The Brainy Business | Understanding the Psychology of Why People Buy | Behavioral Economics

353. Data-Driven Personalization for Online Retail - Jo Evershed and Gareth Harvey

Dec 29, 2023

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In this episode of The Brainy Business podcast, you'll hear an insightful conversation between host Melina Palmer and guests Jo Evershed and Gareth Harvey. Jo and Gareth discuss the power of behavioral data in personalizing shopping experiences and nudging consumers towards more desirable choices. The conversation also delves into the impact of default options and the potential for personalization in branding. Overall, this episode highlights the potential of data-driven personalization in improving shopping experiences and pricing strategies. Whether you're an online retailer or marketer, this episode provides valuable insights on how to engage customers and increase conversions through personalized nudges.

In this episode, you will:

Maximize your online sales with behavioral data insights.
Boost customer engagement with personalized nudges and recommendations.
Increase conversions by leveraging data-driven decision-making in pricing strategies.
Improve the shopping experience by understanding consumer behavior in supermarkets.
Optimize your online grocery store for success with insights into online shopping trends.
Discover the impact of book jacket colors on consumer purchasing decisions.
Uncover the secrets to driving sales through data-driven pricing experiments.

Show Notes:

00:00:00 - Introduction, Melina introduces the guests, Jo Evershed and Gareth Harvey, and discusses their work in behavioral science and consumer psychology. 00:04:34 - Gorilla Experiment Builder and Consumer Psychology Jo explains the purpose of Gorilla Experiment Builder, a platform for running behavioral research online. Gareth discusses his background in consumer psychology and how he applies academic research in the commercial sector. 00:07:07 - Applying Behavioral Insights in Grocery Stores Gareth shares his experience in designing supermarket layouts and how psychological principles can be applied to improve marketing strategies. He discusses the importance of finding the right stimuli and placement to influence consumer behavior. 00:09:40 - The Impact of Smell in Retail Gareth explains the effectiveness of using scents like chocolate in retail environments. He highlights the importance of placing the scent in the right location to maximize its impact on consumer behavior. 00:11:48 - The Truth About Pricing Melina mentions her upcoming book, The Truth About Pricing, and discusses an experiment she conducted with Jo and Gareth for the book. The experiment involved testing different pricing strategies during the COVID-19 pandemic. 00:14:21 - The Psychology of Supermarket Aisles The group discusses the importance of positioning items in supermarket aisles to encourage impulse buys and prolong shopping trips. They explain the strategy of making customers far enough in the aisle to see the next one and entice them to continue walking and making more purchases. 00:15:40 - Changes in Supermarket Design The group mentions how supermarkets are adapting their store layouts to cater to different types of shoppers, such as grab-and-go shoppers and those doing big stock-up shops. They discuss the need to avoid antagonizing shoppers and the potential for redesigning stores to meet changing shopping habits. 00:16:39 - Online Shopping and Impulse Buys The group explains how supermarket apps can still encourage impulse purchases and replicate the in-store experience. They mention the use of personalized advertisements and offers based on past purchases. Additionally, they discuss the importance of optimizing product images and descriptions for online shoppers. 00:18:20 - Nudging Towards Healthier Choices The group introduces the concept of "swaps" in online supermarkets, where healthier alternatives are offered as substitutes for less nutritious products. They discuss the potential for making small nudges towards healthier options and the role of personalized recommendations in influencing consumer choices. 00:20:12 - Challenges in Online Product Display The group highlights the challenges of displaying products effectively in online supermarkets. They explain how industry guidelines and mobile optimization constraints limit the amount of information and advertising that can be displayed. 00:27:42 - The Difficulty of Finding Gluten-Free Options Melina discusses the challenges of finding gluten-free options due to having celiac disease. They mention how it would be helpful if stores and online supermarkets could offer personalized recommendations based on dietary restrictions. 00:29:20 - Opting Out of Irrelevant Advertisements The group suggests that online supermarkets should have an option for users to opt out of seeing certain products, such as gluten-containing items. This would save time for both the consumer and the store, and provide valuable data for the store to make better recommendations. 00:30:05 - Data Privacy and Opt-In Options The group acknowledges the need for careful handling of shopper data and the importance of opt-in options. They discuss how consumers may feel nervous about having their data collected but might be more willing if they have control over what data is used and how it benefits them. 00:31:46 - Nudging Consumers Towards Healthier Choices The group discusses an example of a study where labels on Coca Cola products were used to nudge consumers towards healthier options. They highlight the potential for supermarkets to use data to help shoppers make better choices and become the best version of themselves. 00:35:11 - Default Options and Personalized Recommendations The conversation explores the idea of default options and personalized recommendations within online supermarkets. By offering healthier alternatives and giving shoppers the ability to customize their default options, retailers can support customers in making better choices. 00:41:22 - Setting up the Experiment Melina and her team created an online shop to test different book covers and their impact on sales. They ran a four-way between-subject experiment, including a control condition without Melina's books. They gathered data from participants, including Melina's audience and small business owners recruited through Prolific. 00:43:26 - Behavioral Decision Making Gareth explains that visual saliency is crucial in decision making, both in physical stores and online. People tend to go with what catches their attention immediately. Online shoppers spend only a few seconds reviewing multiple products. The study aimed to understand how people's decisions differ when seeing a book cover on a shelf versus in isolation. 00:44:37 - Challenges and Solutions The initial data showed a strong preference for the red book cover, but Melina and her team suspected it was due to the small sample size. To overcome this, they collaborated with Prolific to collect data from a larger and more diverse group. The final results revealed that the green book cover performed the best, aligning with both the behavioral and focus group data. 00:48:00 - Importance of Data and Uncertainty Melina values running experiments to gather data and validate her assumptions. Despite feeling uncertain about the outcomes, she is willing to follow what the data suggests. The study helped her understand that the green book cover performed well within her audience, but not necessarily among those interested in pricing books for businesses. 00:55:37 - Importance of Openness and Learning Being open to different outcomes and learning from the results is crucial. The Amazon description and keywords play a significant role, and testing and optimizing them is essential. Feedback and participation from hundreds of people have been valuable. 00:57:17 - Conclusion, Melina's top insights from the conversation. What stuck with you while listening to the episode? What are you going to try? Come share it with Melina on social media -- you'll find her as @thebrainybiz everywhere and as Melina Palmer on LinkedIn.

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I hope you love everything recommended via The Brainy Business! Everything was independently reviewed and selected by me, Melina Palmer. So you know, as an Amazon Associate I earn from qualifying purchases. That means if you decide to shop from the links on this page (via Amazon or others), The Brainy Business may collect a share of sales or other compensation.

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