Business Insights From Street-Vendors - Strategy With RS

How does this sound get generated?

These brands place layers of ‘butter / wax’ paper while wrapping the apparel, so that when you unwrap, it generates a crackling sound. The sound, subliminally, indicates that the apparel you are unwrapping is fresh, crisp & brand new!

Take my Dry-cleaner. Yesterday I collected my shirt. As I unwrapped to wear it, I was greeted with the familiar crackling sound emanating from the shirt. When I unwrapped it completely, I discovered the source of the sound - ‘used’ newspaper cleverly placed inside the shirt!

What feeling did the ‘crackling’ sound invoke in me - the dry cleaned shirt is crisp, clean & fresh!

How much did it cost my dry-cleaner? I guess marginally – he must have used ‘old’ newspaper!

From the dry cleaner, let me take you on a visit to my local market from where we purchase fruits & vegetables.

I observe the following behavioral sciences principles strategies pursed by the vendors to prevail upon us to buy there merchandise:

1. The Illusion of freshness: Vendors regularly sprinkle water on the fruits / vegetables to give an illusion of freshness. In addition, they keep the leaves & stems on the fruits / vegetables, till it is sold, to indicate that they have been freshly plucked from the farm & have just arrived! 
2. Mirror Neuron Effect: To create desirability in buyers, they cut a sample fruit & keep it at a prominent place so that passers-by can see it - what are they seeking to achieve? To wet the appetite of potential buyers!

This strategy is pursued by the world’s leading brands. Take Victoria Secret. It also uses the Mirror Neuron technique to get women to buy its intimate apparels. On the outer box, containing the intimate apparel, a picture of the most perfectly proportioned model, wearing the intimate apparel is printed. Why? When the potential lady buyer picks up the box with the picture of the model, Mirror Neuron effect takes over – she starts imagining herself to be the model on the pack & even starts feeling the smooth silkiness of fabric caressing her skin. Result – she ends up buying the apparel.

Let us take a stroll further down the street. We are likely to find street side vendors selling apparel – which they place in a heap & sell at throw away prices. The sellers invariably get 3 – 4 of there own people to surround them & engage in a conversation. Why? When others potential buyer are passing by & they notice a ‘crowd’ checking out the merchandise they intuitively feel that if so many people are ‘checking’ it out it should be good – after all so many people cannot be wrong!

Business lesson for us:

1. Intelligently, embed principles of Behavioral Science in your business model.

2. Please do not spend extravagantly to incorporate these principles.

3. Please do not use principle of Behavioral Sciences to manipulate your customers.

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In this series, Rajesh Srivastava, Business Strategist and Visiting Faculty at IIM Indore gives you a regular dose of strategy case studies to help you think and keep you one step ahead as a professional as compared to your peers. Rajesh is an alumnus of IIM Bangalore and IIT Kanpur and has over 2 decades of experience in the FMCG industry. All previous Strategy with RS posts can be found here