With almost no consistencies in the shift of consumer behaviour, market channels or product involvement, the only reliability retailers are eagerly holding on to is the drive. As long as humans shop for reasons beyond the mere acquisition of things, physical stores will remain relevant. In short, at its core, shopping is a human activity. The evolution of retail proves that it has been a need even before money was established. In fact, the more technology advances, the more the stores become valuable, as our hunger for visceral and emotionally connected experiences will intensify.
Since the concept of money developed, the drivers of retail were altered. When the world revolved around bartering, consumers and sellers both had a mutual benefit, with no risks after the point of exchange. Challenges came prior to the barter, where the discovery phase was rather difficult. The exchange required almost no trust, and hence, there were no benefits from ‘cheating’. The limitations of the assets made values known, and the lack of competition made the relationship continuous. After money was introduced, the entire equilibrium of retail was unbalanced. For one, consumers would think twice before purchasing - suspicion became instinctive. But more so, the development of money triggered the concept of competition. For the first time in history, there was more supply than demand, and this meant, in turn, that suppliers needed to distinguish themselves from neighbouring sellers - create a unique selling point. That could happen if:
The consumers of the commerce era had limited choices for purchasing, but more importantly, the sellers had no interest nor resources for emotional expansion. It was a functional world - and so was the USP.
With abundance coming into retail, the idea of shopping beyond the necessity of acquiring goods came to be. We have established that the drivers of consumer shopping behaviours - psychological, social physiological, and cultural - have remained untouched over the eras. What did change is the way these influences are experienced. If I were to ask you what your grandparent’s favourite cheese was, they could probably write you a detailed paper describing how “Franz” had a farm, a family of six, a weekly visit, and the different seasonal cheeses he provided. Yet, I have asked several people the very same question, and to their surprise, they could not name more than two products in the refrigerator, yet they have repeated purchases for as long as they can remember. This is the difference in our worlds.
“It’s as though serendipity is dead and our own data is the smoking gun!”
- Dough Stephens, 2017.
We face different realities, priorities and experiences. At the end of the day, Franz sold his cheese, and Jeff Bezos sold [his] cheese. Franz had a delivery with your favourite brand, and so did Amazon. Only Franz didn’t ask any questions to figure it out - he built an authentic relationship over time - a concept we are not very familiar with in today’s fast moving consumer world. Whether we prefer interacting with a screen, a robot or a human - trade will happen. We want to understand why.
Ironically, as our lives become more hyper-connected by technology and driven by data, the physical world around us becomes less discoverable and the odds of encountering things in an unanticipated way become much slimmer. The element of surprise drives us to even more curiosity. The most successful shopping behaviours always revolved around the moments of discovery. The thrill of uncovering mysteries affects us on more than one level.
More than ever today, our ‘exploration’ circles are virtually growing but shrinking in reality - in quality and quantity. From social networks to TV shows to consumed goods, we are shutting the doors to new experiences by using ‘smart’ targeting through data analysis. Instagram’s homepage will recommend posts ‘just for you’ by analysing your previous behaviour through advanced metrics only to recommend more posts in the same circle. Netflix is doing it too as they offer series or movies “because you watched Friends,” for example. Recently, a ‘Netflix Popularity’ category was added, this also taps into the social drive. Amazon, Google, Apple, even less brands which aren’t associated with technology, like Lego, l’Oreal or Nespresso - they all do it! They echo the thoughts as thoughts, beliefs, likes and dislikes - the more personal they are able to market the future, the more frightening the reality of it is. The discovery aspect of retail is disappearing with its’ intelligence, it’s becoming more and more difficult, as a consumer, to be surprised.
Our innate subconscious seeks out crowds, no matter how much we complain about the inconvenience of it. The inconvenience in this case, comes with the fulfilment, not the discovery aspect of shopping. Have you ever found yourself in a doubtful situation, trusting the social confidence? Let’s say you were cautiously driving on a road unfamiliar to you, suddenly, a car drives by at a rather fast pace - you are more likely to follow this car thinking “they know”. Truth of the matter is, though, your decision to do so is instinctive, and has no factual justification. This is Robert Cialdini’s theory of social proof. Crowds are the most immediate form of social proof, a reality that hasn’t changed since the start of consumerism.
When there is a high presence of activity in a place, it is a subconscious indication that something of value is happening there. Think of the Apple Store, for example. They are the masters of this phenomenon. When Steve Jobs announced the launch of the iPhone, thousands were camping and queuing for nights on-end. When apple realised the impact this had, they applied for a patent called “enhancing online shopping atmosphere”, as they realised this social excitement was absent from its’ online experience. They had a vision a century ago that still proves valid today. The dynamics created by real-world crowds feed into our innate fear of missing out. This flash of excitement is what makes the physical experience memorable and addictive.
The relationship between shopping and coke is dope. Literally. When a consumer has a good shopping experience, our neurological response to it is identical to a high from cocaine - they both release a chemical called dopamine. Dopamine, as a neurotransmitter, controls our sense of pleasure, motivation, attention and/or action. In non-scientific terms, dopamine is a reward that shows up with pleasure - sex, drugs, rock&roll...and shopping.
Dr. Robert Sapolsky is a professor of biology, neuroscience and neurosurgery. He is the reference point of modern-day studies of dopamine. Sapolsky conducted several experiments to try and understand the effect it would have on humans, highlighting that dopamine is central for anyone who wants to understand reward, pleasure and happiness.
In one of his experiments, monkeys were asked to complete a task to receive an award. He wanted to understand the highest level of dopamine during such activities, assuming that it would be the point of receiving the reward. Every time the light came on, the monkey needed to perform the task. To his (and my) surprise, the dopamine levels were the highest just as the light came on, which signalled that the opportunity to earn a reward was imminent. In other words, the anticipation to get the reward was more exciting that the reward itself.
Now Sapolsky changed the rules a little bit. When the task is done, you maybe get a reward. He found that when the monkey receives the reward only 50 percent of the time, the dopamine levels sky rocket! The whole journey is generally releasing more, but the point between the work and reward was higher than any level noted prior to this.
The highest levels of uncertainty result in the highest level of dopamine. This means that reducing the reward to 25 percent or increasing it to 75 percent would reduce the joy resulting from it. This explains many things, from gambling, relations, addictions, religion...pretty much all the decisions we make. It also affects shopping. Retailers can use this study to parallel the anticipation of their shoppers being at its peek when they are in the discovery phase, and even higher if there is a balanced risk in fulfilment.
Unfortunately (or not, for conventional retailers), what Amazon and its’ likes are doing by enlarging the selection and eliminating the friction is, on one hand, satisfying the rational part of the brain; but on the other hand, it is making our experiences dopamine-light, i.e.... less satisfying. Truly enjoyable experiences will be able to tie together a dependable and consistent result while injecting some serendipity. Think Instagram.
With the introduction of technology came the complexities of behaviours. Traditionally, marketing has always been about consumption, but with the rapid and discontinuous disruption technology brings, the nature of consumption is questioned. Consequently, the consumer behaviour in this unpredictable marketplace is likely to become more and more fragmented. The speed at which the behaviours are changing and the postmodern era reflects a movement away from the rational and towards the intuitive.
With the internet came the immediate and unlimited access to information which brought with it a new way of understanding brands, products and markets. This reduced the friction along the path, but consequently, also reduced some of the pleasurable aspects. The technology development will help clarify the possibilities of replicating physical experiences in a virtual world, or the necessity of doing so. It can help us envision a reasonable future where the ‘worst of both worlds’ is eliminated, and the best is enhanced.