I wanted to quickly write up a little thought that cropped up during a conversation last night. Skirting around behavioural economics and nudging, and whether it is something governments should really be doing, I found myself frustrated that it isn’t even done very well by commercial outlets.
My main bug-bear with the way the government wants to do it is that it is ideologically-driven and a bit sad to focus on changing minds by manipulative persuasion, rather than compelling actions. That’s not what a government should be aiming for, it’s small-minded.
As part of behavioural economics on the high street and in supermarkets, the act of nudging is designed (ostensibly) to tip consumers in favour of the retailer. To eke out a little bit of spare change, encourage the take up of three-for-two offers or simply choose the item that offers the retailer a greater profit margin. Excuse the oversimplification, here is Ogilvy’s Rory Sutherland talking about it in a more plummy voice than I have.
Key nudge elements in-store are signs.
That’s not a great example, but you understand. It’s not too brazen (uncharacteristically for Tesco), but suggests a pineapple might be a good addition to your basket this week.
The other important nudge tool in supermarkets is a classic piece of direct marketing dressed up as helpful advice.
Good. That’s better. It could be helpful, but it’s very scattergun, not personalised. I hold in my hand a list of ingredients that, if the mood strikes me, I may be susceptible to buying. That’s where it stops though.
Every week or so, I receive special offers from my supermarket, directing me to money off or highlighted products in their online store. I look, but I don’t shop online. Once I close that e-mail it is gone. Yet, they know what I buy. I write a shopping list and go to the supermarket. I buy the things on it (and the odd item that isn’t). I get to the checkout, I pay, swipe my loyalty card, gather points and leave. This is where I feel loyalty cards are so pathetically exploited.
Broadly, customers have no loyalty to stores, they simply collect loyalty cards for when they shop in those stores. You often see them, don’t you? The people. Flicking through their store cards for the Next, the Tesco, the Lidl, the John Lewis store card? You see them, looking for the right card, slightly flushed that their loyalty is under scrutiny at the checkout. You see them, the people, they do it, they find the card and pay. They’re not loyal, because the only reward is at the checkout and accidental.
The two places you interact with your loyalty card are at the end of your transaction and by e-mail marketing. If an organisation a) knows what you buy and b) knows what it wants to sell this week/month/quarter — where is the recommendation engine?
I want my loyalty card and buying behaviour to be exploited in my favour. If I’m going to be nudged, nudge me in a direction I might like. Put the loyalty interaction at the start of the “consumer journey” around the supermarket.
So. Physical recommendations, a scenario.
- Enter store, swipe NFC/RFID loyalty card.
- Receive print out of most recent one/two/three shopping purchases (your choice).
- Similar, cheaper or on offer items identified on your shopping list with alternative recommendations. “Bought a grapefruit last time, why not try a pomelo? They’re on offer and taste great.”
- Shopping list fulfilled, tastes broadened (possibly even healthier), pocket may be happier.
- A warm sense that although you are a statistic on a spreadsheet within a massive corporation, you are cared for and thought about. You feel a bit more loyal.
It’s not that hard, surely?