There is no such thing as a neutral design. — Cass Sunstein and Richard Thaler
Last week’s book, Thinking Fast and Slow, is a critical foundation for understanding how we think. Biases, heuristics, Systems 1 and 2 … these are vital concepts and frameworks. It was a lot of work, and a lot of fun, to introduce these beautiful ideas to the uninitiated. Of course, many have already read the book and I’m sure the refresher was still worthwhile.
Throughout the coverage, I felt a strong need to showcase as many real-world examples as I could. The ideas in Kahneman’s masterwork aren’t easy to absorb without demonstration. I did my best; I hope it helped. All the same, something was missing and, for that, I decided this week’s book could seal any gaps. Consider this the two-part initial foray into behavioral economics.
The most applied elements from Thinking Fast and Slow are best understood from a book that actually came three years prior. Written by another Nobel Prize winner, Richard Thaler, and Harvard Law professor Cass Sunstein, the book is Nudge and it offers a fantastic view into what we can do with this amazing knowledge. Again, this book technically precedes Kahneman but it is actually best read after Kahneman.
Particularly for the concept of choice architecture.
As a concept, this is probably the central theme of Nudge and it points to the ways in which the deliberate design of choices drives us towards specific behaviors. Not by force; it’s nothing overt. But it’s nearly as effective and certainly more palatable. Our authors focus the concept as a way to “nudge” people towards personally and socially desirable behaviors. However, the idea is everywhere, from traditional architecture (i.e. buildings) to software to the gym. And it’s not always employed in the most altruistic way. My personal favorite is the modern grocery store.
The Spider’s Parlor
“Will you walk into my parlour, said a Spider to a Fly;
‘Tis the prettiest little parlous that ever you did spy.”
I’ve never really associated profit-seeking with a grocery store. It doesn’t seem like the right playground for your run-of-the-mill industrialist. It’s such a communal thing, a place where everyone goes for their food, sees their neighbors, plies their weekly routine. All the same, the grocer is not designed by mistake. Nor is it designed for your health above all. It is a business, with all the commensurate challenges, and it addresses those challenges by doing things a certain way to provide you value (i.e., divest you of your money).
It starts the minute you walk in with the humble shopping cart. Just as surely as dinner plates have gotten bigger, so have shopping carts. No one seems to be exactly sure why carts have grown so much (3x the size of the 1938 original) but it appears to contribute to more spending in the store, as much as 40% more. The grocer is more than happy to see that trend continue.
After you grab your oversized grocery cart, you enter the store by walking past all manner of sale items that are stacked on pallets. This is the initial advertisement blast, the first of thousands you’ll absorb on your single visit. The grocer doesn’t expect you to grab these items the minute you walk in. If anything, the initial visual plants the seed, an initial impression of the item and its price, so that you’ll be interested when you see it again on the other side of the store as you make your way to the checkout line.
The far ends of the stores have the fresh, regular items like produce, dairy, meat, and bread. We understand this. Placing perishable items at the far ends require you to walk past more deals, more endcap displays. Meanwhile, the “boring” and irregular stuff is in the middle of the store, packed in the least-visible section and often with a higher markup.
Out on these edges, a lot of fascinating things occur. Most stores have two entrances and so the first entrance aligns with produce, the second entrance with deli counters, prepared goods, and—a recent addition—coffee shops. I always seem to go through the entrance with the produce. I don’t know why. But both carry tremendous sensory “nudges”.
For example, the produce section is the prime example of what’s known as “vignetting”. This is where an unhealthy item is placed next to healthy items to drive an impulse purchase. So you’ll see a stand of apples and caramels sold together. No one walks into the produce section to buy caramel. I don’t know anyone who buys caramel at all. Unless it’s next to apples.
From a “nudge” perspective, this is how we help people feel comfortable about an indulgence. The same power can be applied in a more positive way.
Consider the broader context of the produce section. When you first walk in, the produce section is there to largely entice you to buy healthy foods, right? That may be true but researchers claim that the more important effect is that the produce section makes you feel healthier. Feeling healthier encourages more curiosity, more purchases of all kinds.
Then we have the samples. All those lovely samples. The vast majority of these samples are from packaged, preprocessed goods. Why? Because you’re more likely to purchase a packaged item if you’ve had a taste. Non-packaged items, like our aforementioned apples, are well-known and thus don’t benefit from the effect nearly as much. Unfortunately, this sampling of processed goods leads to more purchases of processed food.
All the same, the sample tactic has the same effect as freemium software services and, well, the infamous (apocryphal?) drug dealer tactic of offering the “first taste” for free.
A Nudge In The Right Direction
I could write endlessly on the many ways these and other tactics are used in the grocery store to entice customers. There are few things that fascinate me more. In every instance, I’m reminded of our leading quote for today’s article, drawn from the book:
There is no such thing as neutral design.
So now that we’re armed with the knowledge of System 1 and System 2 thinking, as well as the understanding of a broad variety of biases and heuristics, this week’s book will round out our initial foray into behavioral economics. We’ll learn how choice architecture can help us and others level up. Our authors are right; there is no neutral design. To push it towards a positive end, as they strive, is a noble goal worth striving for.