Judgement Error

This summer the debate once again raged in Denmark on what, if any, responsibility retail business has with regards to the increasingly unhealthy dietary habits of consumers. Like in other countries, a main area of public disagreement has been whether we as consumers act autonomous and hence are responsible for our decisions, or whether contextual factors nudge our choices to the extent that they may be said to be outside our control. As behavioural scientists we look with some bafflement on the public discussion, as the evidence is clear that supermarkets are nudging us. To set the record straight we provide a brief introduction to some of the most common evidence-based ways supermarkets seek to affect consumers in ways intended to increase profits, but in turn often negatively impact our dietary health. We also offer our view on their responsibility given this evidence.

1 Space Management

Few people still believe that the general set-up of supermarkets is coincidental or even arranged for the convenience of consumers. After all, the most common goods, such as milk, is placed in the far back end of the store, forcing you to pass sampling stands with tempting options to sway you into additional consumption. This is, perhaps, the most basic case of space management, which became increasingly adopted by supermarkets during the 1980’s – a technique of working with in-store shelf- and product-placement to significantly increase sales [1][2]. Indeed there are dedicated products with the specific aim of maximizing profits via retail space management.

Another evidence based space management technique is that of placing goods at easy reach eye-height locations which is proven to sell significantly more than comparable goods placed elsewhere [3]. This is well illustrated by an American study that did exactly this. By changing, amongst other, the ‘choice architecture’ of a supermarket (i.e. placing healthy options at easy to reach eye height locations) the researchers decreased the sale of unhealthy beverages by 25 pct. and increased the sale of healthy beverages by 13,2 pct. [4].

Likewise placing goods that are commonly associated with each other is another commonly used trick to encourage added consumption [5][6]. For example if you are looking to buy a soft drink you will often find chips and dip nearby.

Another use of space management is to place candy and other high-energy items near the checkout to nudge you, or perhaps the tired child you are dragging along [4]. In England, for example, a recent study concluded that 90 pct. of all checkout goods were unhealthy foodstuffs, with the healthiest option on display being sugar free gum [8]. More problematically the retail industry also differs its space management according to the socio-economic status of the area in which the store is located. For example stores located in disadvantaged neighbourhoods expose their customers to significantly more high-energy snacks [9].

Utilizing space management to nudge behaviour significantly impacts our decisions, as it offers us a heuristic “short cut” for arriving at a decision. These nudges – easy to reach, commonly associated goods – simplify our decision-making processes; but you may end up having bought a coke, a bag of chips and dip, and a chocolate bar at the checkout when all you were planning on buying was milk.

2 Normative Size Statements

Another kind of nudge utilized by supermarkets as well as restaurants and cafés is exemplified by the use of normative size statements. The basis of this is that we often use normative size statements like “small”, “medium” and “large” as objective anchors on which we base our decisions [10]. Hence by labelling a certain product as “small” or “large” supermarkets (and others) often influence whether or not you buy that size or amount of a given product; especially when there are different size options available. For instance, you are more inclined to go for an unhealthy product labelled small, even if it objectively speaking is not. Normative size statements may in fact be combined with a kind of micro-space-management by arranging orders of appearance so as influence consumer choices through what is called the compromise effect because consumers have a tendency to choose the medium by a compromise heuristic. Thus by adding a smaller or a larger item to the product line consumers may be nudged to choose a bigger or a smaller item in that line.

 

 

3 Sensory Cues

Yet another kind of nudge that supermarkets exploit is based on sensory cues to trigger heuristic shortcuts when faced by complex decisions. An example of this is an experiment exposing consumers to music associated with a given nation [11]. In this experiment four French wines and four German wines were put on display. When stereotypical French music was played the French wines outperformed the German ones by factor of 3:1, while when stereotypical German music was played German wines conversely outsold French ones by a factor of 2:1.

Still, despite this evidence, when asked after their purchase only 1 out of 44 customers identified their reason for opting for their choice of wine as being impacted by the music played!

Hence, sensory cues as simple as music can activate subtle shortcuts for deciding upon the myriad of wine options that exists at a given supermarket. Music also impacts the amount of time we spend in a given store with slower-paced familiar music resulting in individuals staying longer in the store [12].

And this is just an illustration of the general evidence-based conclusion: visibility, lighting, colour, variety, portion size, height, shape, number and volume of a given product can be used to significantly nudge our consumptive behaviour [13]. Even something as simple as the given name of produce affects consumptive behaviour. In an experiment, set in a buffet setting, children were 25 pct. more likely to purchase a corn side dish if it was called “creamy corn” rather than just “corn” [14]. Likewise, for adults the descriptive name given to a meal has been shown to affect our perceptions of that same food, as long as it is of a reasonable quality [15].

4 Anchoring

As a final introductory example of how supermarkets often prioritise increased profits over the health of their consumers, is by using bundle-deals and providing pre-sale prizes, i.e. “before €x, now €y”, two for one deals” or “buy two get one free”. The “buy two get one free” deal technique e.g. has been shown to increase the amount purchased by consumers by between 30 – 105 pct. as compared to what they originally intended. Here the anchor, “buy two get one free” deal, makes opting for one rather than two much less appealing – basically why buy only one; if for just one more purchase, I get a third for free [16].

The Power and limits of self-control

All of these factors demonstrably impact our decisions when shopping. But does that mean that we are mere slaves to outside influences?

No, of course not, but it does imply that we can at various times be influenced by contextual factors and hence act differently than what we would have preferred to do when thinking twice. However, you can overcome the power of certain consumption nudges – like bundle-offers, if you merely register the amount (the number) of a given product that you need [16]. Still, even if you prepare a shopping list you may face other difficulties in the supermarket.

Studies in behavioural science increasingly converge on the conclusion that our ability to exercise self-control is a finite reserve [17]. That is, the more you exercise it through-out the day the less you will be able to rely on it later on – even in completely unrelated tasks. This is called ego depletion and implies that the more self-control or willpower we have applied during the day the more prone we are to impulsive decisions [18]. From a consumer perspective this will make you more susceptible to outside influences if you have had stressful day or week. Of course, supermarkets also try to add to ego depletion by keeping you in the store as long as possible and by exposing you to a wealth of tempting offers.[1]

Getting the premises settled
Returning to the discussion that has been raging in Denmark; what, if any, responsibility the retail businesses have with regards to the increasingly unhealthy dietary habits of many Danes? Well, first we need to set the premises straight.

First, the idea – as held by one side in the debate – that supermarkets do not impact our shopping behaviour is simply incorrect [19]. As shown above they do this to varying degrees and in many different ways.

Second, the idea that we can act truly autonomous, i.e. completely independently of contextual factors – when deciding upon on what to buy at the supermarket or anywhere else for that matter [20] – should be regarded – as contrary to voices in the debate – as somewhat of an abstract idea, which in turn does not necessary amount to the same thing as an ideal. We are not hyper-rational agents. If we where, we would not be able to cope with even simple familiar choices if not allowed to use some heuristics. This is why even micro-economic theory of choice e.g. has to assume a random tie-breaking rule (think: coin toss) amongst its most fundamental assumptions. Otherwise agents facing indifference between equally preferred choice options such as choosing between identical packages of one and the same brand would never arrive at a choice. The same go for other basic background assumptions of micro-economic theory such as when it requires agents to be able to make non-trivial conceptualizations of their decision problems – conceptualizations that presupposes the use of heuristics or incredibly deep rational reasoning procedures [21]. In conclusion, we are inadvertently impacted by contextual factors and heuristics that sometimes lead us astray; that’s life, and without them there’s is no such thing as decision making.

Third, this does not mean that these outside influences (nudges) have to be aimed at profit alone. They could also be aimed at increasing the sales of healthy alternatives. A recent Danish experiment (in Danish only unfortunately) is the latest in a long line of experiments that have showed that by altering the set-up of supermarkets to favour healthier products you can significantly increase the sale of these products. In addition traffic light labelling of food (red (unhealthy), yellow (less healthy), green (healthy)) has been shown to be able to significantly increase health awareness amongst consumers and increase the number of healthier purchases [22], although there are many qualifications to be made with regard to how, why and when this strategy works [23]. On-going research at Harvard Medical School in addition illustrates how sensory cues and choice architecture could be used to significantly alleviate unhealthy consumption in socially deprived areas, which will be the first attempt to strategically address the issue of social inequality in unhealthy eating using behaviour psychology instead of only the usual knowledge-raising campaigning that has shown to be insufficient viewed in isolation.

Still, despite these three facts, in Denmark the debate about health has remained on the traditional path. Most scientists disregard the proposals to employ these psychology based tools to improve healthy consumptions and demand instead additional taxation on unhealthy food and beverages (or bans); liberal politicians cry nanny-state while claiming ideal autonomy on behalf of consumers; and supermarkets lay low pointing to their shareholders and demands for profit. Finally, ordinary citizens publicly deny that cheap tricks like these would work on them and their consumption (although they might work on their neighbour).

The responsibility of retail businesses and the search for business-cases for nudging upstream
However, just as nudges today work to increase consumer consumption, so they can be leveraged to increase healthier consumption tomorrow. The real question then is not whether they work, but whether viable business-cases can be made for promoting healthy consumption.

However, to pursue this path towards healthy living we have to go beyond the current trenches. Consumers and politicians have to accept that the evidence that we are swayed in our decision making by contextual factors activating heuristics and producing biases in behaviour.

Retail businesses have to recognize that while they do not have responsibilities beyond profit, neither do they have any basic rights to be protected against fair regulation. However, citizens do have basic rights – and one of these is the right to use fair regulation to shape society to promote their health, wealth and happiness. Thus, the only way business can protect themselves from further regulation is by finding new ways of promoting health.

Still, to accommodate the fact that retail business is in the business of doing business, not public health, scientists have to accept that the interventions and implementations pursued should always be based on sound and realistic business-cases. Too often scientists just ask for the A-spaces in retail, because these are known to increase sales. When denied these, they call for regulation. But here scientists should recognize and inquire further into the fact that there seems to be a difference between nudging upstream and downstream, i.e. healthy goods and unhealthy goods. If citizens are provided the right information and reasons to act, then heuristics relying on responsibilities and long term preferences may be leveraged in complex but quite concrete ways and places that unhealthy products might not be able to compete with. And this, to our opinion, is where the ends of the various stakeholders meet: in pursuing ways of nudging health based on viable business-cases against a background of fair regulation intended to protect the health, wealth, happiness and freedom of citizens.

 

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