Hard Habits To Break

2 03 2012

We live in unsettled times. Google’s new privacy policy went into effect yesterday. Just a week or so ago, the story broke about how a Dad discovered that Target knew of his daughter’s pregnancy before he did. And the book The Power of Habit: Why We do What We Do in Life and Business by Charles Duhigg hit bookshelves (or tablets, as in my case).

All the while underscoring the hard reality that marketers want to, and in many cases already do, know alarming amounts of personal information about us. Everywhere we shop, we are being monitored. Tested. Tracked. Digitized. Analyzed. Theorized. It’s almost like we shop in a laboratory, and retailers are the experimenters.

All in the name of profit.

But this is not new news. Actually, it is rather old. When I was in grad school in the 80s, I did an MBA paper on motivation research, a marketing method used in the 40s and 50s to try to apply Freudian psychiatry to buyer behavior. A few years later in the PhD program, I built my dissertation foundation by studying supermarket research, specifically how shelf space allocations were made.

And how supermarkets tested various combinations to find the right mix of this and that, as well as store layouts, all with the idea of maximizing profit.

So if you feel like a rat in a maze next time you shop for groceries, it’s OK. Isn’t it comfroting to know we are thought of as human rodents?

Today the in-store testing is far more sophisticated, because cameras can be hidden virtually anywhere, including inside digital signage. Those loyalty cards we use, along with our plastic payments, are mere foreplay in the world of retail research. Eyeball tracking tells retailers what parts of the sign we see first, and where we tend to linger the longest. That information is golden, because retailers can then better utilize the available display space to appeal to us.

Some stores are using electronic price tags, which can be altered from a central location depending on time of day or week, and, I am thinking insidiously here, by who happens to be standing nearby. Think it hasn’t already been done before? Amazon got in a little hot water a few years back for doing just that same thing, but in an online arena.

As Duhigg writes (and I am reviewing the book for possible use next Fall), our shopping habits tell our story. We are an open book. We may not realize this every time we cross the retail threshold, but what is known about us may indeed even rival that held by an omniscient God. And if you don’t believe in God, then maybe you had better consider the pantheon of information systems owned by Walmart, Target, Citibank, Visa, et al, as coming close.

As I once taught in retail Marketing class, it’s all about putting the right product at the right price in the right place at the right time. Or, to put it more simply, selling more stuff.

George Carlin would be proud.

As for we mere mortals, I truly believe there is little we can do, aside from joining an ascetic cave-dwelling cult. It]s too hard to wean ourselves from the tings and stores we hold dear. We are mere cogs in Machina Economica, modern-day dogs in Pavlov’s laboratory. And I can live with this. It’s the price we pay for living in a high-tech, no-holds-barred, winner-take-all free economy.

Now if I could just figure out how to navigate my supermarket.

Dr “The Bare Facts” Gerlich





The Day Has Come

2 03 2012

It is here. There is no turning back. You cannot hide. Get used to it. Or retreat to a self-imposed Google exile.

Good luck with that.

Today is the day that Google’s new privacy policy go into effect. It has been talked about, debated, feared, and otherwise put through great amounts of hand-wringing. People are upset, but then again, they always do whenever their online privacy is at stake.

Google was even nice enough to consolidate about 70 different policies into one handy document so that we have a better chance of understanding it. Of course, no one ever reads those Terms of Service agreements anyway, so it is rather a moot point. A nice PR-positive moot point, but moot nonetheless.

http://mashable.com/2012/03/01/googles-privacy-policy-effect/But what’s really happening is that Google has now allowed its various services to talk across platforms, whereas prior to today they tended to be self-contained little accumulations of usage history.

And while today is technically the big debut, the policy began leaking out a couple of weeks ago. I noticed that, if I was logged in to my Gmail account, when I went to YouTube it would suggest videos posted my some of my Google+ friends. To be honest, I was creeped out the first few times it happened.

But this is really only the beginning. because nearly everyone on the planet with a computer or smartphone has a Google account of some kind, it basically means that our lives are now completely open books to Google. It can now access our search histories and match them to our emails, our video searches and views, even our pictures on Picasa.

So don’t be surprised if you start seeing more highly targeted advertising in one arena based on what you did in others.

Privacy fearmongers worry that our personal information could easily be breached, as well as used for exploitative commercial gain. But guess what? We have never paid a single nickel for any of Google’s services. And this just in: Google is really in the advertising business.

Not search. Not email. Not document storage. Not videos. Nothing. Nada. Zip.

And the more ads they can sell, and the more they can sell them with frightening accuracy, the more money they stand to make.

So what’s a frightened user to do? Well, for the most part, just suck it up. Sure, you can drill down through your account to delete your web and video searches, and you could use one service (e.g., YouTube) without also logging in to your Gmail first. But guess what? Google also tracks your IP address, so it will still know you.

Aside from simply shunning all Google services, we don’t have a whole lot of options. Sure, we could search at Stealth, but I am not convinced they will be around forever with their business model.

More realistically, just be careful what your searching for, don’t watch any questionable videos, and keep your email clean.

Because Google is watching you. And it wants to help someone sell you something.

Dr “D-Day” Gerlich





Bullseye

21 02 2012

Life was so much more private back in the days when we used cash for everything. Retailer point-of-sale systems did not have bar code readers; individual items were categorized with only a few descriptors, limited by how many unused buttons were on the cash register. From an inventory control and marketing research perspective, it was pretty much useless. But at least customers had some degree of anonymity.

But now we are as transparent as Glad Wrap. Thanks to credit cards, debit cards, check and loyalty clubs, retailers are able to track each and every purchase we make, simultaneously adjusting inventories and reorder points, along with building complex customer profiles.

Yes. Profiles. As in, “We know what you did last summer.”

So I was not at all surprised when my colleague, Dr Rex Pjesky, posted this story on my FBH Wall about how Target figured out a teen girl was pregnant. Before her father knew. Turns out Target was sending baby-related direct mail pieces, and Dad accidentally saw them. Can you say surprised?

So much for secrets.

That Marketers know everything about you really is no secret these days. It’s just that we tend to forget that they are watching. All. Of. The. Time. Worse yet (or better, if you are a marketer), they have amazingly accurate algorithms that can predict if you…well…happen to be pregnant. It’s not a whole lot different from the data mining that goes on with Pandora’s Music Genome Project, or Amazon’s inexplicable ability to find something else that you need to buy (because “Others who bought this also bought…”).

Which means that we are all unwittingly contributing to an ongoing data collection project focused on you. Me. Every single one of us. And every time we purchase something anonymously (i.e., cash sans loyalty card), we are making another contribution to the ol’ database.

I see the effects of this every time I open my Netflix account. I am bombarded with suggestions to watch teen TV shows and animated movies. Of course, my kids have completely hijacked my Netflix account, so I should expect no less. But I do take a little delight in thinking that, somewhere deep within the corporate belly of this movie giant, someone is wondering, “Now why the heck did the Gerlich kids watch The Wild and Wonderful Whites of West Virginia?

Score one for Dad. I actually was able to watch something I wanted to watch.

Still, I cannot blame Target, although the Dad in me admittedly would be surprised and probably furious to find out my teenage daughter were receiving baby-related junk mail. I think someone would have some ‘splainin’ to do.

Now about those two cases of microbrews I purchased two weeks ago in Albuquerque…

Dr “In The Cross Hairs” Gerlich





#loweshatesmuslims, Or, How To Screw Up In Social Media

20 02 2012

Lowe’s Home Improvement Stores announced on Dec 10, 2011, that it had pulled its advertising from TLC’s All-American Muslim, an 8-part documentary chronicling the lives of five Muslim families living in the Detroit area. Referring to the show as a “lightning rod,” Lowe’s had come under fire from individuals as well as the Florida Family Association for advertising during the show.

The decision resulted in a firestorm of activity. Lowe’s responded by posting a statement/apology on its Facebook page. This produced over 28,000 comments, many of which were vitriolic in either their support or criticism of Lowe’s.

Lowe’s subsequently deleted its apology as well as the comments. This produced more controversy, with Twitter users launching the #loweshatesmuslims hashtag. This resulted in thousands more comments on Twitter, but because Twitter does not regulate the use of hashtags, Lowe’s could do nothing.

Shortly thereafter, Lowe’s then posted another apology on its Facebook page, this time keeping user comments online.

Although Lowe’s was not the only company to pulls its advertising from AAC, but it bore the brunt of the media attention.

MediaBuffs launched a nationwide online survey within days of the controversy. The purpose of the study was to measure consumer attitudes toward Lowe’s, as well as their likelihood of shopping at the store in the future.

A sample of 379 participants was utilized; all 50 states and Washington, D.C. were represented, thus guaranteeing a good cross-section of American views. Participants ranged in age from 1 to 76, with an average of 35. The sample was balanced with regard to gender (48% males, 52% female), as well as political affiliation (Republican, Democrat or Independent).

The study applied the Theory of Planned Behavior, a comprehensive theory used widely in Marketing, Management, Communication and other fields. TPB is often used to predict consumer behavior based on the antecedent conditions of attitude, subjective norms, and perceived behavioral control. As a result of these components, influence may then be felt on a person’s desire, behavioral intention, and ultimately, planned behavior.

The survey included scale items that measured all of the various constructs. A method called Structural Equation Modeling produced a path model that showed the relationships between all of the variables.

The results showed that, while users did not have any clear attitudinal predisposition toward avoiding or not avoiding shopping at Lowe’s, it was the perceived peer pressure of subjective norms that predicted they will avoid shopping there in the future. In other words, people were willing to alter their shopping behavior based on what they thought their friends and family members would prefer they do. In this case, they perceived these people to prefer they not shop at Lowe’s

Pulling ads from the show inadvertently created a bigger problem than the ads did in the first place. This shows the power of social media in not only disseminating information and welcoming reply, but also the effect it can have on the brand.

It remains to be seen whether consumer plans to avoid shopping at Lowe’s will continue long-term. It is possible that, over time, people will forgive or forget, but this is no certainty

Companies must be cognizant of how powerful social media can be. Decisions must be vetted fully before enacted, because it is impossible to take the microphone away from anyone on Facebook or Twitter.

MediaBuffs is a consortium comprised of research principals Dr. Kristina Drumheller (Assistant Professor of Communication), and Dr. R. Nicholas Gerlich (Professor of Marketing and Department Head). Both are on the faculty at West Texas A&M University. They conduct academic and marketing research online at mediabuffs.org, as well as in the classroom and offsite for clients. They can also be found on Facebook and Twitter. Associates from WTAMU and other institutions join them on selected projects.

Joining Drs. Gerlich and Drumheller on this project were WTAMU colleagues Dr. Emily Kinsky (Assistant Professor of Communication), Dr. Meagan Brock (Assistant Professor of Management), and Mr. Marc Sollosy (Instructor of Management).

Dr “That’s The Down Lowe’s” Gerlich





Supersize Me, Part Deux

1 11 2011

In 2004 Morgan Spurlock caused our collective jaws to drop as he documented what one month of McDonald’s can do to a human body. He ate three meals a day at the golden arches, and whenever asked if he wanted to supersize anything, he responded with a resounding “Hell yeah!”

He gained a whopping 24.5 pounds, saw his cholesterol go to the moon, suffered mood swings, and his BMI go out of the park like a David Freese home run (as he ducks for Ranger fans throwing brickbats).

But a recent study published in the Journal of Consumer Research says that supersizing is a surefire way to boost your status.

Wait. How’s that?

Turns out that study participants gave higher social status ratings to people who chose larger drink sizes. A related facet of the study split participants in two camps. One was told to remember a time in which they were in a position to boss others, while the second group was told to recall a time in which they were the ones being bossed around. All were then asked a battery of questions asking how powerful they felt. Not surprisingly, those who recalled the “being bossed around” time felt the least powerful.

Next, everyone was offered a smoothie, available in three sizes. The ones who felt the least powerful preferred the largest of the three sizes. The authors then concluded that not only do we confer status on those who select large sizes, but we ourselves tend to size-up if we feel powerless.

The implications of this study are significant in that it explains a lot of inclinations to go large, as well as think positively of others. Bigger is better, at least when it comes to drinks (and perhaps by extension, food). So is that Aussie trying the 72oz. steak at Big Texan a real high class kind of guy?

Or does all of this actually predict (and explain) a big part of this nation’s obesity problem?

Bingo.

You see, as the authors so deftly point out, status is not necessarily conveyed because of owning or using scarce resources. We actually use far more pedestrian products to do the same.

And that is the scary part. Of course, all of this is culturally relative. Each society determines what things are held in high esteem, and what is not. In addition to diamonds, Rolexes and Mercedes, apparently we also think that Big Gulps somehow bestow status among the users. Worse yet, we buy the same Big Gulp to assuage our own feelings of powerlessness.

Note the differences. In the first case, we think highly of someone else. In the second, we think highly of ourselves (and maybe not even consciously consider whether others will do likewise).

Which means we could all save a lot of money by skipping the diamonds, Rolexes and Mercedes, and just opt for Supersizing everything. It’ll pick you up when you’re down, and will also others think you are one social stud muffin.

Never mind that you’ll look like Morgan Spurlock did after that fateful month.

Dr “So Does The Tall Beer Make Me Look Cool?” Gerlich





Tell Me What You Really Think

8 09 2011

Many years ago, while I was pursuing my MBA at Indiana University, I did a research paper on a topic of my choice. Somewhere along the line I had become intrigued by the topic of motivation research, a popular practice in the 1950s that marketers used to try to get inside people’s heads. The only problem was that, at the time, about the only methods we had to go on were an outgrowth of Freudian psychiatry.

In other words, lots of projective techniques and highly subjective evaluations.

But that did not stop marketers from doing it anyway, because there was money to be made if you could only get at what really motivates people to do things. Vance Packard became popular with The Hidden Persuaders, as well as slew of sequels. More of a journalist and social critic than marketer, though, Packard described the evil going on in the field.

And about the time that Packard started writing, marketers started dabbling in subliminal persuasion, resulting in the famous “Drink Coca Cola” and “Eat Popcorn” test in a New Jersey movie theater (in spite of the reports, there was no solid proof the subsequent rise in sales could be attributed to the subliminal suggestions).

Later on in the 1960s, Wilson Brian Key wrote three sensationalized books on subliminal advertising, but he often went so far off the deep end in his accusations as to fully discredit himself.

From then until just recently, researchers had all but given up on truly figuring out the inner psyche of shoppers. It was too hard to make generalizations, other than the fact that the findings were not generalizable. Sure, it would be nice to know what drives people to take up dangerous habits (e.g., smoking), what effect an embedded phallic symbol might have on purchase, and whether air brushing erotic images or the word “s-e-x” could entice people to unconsciously pick up a product while in the store. But could the findings be replicated? Would different observers draw the same conclusions? Would a sample of 100 yield 100 completely different results?

But that’s all changed, thanks to the emerging field of neuro-marketing. Starting first with fMRI (functional Magnetic Resonance Imaging), and now more recently EEGs, marketers in the lab can now peak behind the curtain of personal privacy and see exactly what is going on inside our head. Neurons firing. Hippocampus aroused. Brain waves dancing.

One of the latest efforts to probe the human brain is Mynd, a rather strange looking hair piece that users don while watching TV shows and ads, or being presented with products. You see, what people say is one thing; what their brains do, on the other, is quite another. Mynd allows researchers to see what is going on in the mute cranial area. So while we say we like something, etc., what we may really be doing is trying to subscribe to socially acceptable norms. Those partying neurons, though, tell another story.

If this sounds like the 1950s all over, think again. This is real science, not just “lie-down-on-the-sofa” psychiatry. It is measurable. It is replicable. It is generalizable.

And, I suppose, it might be dangerous. But not in a threatening kind of way. No, I mean in a marketing way, because if Apple knows that the mere mention of its name sends tingles up and down my spine, then their marketing focus should be more on the sizzle, and less on the steak. It’s how Coca Cola has come to know that, in spite of blind taste tests that show little favoritism among cola drinkers, its name evokes something far more than fizzy caramel-colored refreshment.

Of course, you have to wonder how they get people to put these things on in the first place. As one of my colleagues and friends said to me last night, “What I want to know is why anyone would subject themselves to this machine? Boat loads of cash?”

True that, my friend. They would have to sweeten the experience considerably before I would want to spend an evening wearing one. Besides, it might muss up my ever-so-slightly receding hair line.

Still, I cannot help but concede that this is the future of marketing research. Sure, we’ll continue to do lots of surveys and focus groups like before, but increasingly we will see companies ponying up big bucks to take a look under the hood. In an arena whereby even one additional share of market can mean tens of millions of dollars, it is well worth marketers being motivated to engage in such research.

Because there really is a battle going on out there, and the battle is for us and our money. If that isn’t motivation research, then I don’t know what is.

Dr “Be Careful With My Hair” Gerlich





In The Wearhouse

31 08 2011

Not too many years ago, I was wandering the aisles of Kohl’s. And not that I was particularly worried about what I might find, I began looking at clothing tags in the Men’s Department. It took only a couple of minutes to conclude I was standing in the middle of a textile league of nations. China. Guatemala. Pakistan. Bangladesh. Heck, there were countries I didn’t even recognize.

Maybe they were new or something.

As a business kind of guy, I fully understand why companies source their wares overseas. It’s all about cost, and the most important cost factor is labor. So important is this factor that the US often ships cotton and fabric to other countries to have them assembled into clothing.

And shipped right back here. So you can buy them in Kohl’s.

Although I get the cost savings aspect of the equation, I never really gave much attention to other variables, things like working conditions, living conditions, safety, child labor practices, etc. Yes, I know all about the various boycotts that have been waged against American retailers for selling goods allegedly produced in sweatshops, and I recall the problems Kathie Lee Gifford had in the 90s when suddenly she became associated with the whole mess.

But when I read Kelsey Timmerman’s Where Am I Wearing? this summer, I realized there was something I had missed entirely.

WAIW is the Common Reader selection for West Texas A&M University this academic year. All freshmen are required to read the book. I have chosen to make it a required reading in my MBA Seminar in Marketing course as well. Kelsey has graciously agreed to work with my colleagues and me in conducting research regarding people’s views toward the examples he cites in his book. He’ll be on campus at the end of September to speak at Freshman Convocation, as well as make at least one other nearby appearance.

Kelsey’s preoccupation with the “where” of what he was wearing came, coincidentally, from a similar such “let’s look at the tag” experience as had I. The only difference is that Kelsey was motivated to write a book about it. So he traveled around the world, trying to find the factories that manufactured his t-shirt, jeans, etc. He was able to get inside factories and meet workers. He lived and walked among the people who made his clothes. He walked a mile in their shoes. Literally. Or maybe it was flip-flops.

It’s not that Kelsey is against foreign-made clothing. He’s not opposed to free trade. But he is concerned about the people who effectively work for us, often in less-than-perfect conditions. Yes, he understands that wage comparisons must be put into cultural and economic perspective, and he is very much aware of the fact that some employment sure beats no employment. Because the latter often leads to hunger, homelessness, and even prostitution.

More importantly, though, Kelsey has realized that, in rather stark opposition to the TOMS shoes model of donating a pair of shoes for every pair we purchase, third world conditions are not about being shoeless. It’s about poverty.

Which will make for a very interesting campus visit this fall given that TOMS’ founder Blake Mycoskie was just on campus last April as a Distinguished Lecturer.

So at the end of the day, Kelsey’s mission is not to simply toss people fish, but rather to teach them how to do it themselves. And by drawing our attention to the country of origin of everything we wear, he hopes to make this our focus. It’s not about being pro-union. It’s not about guilting people into buying American. No, it’s about raising the collective consciousness about the need for more global education.

In a Facebook Message to my colleagues and me, Kelsey said it perfectly: “My book has converted “free trade will save the world” folks to anti-sweatshop activists and anti-sweatshop activists into free traders. I’m not sure what success is to me. I guess I want to get the reader empathizing with the workers and those who live in poverty and start thinking about these issues in terms of the people impacted for better and/or worse by them.”

Which gives all of us something to think about the next time we find ourselves in Kohl’s

Dr “Tag, You’re It” Gerlich