Ecommerce will soon be bigger than you can imagine

Ecommerce in India will soon be bigger than you can imagine

Let us tell you why we think so. Our starting assumption is that most of the shopping online in India in the future will be done via plastic card (credit or debit card) rather than cash, because of convenience. We understand that cash on delivery is convenient too, but you still got to have cash to pay, so it’s not as convenient. And paying by card is a lot different than paying by cash.

Paying by card fundamentally changes the way we spend our money. When we buy something with cash, the purchase involves an actual loss – your wallet feels lighter. Credit cards, however, make the transaction more abstract and we don’t really feel the downside of spending money. As George Loewenstein, neuroscientist at Carnegie Mellon says, “The nature of credit cards ensures that your brain is anesthetized against the pain of payment.” Brain imaging experiments suggest that paying with plastic literally inhibits the insula. Insula is the region of the brain associated with negative feelings. It’s the brain area responsible for making sure you don’t get ripped off. So when the insula is inhibited, it makes a person less sensitive to the cost of an item, making him/her more willing to buy.

Spending money by card doesn’t make you feel so bad, so you spend money easily. And buying stuff over an app is even easier with the pressing of the ‘Buy Now’ icon. Not to forget, the Internet is full of deals that make people end up buying things that they don’t even need.

A way of boarding that saves time and lowers blood pressure

A new way of boarding that saves time and lowers blood pressure

Warning: This post is the longest we’ve ever written, but we think you are likely to find it rewarding.

There are long queues at boarding no matter which airline you travel by. And once inside the plane, we’re often waiting in line once again for someone in front us whose is trying to keep his/her cabin luggage overhead. Imagine the time that gets wasted for you and the airline. In this industry, more than any, time is money. The quicker the airline can board, the more it will be on-time, the more satisfied will be its customers, the more money it can make. But how can this be made possible?

Southwest Airlines in the US has a unique solution to this problem. Southwest doesn’t have seat assignments. Here’s how it works:

In airlines that assign seat numbers, when you’re trying to get to your seat, you’re not only waiting for someone to find their seat, you’re also waiting for them to put their bag in the overhead bin. So if you’re assigned to say, Seat 26A, you must wait until Seat 22C puts his/her bag in the overhead compartment.

But if you’re on Southwest Airlines, the procedure and behaviour of passengers is completely different.

So let’s say you’re flying on Southwest with a carry-on bag. You’re anxious about getting a window seat and making sure your bag gets in the compartment, so you check-in online 24 hours beforehand (the beginning of the check-in window), and are placed in boarding group A. Group A gets to board first.

Southwest keeps in mind that most people don’t care if they sit in row 10 or row 25, but they are likely to have a strong opinion about having a window or an aisle seat.

Fast forward to the airport. You arrive and get into the queue for group A, confident that there is a very good chance that you’ll get the seat you want and overhead space.

Now you’re walking onto the plane and suggested to move towards the further rows. The person in front of you has a bag and spots an aisle seat in row 25, and stops to put their bag in the bin. You’re a window person, and see one in row 21. The person behind you also wants a window, and stops at row 18. Notice what happened here: no one was held up because of the person in front of them. You all sit down, and the process repeats.

The boarding process becomes similar to a conventional boarding process as the seats fill up – if you’re in Group C (last to board) and say there’s only one window seat left and it’s at the very back of the plane, you have to wait 20 seconds for the person in front of you to claim their aisle seat at the front.

Compare this to a conventional boarding process: not only would you have had to wait for Seat 21C to put his bag in the compartment, Seats 21 A, B and D have to fight with their bags, and the other seats’ bags in order to fit their bags in. Multiply this by 30 rows, and you can see how this adds time to the boarding process.

What Southwest has done is eliminate that 20-to-30 second delay for 80% of passengers and instead limited it to, say, the 30% of passengers at the end of Group C. These passenger-to-seat delays add up quickly; and with roughly 130 seats each at 20 seconds each, that’s potentially 43 minutes of delays during seating! This, among other reasons, means that Southwest can turn around their planes in about 25 minutes, the fastest of any airline.

And not to forget, lower your BP. Travelers who are the most anxious about getting their preferred seat and their bag in the bin are more likely to check-in at the first second, earning them a coveted spot in Group A. But people in group B know there is, say, a 50% chance they’ll get a good seat and space in the overhead bin. Group C knows their chances are slim of getting either. The point here is that everyone has a rough idea of their probabilities and also that the probability is the direct result of their own actions, i.e., how quickly they checked in.

And the best thing I like about this way of boarding: I’ll never be seated in the wrong seat!

Big thanks to Michele Walk, Operations Manager at Engage for the information.

The middle path to getting picked up

The middle path to getting picked up

There a lot of biases that affect the way we make choices. We of course go about our daily routine completely unaware of them. Here’s one such interesting example, called the ‘Centre Stage effect’ – our preferential bias towards items located in the middle.

Paul Rodway, Experimental Psychologist from University of Chester and his colleagues showed 100 participants a questionnaire consisting of 17 questions, wherein each question featured five different pictures of the same type of item (e.g. five scenic views). Each set of five pictures was arranged in a horizontal row and the task for participants, depending on the question, was either to pick their most preferred or least preferred item. Central items were selected approximately 23 per cent of the time. The selection rate for items in other locations averaged below 20 per cent. By contrast, no position bias was found when selecting their least favoured items.

A second study was similar to the first, but this time each array of five items was arranged vertically – once again there was a bias for the central item. A third study used real objects – five pairs of identical white socks – pinned in a vertical array on a large piece of cardboard. Again, participants were asked to pick out their preferred option and again they showed a bias for the middle choice.

These findings build on past researches showing that observers tended to overestimate the performance of quiz show contestants located in central positions.

I wonder whether this phenomenon has to do with our beliefs linking importance or prestige with being centrally located. If we look at sports podiums on which winners get facilitated, Gold being the most prestigious award, is placed in the middle. In office meetings you are most likely to find the top boss sitting in the middle of the boardroom table. The bride and groom at wedding receptions always sit in the middle overlooking the hall.

This ‘middle’ bias has implications on consumer’s shopping behaviour. If a brand has 5 variants, with the same MRP, the one with the maximum margin should be placed in the middle. If your brand competes with others on retail shelves, ensure its placed bang in the middle, as long as consumers can view all options at one go. But no guarantee about you getting picked up if you stand in the middle of your friends at the night club. Well, you could try.

The surprising psychology of waiting in queues

The surprising psychology of waiting in queues

Waiting in queues can elicit powerful emotions in us. Stress. Boredom. The nagging sensation that one’s life is slipping away. And of course we believe that the other line moves faster. While losing to the line at our left, drives us to despair, winning the race against the one to our right, does little to lift our spirits. We almost always fixate on the line we’re losing to and rarely the one we’re beating.

All of this makes for a lasting impression on your customers’ perception about your brand if you’re a hypermarket or a bank or an airline or any business whose business it is to serve people. So how does one tackle it?

Some years ago, executives at a Houston airport faced a troubling customer-relations issue. Passengers were lodging an inordinate number of complaints about the long waits at baggage claim. In response, the executives increased the number of baggage handlers working that shift. The plan worked: the average wait fell to eight minutes, well within industry benchmarks. But the complaints persisted.

Puzzled, the airport executives undertook a more careful, on-site analysis. They found that it took passengers a minute to walk from their arrival gates to baggage claim and seven more minutes to get their bags. Roughly 88 percent of their time, in other words, was spent standing around waiting for their bags.

So the airport decided on a new approach: instead of reducing wait times, it moved the arrival gates away from the main terminal and routed bags to the outermost carousel. Passengers now had to walk six times longer to get their bags. Complaints dropped to near zero!

Occupied time (walking to baggage claim) feels shorter than unoccupied time (standing at the carousel). “Often the psychology of queuing is more important than the statistics of the wait itself,” says, M.I.T. operations researcher Richard Larson, considered to be the world’s foremost expert on lines.

Our expectations further affect how we feel about lines. Beating expectations buoys our mood. All else being equal, people who wait less than they anticipated, leave happier than those who wait longer than expected. This is why Disney, the universally acknowledged master of applied queuing psychology, overestimates wait times for rides, so that its guests (never customers, always guests) are pleasantly surprised when they ascend ‘Space Mountain’ ahead of schedule.

This is a powerful ploy because our memories of a queuing experience, are strongly influenced by the final moments, according to research conducted by Ziv Carmon, a professor of marketing at the business school Insead and the nobel-winning behavioral economist Daniel Kahneman. When a long wait ends on a happy note, we tend to look back on it positively, even if we were miserable much of the time. Conversely, if negative emotions dominate in the final minutes, our retrospective audit of the process will skew toward cynicism, even if the experience as a whole was relatively painless.

But the biggest influence on our perception of queues has got to be ‘fairness’: what you feel when someone jumps the queue. If you haven’t faced a situation like this yet in India, where jumping the queue is a survival skill, you must be a celebrity. Ranbir Kapoor did it when I was first in line for the application of an international driving license. He assumed it was ok for celebrities to break queues. So he simply smiled, said sorry but guess what, it worked!

Illustration by Mayur Tekchandaney

If you’re good at math, consider yourself blessed

if you're good at math, consider yourself blessed

I struggled all my studying years with MATH (Mental Abuse to Humans). I was so bad at math that I had even developed a method of memorizing patterns to solve problems, so that I could apply them in case a similar question came up in the exam paper. If you were and are good at math, I have very high regards for you, because most of the human race is simply bad at it.

Consider these two promotions. One is a flat ‘33% off’ on the MRP. The other is 33% more quantity of the product free. In short – ‘33% extra free’. Are both similar? Which one seems more attractive to you?

If both are similar in terms of a proposition to you, but you still prefer ‘33% extra free’, you’re in the majority. In a study, Akshay Rao, the General Mills Chair in Marketing at the University of Minnesota’s Carlson School of Management, asked undergraduate students to evaluate two deals on loose coffee beans — one with 33% more beans for free, the other at 33% off the price. All the participants chose ‘33% extra free’, inspite of ‘33% off’ being a quantitatively bigger and better offer favouring the customer. (33% off = 50% extra free)

The reason why we opt for ‘33% extra free’ is not just that we suck at math, but we are also infatuated with the idea of getting something for free. It seems as if the power of ‘free’ makes us worse at math.

Now, how you take advantage of this will depend on whether you are a consumer or a marketer.

Illustration by Mayur Tekchandaney

Trust advertising to mislead

Trust advertising to mislead


Chances are you apply paste on your toothbrush the same way it is shown in the ads (as shown in the illustration above). Then you place it under the tap to add a bit of water to make it moist. I hear you saying ‘How else?’ right?

Well, here’s what the dentists recommend. Dentists say we should squeeze the paste at a 90 degrees angle into the brush from the top, so that the space in between the bristles gets filled with the paste + that we don’t add any water.

This works in two ways. First, the paste keeps getting released from the toothbrush at a consistent pace, ensuring that the paste comes into use, even after the initial burst of foam in the mouth. Second, dentists recommend we don’t add water because it leads to breaking and slipping of the paste out of the mouth. (You might have noticed those chunks of paste falling into the basin or on your clothes, if you are clumsy like me.) Dentists say that in anticipation of brushing our teeth, our mouths generate enough saliva, to ensure that the experience of brushing is not too dry for our liking. Together, this ensures that the quantity of paste used is just right and there is minimum wastage.

Don’t trust me? I have started doing it since few weeks. The paste lasts longer and is therefore more effective. Nothing gets wasted, I don’t act clumsy (atleast not in this circumstance) and the mouth doesn’t feel dry at all without the water. However small this may sound, I’m glad I learned the right way to brush, never mind that it’s happened at the age of 34.

Illustration by Mayur Tekchandaney

Music by design

Music by design

Music they say has healing powers. True that. It can lift your spirit. It can relax you. It can set your heart pumping faster. But could music influence you to buy wine from a particular country?

In a study of exactly that question, four French and four German wines, matched for price and dryness, were placed on the shelves of a supermarket in England. French and German music were played on alternate days from a deck on the top shelf of the display. And indeed, on days when the French music played, 77 percent of the wine purchased was French, while on the days of German music, 73 percent of the wine purchased was German. (Source: Subliminal by Leonard Mlodinow)

As people strolled down the aisle they looked at different wines, pondering on each label concerning the grapes each wine is made from, the wine’s vintage, cost, etc. They consciously weighed all that information, and in addition they’d probably considered what they’ll be eating with the wine. But what worked on their sub-conscious mind was the music. And a little nudge like music turned out to be key in influencing their decision of the origin of wine.

When asked whether the music influenced their choice, only one shopper in seven said that it had, while the truth was just the opposite. And that’s because we don’t realize the extent of influence our environment has in our decision- making.

The next time you visit McDonalds, notice the pace of music. Greater the crowd, faster the music. Faster the music, quicker the food consumption. Quicker the food consumption, quicker the tables turn free. I’m not sure if they play slow music when the restaurant is relatively empty. Though that could make people eat slower and sit longer, creating the perception that the restaurant has a good number of visitors and is therefore doing well.

Illustration by Mayur Tekchandaney

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