One of the most well-known experiments in behavioral economy is captured in this hilarious video. Joshua Bell, a famous virtuoso performer, played his Stradivarius violin for 45 minutes in the metro of Washington DC, and has been largely ignored by the people walking by him. The same artist attracts massive crowds willing to pay a ticket averaging at approximately $ 100, whenever he performs in a concert hall, formally dressed-up and accompanied by an orchestra and its rituals!
This is one of several similar experiments documented in a fascinating way in the bestselling book by Ori and Rom Brafman, “Sway: The Irresistible Pull of Irrational Behavior”. The book belongs to a genre that gained considerable popularity lately and is classified as Behavioral Economy. Other praiseworthy samples in this field include Dan Ariely’s “Predictably Irrational” and Malcolm Gladwell’s “Blink”. In an effort to understand and predict consumer psychology and reactions, one can derive several useful principles from their research.
Psychologists appear to agree that one basic driver of human decision-making is Value Attribution, that is: ”the inclination to imbue a person or thing with certain qualities based on initial perceived value rather than objective data”. As an example, if we see an object labeled a certain way, we take this label at face value. The lesson that should be obvious from all this is simple: “Presentation matters”!
Marketing managers in retail should understand and utilize the Value Attribution principle whenever they are considering an investment in digital signage. Fluctuations in the economy have caused a drop of in-store impulse purchases and consumers tend to be a lot more mindful. Digital signage can help convince buyers and highlight the value of products that comes from their features, so sales do not have to rely solely on price!
Let’s see some practical implications of this goal on digital signage. “Content is king”, obviously! Enticing customers involves high quality, attractive content developed specifically for this medium. Retailers often run TV ads and think of it as a good idea to show the same commercials on their digital signage displays. Well, it’s not. Aside from the typical absence of an audio channel, consumers are not going to spend their time in a store looking at 60-90 sec commercials! Studies have shown that messages on digital signage displays are more effective when they last for a maximum of 7 seconds. At this high-speed rate new factors need to be considered, such as running clear messages and using appropriate transition effects.
There are lots of similar rules to be applied. When there is no prior experience with digital signage, it is best to work with a digital signage partner who understands these subtleties. Having a team of in-house graphics designers certainly helps, but it doesn’t necessarily deliver the capacity to create optimal content independently.
Value Attribution is also influenced by the “surprise factor”. Displays are now everywhere and running a steady loop of content on them is not going to capture the attention of your audience, unless you have some other advantage working for you, such as unusually large displays or truly inspired content. Adding interactivity on your displays and implementing mechanisms that render a “smart” digital signage environment can help you differentiate from competition and impress consumers!
Conditional playlists that change the content depending on audience composition, weather and any other parameter are such an example. Similarly, consumer tracking and personalized content projection through beacon technology may be a winning strategy to build and maintain a strong relationship with a customer.
Prices of digital signage hardware have dropped steadily over the past few years. This, presents an opportunity to create a digital signage infrastructure with a very moderate investment. But it is only through focusing on the goals we are trying to achieve, such as Value Attribution, that can deliver a solid return on this investment, however large or small!