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Between the lines: why do people behave irrationally and how to make money on it?
25.11.2013 5840

Between the lines: why do people behave irrationally and how to make money on it?

We have carefully read the book of American researcher Dan Ariely, “Behavioral Economics”, and now we are eager to share with you some knowledge about what illogical actions are made by absolutely every person, as well as modest assumptions about how this can be used in the shoe business.

Dan Ariely's observation: It is difficult for people to make choices when objects have no common features for comparison. For example, the girls studied could not decide who they would rather go on a date with - conditional George Clooney or Brad Pitt. But as soon as slightly worsened versions of “Clooney” and “Pitt” were sequentially added to the photos of these types of characters, the women immediately realized who they liked more. It turned out that on the sheet with photos “Pitt”, “Deteriorated Pitt” and “Clooney” the type of “Brad Pitt” seemed to be the most attractive, and on the sheet with the versions “Pitt”, “Clooney” and “Deteriorated Clooney” the choice most often fell on the type of George Clooney. The essence of this observation by Dan Ariely is that when a thing has an analogue for comparison, the thing seems much more advantageous not only in comparison with its “flawed” option, but also in comparison with all other things that seemed to be equivalent in value.

Shoes Report Assumption: This feature of human behavior can be used in merchandising. Try to put poorly selling models with even more unattractive, but similar in type. And those that seem completely hopeless leftovers can be ventured to present with bestsellers of other categories. For example, outsider ballet shoes can increase their chances of being sold next to a hit stud, because the buyer will not be able to identify a favorite among them, but if properly presented, they will fall under the “charm” of both.

Dan Ariely's observation: As if the newly hatched goslings, taking for mother the first object that came into view, a person remains under the power of the first price he sees for a long time. This is called the imprinting effect, and its peculiarity is that the first price becomes an “anchor” only when a person seriously thinks about buying at this price. Even if the “anchor” price is too high or too low, a person will consider it fair and will begin to compare the price of all other goods with this very first seen anchor price.

Shoes Report Assumption: It is worth placing bestsellers on display cases and equipment in the entrance area, for which it is not a pity to charge a high price. Paying attention to the excellent boots (and even having a brief thought about whether to purchase them) and their price, the buyer will compare this price with the price of boots placed deep in the hall. If the "anchor" price is high, boots on the far shelves will seem an extremely advantageous offer.

Dan Ariely's observation: People very quickly get used to the things that they want to have, even if things in fact do not belong to them. In addition, the more efforts a person has to make to master a thing, the more valuable it becomes in his eyes. This contradiction successfully cakes auctions, fueling a real struggle for the lot between potential buyers. And the effect of habits is used by stores through the campaign "return if it does not fit."

Shoes Report Assumption: Do not be afraid to take risks and give an unconditional guarantee of return. Try the phrase "you can just return the boots if you try them on at home and realize that you don’t like them." Most likely, the percentage of returns will not be as high as usual: it will be psychologically difficult for customers to part with a thing that they have already considered theirs.

Dan Ariely's observation: Adaptation to a new price is best tolerated by a person if, at the same time, the product or service has also changed.

Shoes Report Assumption: If you are planning a price increase in your store, do not forget to create an entourage to improve the quality of goods and services. Change the lighting, defuse the layout, set up a sofa or print badge sellers.

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