When Clarence Saunders opened the first Piggly Wiggly store in Memphis, Tennessee, in 1916, he heralded a revolution. He introduced a self-service grocery model that empowered customers to gather their groceries without the assistance of a store clerk. This innovation was not merely a change in shopping procedure; it created immense value by reducing costs, enhancing customers' shopping experiences, and offering them independence and choice that was previously unattainable in American grocery stores.
In contrast, present-day grocery stores have witnessed the struggles of AI-powered self-checkout systems like Walmart. Despite their technological sophistication, they often run into problems such as customer frustration due to scanning errors or theft prevention challenges that strain the customer experience. Bernadette Christian’s account at Giant Food shows that these systems can sometimes replace one form of tedium with another rather than creating the intended value. This juxtaposition compels us to question:
What truly creates value? Is innovation—the act of introducing something new—sufficient on its own to generate worth, or is there more to the story?
Perhaps the answer lies somewhere in the middle—the marriage of innovative strategies and an appreciation for the human element.
In his work "Alchemy," Rory Sutherland puts forward a compelling argument, cautioning against the overvaluation of quantifiable data. He illustrates this through the example of obsessively tracking train punctuality by the minute, which may inadvertently direct resources away from enhancing the overall passenger experience. This relentless pursuit of numerical targets echoes the essence of Goodhart’s Law—that a metric loses its effectiveness as a measure once it becomes an end goal. This presents a paradox: while quantitative data is indispensable for assessing business performance, its predominance risks overshadowing the subtler, yet potentially more impactful, qualitative factors that shape consumer perceptions and, ultimately, generate value.
Consider the success of LEGO isn't just because they made bricks that stick together; it's really about the way these bricks let people unleash their creativity and make all kinds of things. Moving on to call centres, we note businesses vying to trim the answer time down to the fewest rings possible, assuming increased value creation. Paradoxically, by setting a standard that reflects neither the diminishing returns of customer satisfaction nor the actual contentment of the conversation itself, they misplace their strategic focus. Real value surfaces in the depth, not just the speed of resolution. The power of minor adjustments over monumental innovations is further exemplified by the 'nudge' movement, rooted in the works of behavioural economists like Richard Thaler. Such 'nudges' can take the shape of reworded reminders for better personal finance or modified layouts on nutritional labels. Outcomes from these subtle efforts often surpass those from more gigantic undertakings.
Behavioural economics and traditional economics have long grappled with the concept of value. Behavioural theories suggest that value doesn't correspond linearly with the amount of money or resources poured into a product or service. Instead, it's often the non-quantifiable elements—the aesthetic appeal of an item, the emotional connection a customer forms with a brand, or the convenience experienced in moments of truth—that engender the deepest sense of value.
So, here's the deal with these fancy AI grocery stores: Making people come to the store isn’t about going full 'Terminator' with the tech—it's about channeling a bit of that 'Ferris Bueller' charm.
Figuring out what makes customers enjoy shopping—something you won't find in a pile of wires or lines of code.
Getting into the nitty-gritty of why people do what they do—like choosing paper over plastic or splurging on that expensive chocolate—can help these stores make shopping. And just like that, you've got a store that's not just smart, but also the go-to place for happy shoppers.
Beyond BS
Stanley cups: the psychology behind the internet’s latest obsession
The Stanley Quencher tumblers have become a cultural phenomenon on TikTok, garnering over 1 billion views and driving Stanley's revenue from $70 million in 2019 to an impressive $750 million in 2023. TikTok creators and influencers have played a pivotal role in popularizing the tumblers, with some collectors amassing vast collections. The brand's strategy of releasing new colour ranges, such as the 'Galentine's Collection,' has fueled a buying frenzy, turning the once-overlooked model into a coveted item. Collectors attribute their fascination to the thrill of satisfaction, the sense of purpose, and the joy of matching different colours with outfits. Despite concerns about hyperconsumerism and sustainability, the relatively accessible price point and the desire for community connection seem to drive the craze. However, questions arise about the sustainability of mass production and the environmental impact, challenging the brand's tagline, '#BuiltForLife.' While functional, the overconsumption of these functional cups raises ecological concerns, prompting reflections on the intertwining nature of consumerism, identity, and immediate gratification in 21st-century life. Read more here: Dazed Digital
The Cultural Fall of the Indian Game Shows:
The decline of Indian game shows, from once representing middle-class aspirations to losing cultural relevance, is marked by a significant shift in cultural sensibilities. Game shows like KBC (Kaun Banega Crorepati) were initially cultural staples, symbolizing the upward mobility of the middle-class and offering an attainable escape. These shows created an ideological connection between television, the game, and the Indian middle-class viewer. However, over the last decade, the landscape of game shows has transformed. The intent has shifted towards sensationalism, often banking on tragedy porn and fetishizing participants' suffering. These shows now struggle to adapt to the modern audience, relying on obsolete motifs and problematic content, including patriarchal and nationalist themes. As a result, independent creators on YouTube and OTT platforms are emerging as potential contenders to shape the next era of trivia entertainment, leaving traditional Indian game shows facing an existential crisis. Read more: TheSwaddle
Papa John's, Domino's are vying for customers through innovation and value
Papa John's and Domino's Pizza are engaged in a competitive battle, employing different strategies to capture the market's attention. Domino's is implementing a "barbell customer strategy," targeting both value-oriented customers with promotions and higher-income customers through partnerships like Uber Eats. Papa John's is focusing on premium product innovation, shifting marketing dollars to national advertising and creating offerings like the Cheesy Calzone Epic Stuffed Crust Pizza. Both chains are leveraging third-party delivery apps for expanded reach, and while Domino's has seen growth, Papa John's is optimistic about maintaining its position. Despite differing same-store sales performances, Domino's shares are outpacing Papa John's, prompting varied analyst opinions on each company's future outlook. Read more: Yahoo finance.
Changing behaviour—one mime at a time:
Antanas Mockus, during his time as Mayor of Bogotá, Colombia, brought about a significant shift in urban behaviour by applying principles of behavioural economics. He introduced a novel initiative where mimes were used to mock and correct pedestrians and drivers who violated traffic rules. This unconventional approach proved to be remarkably successful, leading to a 50% decrease in the city's road fatalities. Mockus didn't stop at traffic management; he extended these principles to address other civic challenges like water conservation. During a severe water shortage, instead of enforcing traditional rationing methods, he encouraged voluntary conservation by raising public awareness. His creative campaign resulted in significant water savings, suggesting that such behavioural interventions can be effectively applied to a variety of public issues.
Furthermore, the successes in Bogotá demonstrate that behavioural economics has vast potential beyond traffic and environmental issues. It suggests that by understanding the underlying drivers of human behaviour, policymakers and marketers can craft strategies that effectively and humanely influence public behaviour. The case of Bogotá leads to the question: How else can we utilize behavioural economics to create positive change in society? Read more: MoneyControl
Antanas Mockus, during his time as Mayor of Bogotá, Colombia, brought about a significant shift in urban behaviour by applying principles of behavioural economics. He introduced a novel initiative where mimes were used to mock and correct pedestrians and drivers who violated traffic rules. This unconventional approach proved to be remarkably successful, leading to a 50% decrease in the city's road fatalities. Mockus didn't stop at traffic management; he extended these principles to address other civic challenges like water conservation. During a severe water shortage, instead of enforcing traditional rationing methods, he encouraged voluntary conservation by raising public awareness. His creative campaign resulted in significant water savings, suggesting that such behavioural interventions can be effectively applied to a variety of public issues.
Furthermore, the successes in Bogotá demonstrate that behavioural economics has vast potential beyond traffic and environmental issues. It suggests that by understanding the underlying drivers of human behaviour, policymakers and marketers can craft strategies that effectively and humanely influence public behaviour. The case of Bogotá leads to the question: How else can we utilize behavioural economics to create positive change in society? Read more: MoneyControl
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