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Working with his Ph.D. student Zeeshan-ul-hassan Usmani, Menezes produced a simulated supermarket environment. "We created a simulation that had agents with random preferences for buying things," he says. They found that when compared with the effects of announcing special discount offers, their customer-feedback model, called Swarm-Moves, resulted in 29 percent more sales.
In order for the feedback system to work, each customer has to receive information tailored to his or her needs, says Menezes. But in practice, this is quite feasible just by merchants using information from loyalty schemes about previous purchases, he says.
This is analogous to the way street hawkers muster the public's interest by getting insiders to pretend to buy stuff, says Nigel Marlow, a business and consumer psychologist at the London Metropolitan University, in the UK. On the one hand, this lends confidence to the research because this tactic is tried and tested; people fall for it, so it works.
But on the other hand, it suggests that the system could be open to abuse by the supermarkets. Can they really be trusted to feed customers accurate information, or would the temptation to try to artificially stimulate sales by making up purchases be too great? "There's no doubt that it will be abused," says Marlow.
Of course there are ethical issues raised by these sorts of sales tactics, says Menezes. But they are no less devious than other sales tactics currently being used, and people can always choose to ignore the messages, he says. What's more, it is unlikely that customers will even be aware that they are swarming.
Some customers will certainly resist this kind of technological intervention, says Marlow. But he doesn't doubt that supermarkets will be drawn to it, attracted by the prospect of increasing sales without having to make discounts. "They will do anything to make a sale," he says.
But Sorensen is not so sure. "It's not going to happen in the next five years," he says. The food industry is huge in America, with one in four people currently working in it, either directly or indirectly. "The only thing bigger than the food industry is government," he says. Because of its enormity, the food industry is incredibly slow to change.
If this really works, the store can lie about lots of people buying something and it will become true.
Lying is a well-established marketing technique.
I agree 100%. The research carried had nothing to do with the
ethics of sales models. You can probably raise issues
related to ethics in most things you see in supermarkets: shelf positioning, layout of the store.
The reseach was an exercise on Swarm Intelligence. Similar things
have been used in online stores. The retail case we studied
has physical limitations that online stores don't have.
need/want based buying behavior
The system would affect the want based buying behavior only. What about the need based buying, where customers have to buy the things only they need either one brand or another.
Re: need/want based buying behavior
It is likely that there would be some effect. We have not done anything on that area. There are publications that show that
"planned items" are not affected too much by impulse shopping.
Re: need/want based buying behavior
In that case, the system can help the customer to choose the brand by supplying real time information - which one is selling more.
for example brand A bought by 33% customers and Brand B by 10% etc
I find this use of technology offensive. Smart shopping carts that show me information such as how much I have currently spent, the total weight of my items, and lets me locate products I'm interested in the store would be useful and appreciated (please make the interface for this easy enough to use in no more than two presses (ie - by category and product type, not brand, since most brands are mixed in the same area of a typical store aisle)).
But manipulating me to make impulse purchases? And yes, my first thought also was, all they have to do then is lie about what's being sold - and what are you gonna do? Complain? To whom? I'm not going to go to the store manager and tell her I find her system offensive because I suspect it's lying to me. She will just nod and silently accuse me of being a grumpy old fart, which of course I am. Meanwhile she will smugly note the swarms of women dashing to and fro through the store as new items are being "sold" to other customers in Aisle 2, and Aisle 5, and then Aisle 6, and then Aisle 3, etc. I will then note that the trampled bodies should be cleared from Aisle 27, but I'm sure by then she will be ignoring me completely.
I'm the sort of person who will resent that to a degree that science has not the instrumentation to measure. My reaction will be to shop elsewhere, or if that is not convenient, to put wet paper towels over the "smart screen" where I find the information intrusive and/or unnecessary, or if that is not convenient then I will probably accidentally drop a sharp object(s) on the screen until it stops bothering me. Get it?
I find post like this one quite amuzing because I rarely undestand why people get so angry about research and technology. I also hope this is not a threat since in that case it
stops being amuzing and becomes plain silly. :)
The problem of impulse shopping is *not* with the stores but with the customers. If people could control themselves they would not be affected by this kind of technology. Customers need to be aware that everything they do has an effect in their lives. Yesterday, a study came out in the UK showing that each citizen appears in a camera (surveilance) as many as 300 times a day (http://www.msnbc.msn.com/id/3225985/).
So you are being watched get used to it! Supermarkets
are not going to to be the exception to the case.
Retails stores are *currently* using various tactics to make you
buy more. What is the difference now? Is there anyone who actually believe that a 40% discount in a store is really 40%? Or that the store is *only* making 160% profit on that product?
Our study has no privacy issues that don't exist already. The swarming idea is anonymous. We don't need to know what *you* are buying but everyone is buying.
For those interested in more details
I just replied to a few posts. Unfortunately I won't be able to do
it for all the posts due to lack of time.
I encourage anyone with spefic questions to contact us directly.
No need to use this technology
If you find this technology too intrusive you do not need to use it. I happen to shop in this Quincy Stop&Shop supermarket where they deployed the 'shopping buddy'. I am not using the gizmo.
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joe
1 Comment
What is the Mathematical equation behind the behvior
Is there any mmathematical equation Menzes finds out behind the customers behavior? if yes? what it is?
Reply
ronaldomenezes
5 Comments
Re: What is the Mathematical equation behind the behvior
The equations are inspired from equations in sales models with some ideas from swarms.
Given that this is on-going research I'd prefer not to openly
share models at this point.
Reply