A while back toy stores had a big problem. Their sales soared through the roof in the lead up to Christmas, but in January and February sales plummeted as people restricted spending following the festive period. We have all been there, right? We go wild at Christmas and then play financial catch up until March. In order to overcome this issue the toy stores tried two things in January: they lowered prices and they intensified their marketing strategy. However, neither of these tactics really worked.
The aim of this blog is to tell you a toy story. A story about how toy stores did manage to overcome their sales problem with a technique that is both brilliant and infuriating.
I’m currently reading a book by Robert Cialdini. The book details the numerous psychological ways we can influence the behavior of other people. It is designed to provide everyday people with the information to spot when compliance profiteers, usually salespeople of some sort, are taking advantage of some very human traits.
Cialdini suggests that there are several automatic shortcuts that we take during the course of our everyday lives. Most of the time these shortcuts are helpful as they allow us to analyze the world quickly without having to dissect every situation. But sometimes these automatic shortcuts can lead us to make poor decisions. Let me give you an example. A week ago I bought my fiancée a bread maker for Christmas (I’m sure she won’t read this by tomorrow). I know absolutely nothing about bread makers other than their obvious function. One bread maker cost £35, another one cost £50 and the last one cost £110. Now the £110 bread maker was out of the question. I simply do not have that sort of money to spend on such a device. So I was left to choose between the £35 and the £50 versions. I chose the £50 one. Why? I assumed it must be better as it is more expensive. My shortcut: more expensive = better quality. That shortcut works pretty well in a lot of situations. But imagine you knew that human beings acted in this way, and imagine that you were a salesperson? Instead of dropping prices, you raise them. People will assume that the quality has to be good and you will get more money for your product!
It is an influence tactic like this that the toy stores used to increase their sales; namely, the consistency/commitment principle. Those in society who do not act in a way that is consistent with a commitment are frowned upon. An example: if I tell you that I will attend your party, and I do not turn up at your party, you will like me less! It’s for this reason that we tend to go to many social functions we have no interest in going to. Why do we act in this way? Possibly because we like coherence and we like to be able to predict behavior. So acting consistent with what we have previously said is a behavior that is generally reinforced. Take home message; if we make a commitment, then we like to keep it. But sometimes we keep commitments in an automatic fashion even when it is not in our best interest to do so, simply because we have made a commitment.
So back to the toy story. Every year there are a few toys that become the ‘big’ toys of the year. When I was a kid it was a Scalextric. Other notable Christmas fad toys include: the Cabbage Patch Doll, the Furbie, the Tamagochi and the PlayStation 3. Every year toy stores heavily market these toys because they know that in November, when a child sees it on TV, they are likely to ask their parents to buy it for them for Christmas. Many parents make the commitment: ‘Ok my beautiful child, I will buy you said gift’.
This is where the toy stores get sneaky. Despite being fully prepared for how many of these toys will need to be manufactured in order to satisfy demand, the toy stores, every year, run out of stock. Do you think that’s a co-incidence? It’s a parent’s nightmare. You have promised your kid this special toy. The toy store runs out. You’re up a creek without a paddle. We both know what you do. You over-compensate. You buy other expensive toys in the toy store so that when your child wakes up on Christmas morning they will not be utterly devastated.
So let’s say you get through Christmas relatively unscathed; your kid is satisfied enough with the second choice toys you bought for them. In January, guess what you will see? Commercials on TV advertising the original toy that your kid wanted. The one that was out of stock shortly before Christmas. Your child promptly reminds you that you promised to buy them that toy. Now you’re stuck between a rock and a hard place. Either you go to the store and buy the toy, which is a kick in the teeth after already having spent much money over the Christmas period. Or you do not buy the toy for your child and they grow up learning that its ok to not keep promises.
And all of this happened because toy stores ran out of stock, on purpose. This situation is built on research that indicates people tend to keep commitments. And it means that toy companies maintain sales in January and February without dropping their prices. Right now, as you read this, I wonder how many of you have promised your child a toy that has run out of stock. And I wonder how many of you will find yourself in a toy store come January!
Why did I tell you a toy story of this kind even though it has nothing to do with my research area? Primarily because it shows one way in which psychological research influences real world activity, and this is something I am interested in. Secondly, because next year, when your child asks for the next big thing, you might think twice before you make that commitment!
Happy Holidays everyone ; )