FALL
2011
CONSUMER BEHAVIOR MINOR PAPER
Brandon Mingo, Allyson Mitchell & Ziruo Zhang
One of the most fascinating things about the human race is that we are probably one of the only living organisms who do experiments on each other. We want to know more about ourselves. We may never actually know why we all act the way we do, but we can take steps that try and explain that unexplainable behavior. With our experiment we wanted to know how people would shop when there were fewer items on a shelf compared to a higher abundance next to that. We believe that when a consumer has this choice, they would choose the item that has fewer items on the shelf. This could happen for a reason such as they think the item that has less sells better because of taste or effect, or they could think that the item is very popular and it may not be here next time they come back. There were many variables in this experiment, some we could control, and some we could not. Our independent variable was that we removed products from the shelf, leaving only a very few behind. Our dependent variable would be the consumer and the amount of the lesser item that they picked off of the shelf. This we measured in segments of an hour. Our controlled variable was to make sure the item we left less of on the shelves had to appear to have less than the item(s) located next to it. Some of our uncontrolled variables included the consumers' per-preference to another item (brand loyalty), or the amount of foot-traffic in the store at the time of our experiment. During our preliminary experiment we chose to pick a total of four different items. This stayed consistent throughout all of our experiments. These items included fast-moving consumer products, health and beauty products, and food products. Our preliminary was done at the superstore Target, and lasted one hour. Due to this experiment we were able to edit our three following experiments to best suit the surroundings of the actual experiment. This way we felt we received better results than what we would have achieved without the preliminary. These following experiments each had their own results:
Experiment One: The first experiment was executed in much the same way as the preliminary. This was done due to the fact that we believed that one of the main hindrances on our preliminary was the day and time that we chose to do that. This was the only thing we changed when conducting the first experiment. Time: Sunday November 13, 2011 Afternoon Store: Northgate Target –Seattle, WA Data Collected: (next page)
Product Description
Category Fast-moving consumer Clorox Toilet Cleaner goods Neutrogena Face Fast-moving consumer Cleaner goods Prevacid Heartburn Health products medicine Quicker Oats Peanut Snacks, & Foods Butter Chewy Bars Total
Pre-Picked Products Left
Pre-Picked Products Sold (In Hour)
9
1
4
3
7
2
8
2
28
8
Our results for the first trial were very positive, even though we only allotted one hour. Eight prepicked items were sold, out of twenty-eight left on the shelves. And for this trial we actually used the exact same products as the preliminary experiment, but we did it at Sunday when the store had higher foot traffic. We believed that the result verified our hypothesis.
Experiment Two: With the second experiment we decided to try a new location as well as a new day and time. One of the reasons we decided to do this was to be sure that our results could be based on the actually experiment, and not be skewed by things such as store location, foot-traffic, the customers that live in a certain area, etc. Time: Monday November 14, 2011 5:00PM-6:30PM Store: Bonney Lake Target - Bonney Lake WA Data Collected: Product Description Windex Window Cleaner Flintstone Children's Vitamins Dove Body Soap (Unscented) 6 pack Orbit Peppermint Gum 3 pack Total
Category Fast-moving consumer goods Health products Fast-moving consumer goods Snacks, & Foods
Pre-Picked Products Left
Pre-Picked Products Sold (In Hour)
5
4
2
0
3
2
6
0
16
6
With our results for the second trial we were again satisfied. Everything we picked was on eye level, which we believe will have a stronger visual impact to shoppers. This one was also conducted over the period of one hour.
Experiment Three: With the third and final experiment, we again chose a different location, day, and time. We still wanted to be able to get results based on the actual experiment, and not just the surroundings. One of the main things that we changed for this experiment was that we let it run for two hours instead on just one. We hoped that this small increase of time might give us better results. Time: Sunday November 20, 2011 Afternoon Store: Factoria Target - Bellevue WA Date Collected: Product Description
Category Snacks & Foods
Pre-Picked Products Left 4
Pre-Picked Products Sold (In 2 Hours) 1
Ultimate Cheeseburger Mac n Cheese Yokisoba Noodle
Snacks & Foods
4
0
Honey Bunches of Oats Almonds Favor Crest Extra Whiting Toothpaste Total
Snacks & Foods
4
4
Fast-moving consumer goods
1
0
13
5
Our results for the third experiment were not very different from our first two. On a percentage level it was more effective, but we still sold the same amount of items. After all of our trials, we concluded that this would be best done over a longer period of time, and with certain selected items. We found that the snacks and food sold better every time, and this may be due to the fact that people may have more of an open mind when deciding on their snack food rather than what they wash their face with. With the way that our experiment was executed, and with what we noticed through the results, we believe that this is a very good example of the human behavior that is classified as conditioning. This is because that we, as humans, have trained ourselves and have been trained to want the best. We do not want to be “short changed� at all, and some of us go to extreme measures to make sure that this does not
happen. If a consumer chooses the product with fewer items on the shelf because they think it is more popular, and then they have been conditioned to not only trust the opinions of other shoppers, but also to know this when they see it. These thoughts do not come from nowhere; we think these things because of past experiences. Then there is the customer who buys the lesser product because they are afraid that it might not be there when they come back. This can be linked to the same feeling we get when we are told that, “this is our last one, and we might not be getting anymore in stock.” Just those words, or thoughts, can prompt us to buy an item, regardless of the actual effect of the product. Again, we have been conditioned to feel this way. Throughout our lives we are put into this situation, the situation of missing out on a great deal. We feel immensely happy when we are one of the few to get the item, and inversely, we feel sad or angry when we do not get the item that (in our eyes) everyone got their hands on except for us. All of this reflects B.F. Skinner's theory and work on operant behavior. In some of his early studies, Skinner found out that his rats responded better to being rewarded after completing the certain task rather than being stimulated to do it beforehand.1 With this he believed that humans react the same way. Skinner went on to progress his theory, as well as other ones, and write many books. He was also a teacher, and through this inspired other great minds that went on to create more of a modern version of Skinner's theories. Even in this course, we have seen theories still being developed about this concept today. Recently a study was conducted form the University of Alberta in Canada back in September of 20092. Its premise was that shelves that looked sold-out or scarce tempted customer to purchase that product of the next best thing. "Sold-out products create a sense of immediacy for customers; they feel that if one product is gone, the next item could also sell out," said Paul Messinger, a professor at the U of A's School of Business who studied the sale of numerous items including ski passes and wine. This is exactly what our group was trying to prove throughout our experiments. Another interesting and familiar point from the study in Alberta was the ideas that people conceive as a result of sold-out merchandise. "Our research shows there's also an “information cascade”, where people infer that if a product is sold out, it must have been good and therefore a similar available product will also be desirable," he said. This concept was brought to our attention from our own group discussions 1 http://bfskinner.org/BFSkinner/AboutSkinner.html 2 http://www.sciencedaily.com/releases/2009/09/090929133252.htm
on this kind of research. We figured the reason people would create urgency and purchase items thought to be sold-out because of the information “cascade” affect Alberta found. The product is gone or almost gone; therefore it must be work and must be good. Specific findings from the Journal of Retailing saw that 61 percent of shoppers would buy a particular 5-hour ski pass for $20. This figure rose to 91 percent, when these skiers thought a 10-hour pass for the same mountain sold-out at $40. In the realm of perishable goods, a similar study saw that 49 percent of shoppers would buy a bottle of wine if they had one choice, but when they thought a similar wine had sold-out next to it on the shelf, nearly twice the number of shoppers would take the available bottle home. Here we see this urgency is obviously created by the mere image of an empty shelf or idea/concept that something is no longer readily or widely available. Signs insinuating urgency work as well. This can be seen working during Christmas shopping season, where “cascade theory” and signage sell-out the “hot toy” of the season. When you are shopping for toys as a parent, one is out of the “know” for “cool” and “not cool” toys. Therefore parents rely on the fact that millions of other parents are buying this certain toy for their children, therefore it must be the popular hit and my kid “has to have it also.” This theory works for all sorts of occasions in consumer shopping behaviors. On the other hand, an empty shelf can be somewhat annoying or frustrating to a customer, but the leaders of this study claim that the occasional sold-out items are actually good things for a store and manufacturers in order to encourage a sale. It depends solely on the particular item that is gone from the shelves. "A lack of stock for common items can indicate to consumers that a store is not managed properly because supply wasn't ordered properly. But for newer items, stores can use it as a message: it wasn't that they didn't order enough, it may be that the product was just selling so fast that nobody could anticipate it, so buy it while you can." This makes sense especially in connection with our preliminary experiment before out actual three final trial runs. We tested an hour at the Northgate Target in Seattle, WA before any of us did our own final work. We chose a basic toilet bowel cleaner, a simple face wash, a common heartburn medication, and also a NEW snack bar. The only item we sold that day was a box of that new snack bar. We can attribute this to the snack bar’s new appeal. Shoppers had not seen it before and saw they were selling out, therefore purchased a box of their own. The other items have been available and did not sell in that same time period. This could be the shopper’s idea that Target simply wasn’t stocking properly, thinking these items could not sell out; they’re too basic and have been in consumer’s view for some time. The snack bar on the other hand is something unseen and apparently good as well, since only a box or so remained. People want to feel a part of a community or something bigger than themselves. Purchasing a
popular product at the store allows people to do so just by making a consumer decision on something to purchase. The ideas and concepts we developed as a group and experimented ourselves this quarter have been discussed by both classical thinkers like Skinner and proven again by modern day groups like the studies conducted at the University of Alberta in 2009 and surely countless others. Our experiment proves this phenomenon to be real as do the ideas developed by Skinner and the studies released by college universities. It is something all retailer should and probably already do take note of. As a group we have learned something crucial for the retail/marketing environment. Whether we own our own small boutique or work for corporate America, now we have the ideas to implement with the reasoning behind them in their implementation.