with an everyday livery familiar to tens of millions of British shoppers: the iconic Tesco Value branding (below), at least in its original form. I’m not suggesting an actual link, but as we will see, there is something in common in the intentions behind these disparate methods of influencing viewer behaviour.

    Image from Plap man
    Tesco Value Beans. Image from Plap man on Flickr.

    The same Tim Harford article quoted in my recent post about defaults suggests that the “infamously ugly” Tesco Value packaging is intended as a tool to facilitate price discrimination:

    The difficulty is that if some of your products are cheap, you may lose money from customers who would willingly have paid more. So, businesses try to discourage their more lavish customers from trading down by making their cheap products look or sound unattractive, or, in the case of Starbucks, making the cheap product invisible. The British supermarket Tesco has a “value” line of products with infamously ugly packaging, not because good designers are unavailable but because the supermarket wants to scare away customers [from the Value products] who would willingly spend more [on other brands, or Tesco’s ‘normal’ private label products].

    Whereas the dazzle camouflage was intended to confuse and disconcert the viewer, the thinking behind the Tesco Value graphics (I would love to know who designed the original style) thus appears to be to disconcert or repel certain viewers (customers) so that they pick a higher-priced alternative (usually on the shelf just above the Value items – Tesco’s planograms have thinking behind them), while allowing immediate segmentation – those customers looking for the cheapest products possible find the Value products easily.

    There can’t be many retail situations where pretty much the same products can be sold successfully at two different prices on the same shelving unit just because of differing packaging graphics, but it seems to work for Tesco, in the process creating a significant meme.

    Image from B3ta threadImage from Boakes
    Left: a ‘Tesco Value’ tattoo, from this B3ta thread There have been many others. Right: Rich Boakes’ ‘Tesco Value’ greetings cards have been widely imitated, and could even have inspired this effort from Asda.

    Updates to the Tesco Value branding in recent years have reduced the intensity of the blue stripes and brought the style closer to other supermarkets’ ‘value’ brands, which all tend to be similarly sparse (e.g. Sainsbury’s Basics, below), but the Tesco style is still the most distinctive.

    Adequate biscuits

    Pier pressure

      Palace Pier, Brighton
    Palace Pier, BrightonPalace Pier, Brighton

    Deliberately routing users via a longer or more circuitous route is found in many forms (with a variety of intentions) from misleading road signs, to endless click-through screens, splitting up articles, periodic rearrangement of supermarket shelves, and so on. This kind of forcing function can also be used to increase the likelihood of users reading ‘important’ information; as always, there is an agenda behind the design decision.

    But it’s rare to see something quite as blatant as the above “This way to the end of the pier” sign on Brighton Palace Pier, attempting to persuade visitors to walk through the amusement arcade rather than along the walkways either side of the arcade. I don’t know how effective it is; conceivably some visitors might assume that it’s the only way to the end of the pier, but given how easy it is to see along the walkways either side, I’m not sure the deception is very convincing.

    What’s the worst intentional mis-direction you’ve come across? And did it ‘work’?

    The Terminal Bench

    Heathrow: Skyport for the Seventies

    Mags L Halliday – author of the Doctor Who novel History 101 – let me know about an ‘interesting’ design tactic being used at Heathrow’s Terminal 5. From the Guardian, by Julia Finch:

    Flying from the new Heathrow Terminal 5 and facing a lengthy delay? No worries. Take a seat and enjoy the spectacular views through the glass walls: Windsor castle in one direction; the Wembley Arch, the London Eye and the Gherkin visible on the horizon in the other.

    But you had better be quick, because the vast Richard Rogers-designed terminal, due to open at 4am on March 27 next year, has only 700 seats. That’s much less than two jumbo loads, in an airport designed to handle up to 30 million passengers a year.

    There will be more chairs available but they will be inside cafes, bars and restaurants. Taking the weight off your feet will cost at least a cup of coffee.

    I suppose we should have expected this. If they weren’t actually going to remove the seats, they’d have used uncomfortable benches instead. In itself, it’s maybe not quite as manipulative as the café deliberately creating worry to get customers to vacate their seats that we looked at a few days ago, but as Frankie Roberto commented, “airports seem to be a fairly unique environment, and one that must be full of architectures of control.”

    Heathrow: Skyport for the Seventies

    Nevertheless, aside from the more obvious control elements of airport architecture – from baggage trolley width restrictors to the blind enforcement of arbitrary regulations, the retailers themselves are keen to make the most of this unique environment and the combination of excitement, stress, tiredness, and above all, confinement, which the passengers are undergoing:

    The new terminal may have been heralded as a “cathedral to flight”, but with 23,225 sq metres (250,000 sq ft) of retail space, the equivalent of six typical Asda stores, it is actually going to be a temple to retail. Heathrow may be packed with shops, but when the £4.2bn Terminal 5 opens the airport’s total shopping space will increase by 50% overnight.

    After security, two banks of double escalators will transport potential shoppers into a 2,787 sq metre (30,000 sq foot) World Duty Free store… Mark Riches, managing director of WDF, believes his new superstore has the best possible site to part passengers from their cash: “About 70% of passengers will come down those escalators”, he said, “and we will be ready”.

    He recognises he has a captive audience: “If we can’t sell to people who can’t leave the building, then there’s something wrong with us”.

    Mr Riches, a former Marks & Spencer executive, is planning “to put the glamour back into airport retailing” with plans for gleaming cosmetics counters and a central area reserved for beauty services such as manicures.

    “We are moving away from just selling stuff to providing services. This should be real theatre,” he said.

    He is also planning what he calls “contentainment” – the music will change according to where you are in the shop and a 14-metre-long “crystal curtain” “bigger than a double decker bus and thinner than a calculator” will show videos, advertising and sports events.

    Heathrow: Skyport for the Seventies

    Everything about this story – from the location itself out on the bleak badlands between the M25 and A30, to the way the customers are coerced, channelled, mass-entertained and exploited, to the odd hyperbolic glee of Mr Riches’ visions for his mini-empire – seems to scream J G Ballard. If Kingdom Come hadn’t riffed off the Bentall Centre, it could surely have been about a Terminal 5.

    Back to the practical aspects: the deliberate removal of public seating to force passengers to patronise restaurants and cafés is in no way isolated to Heathrow. In a coming post – also suggested by Mags – we’ll look at First Great Western’s policy of doing this in some of its railway stations, with none of the glitz of Terminal 5 but all of the cold-eyed distaste for the customer.

    Heathrow: Skyport for the Seventies

    Images from a leaflet published by the British Airports Authority, 1970.

    Portioning blame

    McDonald's: Image from Flickr user DRB62
    McDonald’s, Toledo, Ohio, 1967. Image from DRB62 on Flickr.

    We’ve looked previously at the effect of portion/packaging sizes as a ‘choice of default’ architecture of control, and I’m aware that I have not yet reviewed Dr Brian Wansink‘s excellent Mindless Eating, which examines this and other psychological aspects of the way we eat. I will do this in due course.

    In the meantime, though, here’s an interesting account of the invention (probably one instance of many) of super-sizing as a specific technique for increasing consumption, from Michael Pollan‘s fascinating The Omnivore’s Dilemma:

    …The soda makers don’t deserve credit for the invention of super-sizing. That distinction belongs to a man named David Wallerstein…[who] in the fifties and sixties …w orked for a chain of movie theaters in Texas, where he labored to expand sales of soda and popcorn – the high mark-up items that theaters depend on for their profitability. As the story is told in John Love’s official history of McDonald’s, Wallerstein tried everything he could think of to goose up sales – two-for-one deals, matinee specials – but found he simply could not induce customers to buy more than one soda and one bag of popcorn. He thought he knew why: Going for seconds makes people feel piggish.

    Wallerstein discovered that people would spring for more popcorn and soda – a lot more – as long as it came in a single gigantic serving. Thus was born the two-quart bucket of popcorn, the sixty-four ounce Big Gulp, and, in time, the Big Mac and the jumbo fries, though Ray Kroc himself took some convincing. In 1968, Wallerstein went to work for McDonald’s, but, try as he might, he couldn’t convince Kroc, the company’s founder, of supersizing’s magic powers.

    “If people want more fries,” Kroc told him, “they can buy two bags.” Wallerstein patiently explained that McDonald’s customers did want more but were reluctant to buy a second bag. “They don’t want to look like gluttons.”

    Kroc remained skeptical, so Wallerstein went looking for proof. He began staking out McDonald’s outlets in and around Chicago, observing how people ate. He saw customers noisily draining their sodas, and digging infinitesimal bits of salt and burnt spud out of their little bags of French fries. After Wallerstein presented his findings, Kroc relented, approved supersized portions, and the dramatic spike in sales confirmed the marketer’s hunch… One might think that people would stop eating and drinking these gargantuan portions as soon as they felt full, but it turns out hunger doesn’t work that way. Researchers have found that people (and animals) presented with large portions will eat up to 30 percent more than they would otherwise.

    As I say, we’ll come back to this and similar issues in due course, but I think it’s worth bearing in mind the implications of the unit bias phenomenon within design generally. Where else does it apply?