Monday, November 25, 2013

Scope Out the Fix on Fate

One out of every three American adults trusts what is in horoscopes as accurate, note researchers at Johns Hopkins University and University of South Carolina.
     Estimates of the percentage of consumers who believe in fate reach 75%.
     Smart retailers should understand how these beliefs will influence purchasing behavior.
     A first step in doing this is to distinguish between those who believe their fate can be changed and those who believe it can’t. The researchers exposed people of both types to a prediction that the day ahead of them would be unpleasant. Each of the people was then offered the choice between a virtuous and an indulgent reward, such as a healthy snack or a sweet snack.
     Which type of consumer—the “can change fate” or “can’t change fate”—do you think was more likely to select the indulgent reward?
     The finding was that those choosing the indulgent reward were probably thinking that they’d make a bad day better. It was the “can change fate” group. However, the research also indicated this reasoning was subconscious. It was an emotional, not a reasoned, decision.
     Another difference among consumers regarding fate is in whether they think it operates cyclically or linearly. Researchers at New York University assigned study participants to allocate a $1,000 investment across a group of stocks, some of which had performed well in the past and the rest of which had not. Those who saw fate as linear placed more in the portfolio which had done well, figuring this would continue. But those perceiving fate as cyclical were more likely to choose the other stocks, figuring that a correction in the price was due. What goes down must go up.
     In what ways might you as a retailer detect these differences? You could notice significant events happening in your shoppers’ lives. During times of uncertainty, people tend more toward believing they can change their fate. They’re grasping for control. It could be economic uncertainty. It could be the consumer entering a new role, such as starting college, getting married or divorced for the first time, or moving to a new city.
     You also can influence the consumer’s fix on fate. For example, the NYU researchers were able to increase the portion of the $1,000 well-traveled participants allocated to poorly performing stocks by having the experimenter wear a highly visible yin-yang symbol. The yin-yang represents the inevitability of cyclical change.

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