In The New York Times this summer, Cass Sunstein, director of the Program on Behavioral Economics and Public Policy at Harvard Law School, wrote about “predictive shopping.” (“Shopping Made Psychic,” Aug. 20, 2014.)
It’s about how the savviest retailers, with enormous amounts of data, can predict what their customers will buy, and when.
With that data, retailers can target their marketing materials and coupons. (Borrrring!) Or they can just go ahead and send merchandise their customers hadn’t even asked for. (Wait, what?)
Sunstein’s random sample of consumers showed that 41 percent would enroll in a program in which retailers sent them merchandise based on their prior purchases, and 29 percent would agree to receive such merchandise, even if they hadn’t signed up for the program.
Those respondents were even okay with their habits being tracked and their credit cards being billed without their prior acknowledgement. What happened to privacy-intrusion outrage?
This model of high-tech 21st Century commerce has actually been used successfully before – in 1926. Starting that year, The Book of the Month Club began sending its members new books every month, whether they’d ordered them or not, on the basis that they’d already indicated an interest in romantic fiction or historical biography or self-help.
Of course, the Book of the Month Club – and its descendants, like the Columbia House record club, the wine of the month club, the cheese of the month club, the hot sauce of the month club, etc. – also based their model on the assumption that most people wouldn’t bother to act on the clubs’ return-it-if-you-don’t-want-it policy.
Many of today’s e-commerce sites use similar target marketing techniques. In fact, Amazon also built its business on books. But Amazon at least waited until people ordered the book!
“On the basis of this evidence, here’s a prediction of my own,” wrote Sunstein. “In the coming decades, we are going to see much more in the way of predictive shopping, and a lot of people are going to be enthusiastic about it.”
But Sunstein isn’t so confident of his prediction once the conversation turns from books (or whatever we’ll be reading in 2030) and household commodity products (or whatever we’ll be using to clean whatever we’ll be cleaning), to apparel, or food-related merchandise or interesting new appliances, consumer electronics and gadgets.
“Whenever shopping itself is fun,” he writes, “whenever serendipity and surprise are valuable, we might want to choose on our own.”
So here’s something you don’t need a Harvard professor to tell you: The more inviting the retail experience, the higher the customer traffic.
That’s a familiar insight for retail designers. I don’t think that’s changed since 1926.
As a journalist, writer, editor and commentator, Steve Kaufman has been watching the store design industry for 20 years. He has seen the business cycle through retailtainment, minimalism, category killers, big boxes, pop-ups, custom stores, global roll-outs, international sourcing, interactive kiosks, the emergence of China, the various definitions of “branding” and Amazon.com. He has reported on the rise of brand concept shops, the demise of brand concept shops and the resurgence of brand concept shops. He has been an eyewitness to the reality that nothing stays the same, except the retailer-shopper relationship.