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Posts Tagged ‘Persuasion’

Anyone who has been to a trade fair, as those taking place usually on weekends in villages, small towns and some big cities, would know the kind of treasure goods one can find there: woodcraft decorative figurines (e.g., animals), dolls and puppets, handmade kitchenware, glassware (sculptures, vases etc.), knitting and embroidery articles, fashion accessories, and much more (including some local food products). A great part of the products sold in the fair are handicraft made by local and regional residents who present their creations to visitors. Often it is possible to find in such fairs also vintage items from years past (e.g., cameras, radio sets, coins). Now, consider shopping, or hunting, these kinds of treasures in an online marketplace.

Etsy offers an online marketplace similar in concept as described above: it is a special type of e-commerce website for handcrafted and vintage goods, where the sellers are small and independent entrepreneurs who interact directly and sell their merchandise to buyers in the virtual marketplace of Etsy, and then ship the sold goods to their destinations. So a buyer will not find there food products (e.g., homemade jams or local cheese) but he or she can find on Etsy.com a great variety of handmade and vintage goods beyond what is usually presented in any single physical fair (e.g., larger items of furniture that are more difficult to bring to a physical fair). It is not the same experience as strolling between counters in a physical fair, looking for ‘treasures’, but browsing handcrafted and vintage goods in an online marketplace like Etsy offers its own advantages and opportunities in  (almost) immediate access.

Etsy hosts 2.3 million active sellers (all must be registered members) and 47.2 million active buyers (membership is voluntary) as of the end of June 2019 (an increase of 17.7% and 19.3%, respectively, from same period last year). On Gross Merchandise Sales (GMS) of $2.1bn made in its marketplace in the first half of 2019, Etsy has generated a revenue of $350.4m (74% revenue from marketplace fees and 26% from seller services). While GMS increased by 20% from H1/2018, revenue increased by almost 40% (Etsy, Press Release, 1 August 2019). The company provides a platform for a community of sellers to trade their handcrafted creations or vintage goods worldwide. The ‘community’ is a cornerstone of its whole activity. Etsy also cherishes interactions between people (“connecting humans”) as the basis for commerce — its headline calling is to “Keep Commerce Human”. While the company is aiming to maintain the intimacy, reliability and convenience customers expect from a community, it wants to provide these benefits with the efficiency of a large corporation [Fortune: A; Etsy: About]. Making those ends meet seems like a non-negligible challenge.

Shopping for handmade products or vintage products has a special motif: it often gives consumers the feeling of treasure hunting. The pleasure in finding sought-for products as such only increases as they become less common in the world of modern (automated) production and marketing. The product item has to be useful, yet an emotional appeal can be further more important as a driver for buying the product.

Handicrafts are desired for being perceived authentic and genuine. People value the talent, skills and effort invested in their making. They like the human touch in both making the product and personally selling it to them by the person who made the product. Moreover, many of the handmade products are artisanal (e.g., woodwork, glasswork) and may exhibit an exceptional quality. Buying such a product is often considered a gesture of appreciation and a way of making a contribution to the creator.  Vintage products (especially from 1920s to 1960s) may hold a somewhat different attraction: They are associated with the past period of time they originate from (e.g., nostalgia, personal memories from childhood); different, possibly higher standards of quality; different ways of doing things (e.g., listening to music, cooking, taking photos); and vintage ‘treasures’ are also likely to be much less available in the market and even being rare. Vintage products may be handcrafted but that is neither a requirement nor their main source of value to the prospect buyers. (Note: Handcrafted artefacts may be made using just low-tech machinery and tools).

The pages on the website of Etsy appear spacious and bright. Items (text bodies, pictures) are placed over a white background, and the pages do not seem to be condensed and crowded with them. Some areas may be painted in pastel colours (e.g., as background for text on the homepage). This design endows the website with a soft and light feeling, and makes it easier for the eye to move around and observe product listings, pictures and other information on pages. There are very few product listings with images on the homepage, used for illustration rather than out-right promotion; a ribbon with images of products most recently viewed by the visitor appears on top of the homepage and on other pages, exercising relevance and convenience.

Six main categories are displayed in the top menu: Jewelry & Accessories; Clothing & Shoes; Home & Living; Wedding & Party; Toys & Entertainment; and Art & Collectibles. A drop-down menu with sub-categories can be ‘pulled’ from each of these main category items. However, on category pages the visitor also can see tiles for subcategories with sample images, and a sample of product listings in the category. Visitors can narrow down their search by using a key list on the left-hand side of the screen. For any category and sub-category, a visitor-shopper can choose to see all available products in that class or select to focus on either handmade or vintage products in that class (an additional item on the top menu labeled Vintage allows quick access for those interested only in vintage products).

Three basic information elements appear on each product page: a title describing the product, price, and a photo image. In addition, three more components are noteworthy: (1) Handmade products (e.g., a TV stand with cabinet, mid-century modern, made of oak wood) are accompanied by a description on materials and ways of their application, modes of use, design trend, dimensions, etc. For vintage products (e.g., antique Teddy Bear from the 1930s, Dutch Arthur van Gelden), the viewer may find a background story on the artefact, materials, history, any versions if available, etc. (2) Sellers offering their own handmade goods may provide options for personalisation (e.g., first name, a phrase, and photograph in picture frames and displays) and customization (e.g., type of wood, surface finish- colour and texture , size, and extra features for furniture). Furthermore, additional images may show the product from different angles and in different versions that can be customized to the preference of the prospect buyer. (3) The page is set to include reviews contributed by buyers regarding the product purchased and any aspects of their relationships of exchange with the seller.

The complementary information in words and pictures may fulfill an important role in persuading visitors who view a product page to complete a purchase order. Giving a visitor the flexibility to make adjustments (modest as they may be) to the product to better fit his or her needs and preferences can only strengthen the shopper’s conviction to buy. Victor Yocco (‘A List Apart’, 1 July 2014) well-explains in his article key implications of the central and peripheral routes to persuasion (in the Elaboration Likelihood Model [B]) for e-commerce websites. He stresses the importance of including cues that may be applied at different levels by visitors who browse pages, process and evaluate product offerings through a central route or peripheral route. In the case of Etsy, we may distinguish between visitors who get their impressions and make judgement based on the images and reviews, and perhaps use price also as a cue for quality (peripheral route), and those visitors who extensively and carefully consider the technical details and background of the product offered, and may also inspect the images provided in greater attention (central route).

Etsy enables prospect buyers to engage in conversation with sellers and make queries before a purchase, and it encourages such interactions (e.g., buyers tell in their reviews about satisfying enquiries they have had with sellers who were particularly helpful in their responses). Sellers can use a community forum to consult and discuss any matters that concern their activities from craftmanship to e-commerce. Furthermore, Etsy publishes workshops it offers to sellers in different disciplines of craftmanship, and a special section of the website is dedicated to craft supplies and tools, thus extending its hand to help entrepreneurs-sellers in their creative work. Shipping, however, is in the responsibility of the sellers, and trust between them and their buyers-customers can be particularly crucial at that stage of the exchange.

Some recent initiatives taken by Etsy could be a more delicate matter and a source of friction. For instance, the company started encouraging sellers in the US to offer free shipping in the country. It provides some guidance and assistance in shipping, but a question hangs as to how Etsy actually facilitates and makes it easier for American sellers to offer free shipping (e.g., does it give any ‘subsidy’ to the seller, or should the seller raise the product price, or absorb the extra cost alone?). Without practical support in shipping, the legitimacy of asking sellers to eliminate shipping costs is weak. Etsy has also taken action to improve the payment functionality. At first it was a matter of ensuring to buyers the confidentiality of their payment information. Next, however, sellers were required to use only the payment platform of Etsy. That has allowed Etsy to collect commissions that had previously gone to other payment providers. While this initiative helped in standardizing the checkout procedure and improved customer service, it also led to raising the commission rate sellers are charged from 3.5% of revenue per transaction to 5% [A]. A third initiative involves a new programme of advertising for sellers in co-operation with Google — sellers who join in an advertising plan can get their product offers promoted or prioritised inside the platform (e.g., in displays of product listings) and outside (i.e., in Google search results). This would create two classes of sellers that did not exist before.

Etsy under the leadership of its CEO Josh Silverman (since 2017) is set to put more emphasis on quality over price, reports Wahba in Fortune. At a time when online retail is primarily concerned with low prices and price promotions, it is suggested as remarkable that Etsy succeeded in cultivating loyalty. First, by its focus on handcrafted goods and small businesses, Etsy succeeded in making its marketplace feel like a community, but it still aims to deliver with greater business efficiency. Second, Etsy intends to give greater weight to higher-priced and better-quality products in search rankings (a change from how its search engine worked so far) with an aim to elevate the image of Etsy’s brand to an upscale status. Etsy also expects to encourage shoppers to level-up their purchases with complementary products (e.g., if one wishes to buy a lamp for a desk, consider also buying a desk). [A]

Etsy offers a special type of online commerce: bringing the richness, spirit and originality of a trade fair for handcrafted and vintage goods to consumers’ homes. It is not only the attraction of the goods, but also the experience of browsing collections and finding precious treasures, and the interaction with small businesses of independent entrepreneurs and creators (‘people more like us’ the shoppers might say). Etsy has seen success in improving its business performance since early 2018 and is ambitious to move ahead in strengthening its online marketplace. However, Etsy will have to take extra care not to lose the friendliness and comfort of its marketplace and community, for the pleasure of treasure hunting.

Ron Ventura, Ph.D. (Marketing)

 

Note:

[A] “Crafting a Comeback at Etsy”, Phil Wahba, Fortune (Europe Edition), August 2018 [Global 500], 180 (2), pp. 31-33

[B] “Central and Peripheral Routes to Advertising Effectiveness: The Moderating Role of Involvement”; Richard E. Petty, John T. Cacioppo, & David Schumann, 1983; Journal of Consumer Research, 10 (Sept.), pp. 135-146

 

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The World Health Organization (WHO) created a storm of confusion and panic when it published on 26 October (2015) its warning on cancer risks from processed meat as well as red meat. The warning arose as the outcome of a year-long effort by a committee of 22 experts, led by WHO’s International Agency for Research on Cancer (IARC), who reviewed and analysed findings from 800 studies carried out in past years across the globe. The warning itself, alarming enough, is not disputed; the problem concerned here is with the way the IARC made its warning announcement to the public.

Before referring to the content of the cancer warning, it should be emphasised that this research project did not bring any new data as evidence but analysed collectively results from previous studies at various research institutions (i.e., it was a meta-analyis type of research; originally published in the medical journal Lancent Oncology). Thus, warnings about the risks of cancer in consuming larger amounts of processed meat and red meat, and findings that support them, are not new. The IARC added an important authoritative backing with the intention that its voice will receive greater public attention and better succeed in persuading consumers to modify their behaviour. However, the announcement was not made cleverly, and without corrective measures may end in failure of the IARC’s initiative.

The warning of the IARC is actually composed of two warnings, at two different levels of risk. The IARC distinguished in its press release (no. 240) between two categories of risk to which it assigned processed meat and red meat as follows:

Category 1: “Carcinogenic to humans”. Processed meat is classified in this category together with asbestos, tobacco (smoking), alcohol and arsenic. It is causally linked to bowel cancer, particularly colorectal cancer — IARC states that the classification relies on sufficient evidence in humans that consumption of processed meat causes colorectal cancer (i.e., colon and rectal). Processed meat relates to meat products that have gone through processes of curing, salting, smoking and fermentation to improve their preservation. They include popular products like sausage, hot dog, bacon, ham, and salami.

Categroy 2A: ” Probably carcinogenic”. The classification of red meat in this category is based on limited evidence of its causal link to cancer in humans but strong mechanistic evidence of a carcinogenic effect. Red meat includes beef & veal, lamb & sheep, and pork (e.g., in fresh cuts or mixes).  It has been identified as a probable cause of colorectal cancer but also associated with pancreatic and prostate cancers.

  • Unexplained in the press release, a mechanistic effect relates to the effect of chemical substances or processes at the individual level (i.e., on a single organism). It is enough to suggest here that stating ‘strong mechanistic evidence’ is ambiguous to most people since they cannot understand the significance (even after definition).

There can be little wonder that the announcement of IARC alarmed and puzzled consumers, plausibly holding their heads in their hands and saying: “What should we do now about those meat products that we eat?” Because so many meat products or food items seem to be covered in those warnings, consumers are justified in feeling lost about the drastic reduction in menu that is looming, especially for the more carnivore ones, vis-à-vis a fear of cancer. The news media has tried to fill some of the void with the help of health, food and diet experts, but with little help directly from WHO, in answering questions such as what food made of meat can one continue to consume and how much. Some experts, nonetheless, contributed positive recommendations that go beyond meat consumption.

With regard to the level of risk, the IARC did indicate the estimate of its experts that eating daily 50 grams (1.8 ounce) more of processed meat increases the risk of contracting colorectal cancer by 18%. In a separate comment to Reuters, Dr. Kurt Strife of IARC clarified that the risk of developing colorectal (bowel) cancer in an individual from eating processed meat remains low but this risk increases when a greater amount of meat is consumed. The issue of quantity consumed is material as reflected also in recommendations from other sources. However, the IARC apparently did not see it as its responsibility to explain and recommend to the public how to act following its warning. In the official announcement to the press, Dr. Christopher Wild, director of IARC, called on governments and international regulatory agencies to “conduct risk assessments, in order to balance the risks and benefits of red meat and processed meat and to provide the best dietary recommendations”. The call on other agencies to act is commendable but the self-exemption by IARC is flawed.

The choice of IARC to couple its warning on processed meat as a cause of cancer with the warning on red meat as probable cause raises another problem. First, it produced an excessive warning with an overwhelming effect, asking the public to face a health limitation on a broad range of meat products at once. Consumers were likely to confront the joint-group heading “processed meat and red meat” before they could grasp the difference in level of risk; next they might assess more deeply the specific classes of meat and its products included. Second, adding at this time the warning on red meat could distract consumers from attending to and heeding the more serious cancer warning on processed meat, that is based on more conclusive evidence. It seems most acceptable from academic and clinical perspectives to publish the two warnings together, and it is understandable in regard to public health that the IARC would not want the risk associated with red meat to be neglected. Yet, when it comes to informing the public in the general media, the joint-warning could be superfluous and less effective in persuading consumers about the need to change their diet in view of cancer risks of either processed meat or red meat.

In advertising, brands are often cautioned that over-reaching product claims or promises might be received by consumers with disbelief and suspicion and thereafter be discarded. Conversely, excessive or too harsh warnings might induce disbelief and paralysing fear followed by resentment and rejection. On either side, messages that are perceived as excessive do not invoke trust in consumers, and in this case, not gaining their trust could be detrimental.

Another flaw in the press release that raised particular rage is the insinuated equivalence between eating processed meat and smoking tobacco. Associations in the meat industry attacked this equivalence and the research as a whole (e.g., UK, US, Canada, Australia), and government officials and other experts expressed their respective reservation in the media. It has been noted that there are grades in level of risk among causes of cancer in the first category, and that smoking remains the most dangerous single cause of cancer, much riskier than eating processed meat; excessive drinking of alcohol also bears a higher risk than the latter. But the mere listing of all those causes of cancer together, flatly as members in the same category, makes them equal and non-distinguishable to consumers. The IARC managed to grab attention alarmingly but probably not in the way they desired.

Different interpretations were suggested in the media, mostly in attempt to explain the meaning and implications of the warnings and to calm some of the public scare that was giving signs. Special attention was dedicated to differentiating between the cases of processed meat and red meat. The British Guardian told its readers that it was not advised to stop eating any processed meat or red meat. However, they clarified, consumption of processed meat should be cut considerably, particularly for those who are in habit of eating these food items daily (e.g., in breakfast). In addition, consumers are recommended to sanction their consumption of red meat, eating more moderately (“Processed Meats are Ranked Alongside Smoking as Cancer Causes – WHO”, The Guardian Online, 26 October 2015).

  • It is noted that in its press release the IARC stressed that their findings support previous recommendations to limit the intake of those types of meat, and in a later clarification to the media they iterated that IARC did not recommend to stop eating those meat products. In the press release Dr. Wild also acknowledges the nutritional value of red meat, confirming that there are benefits to consuming it.

The Guardian brings specific recommendations from the World Cancer Research Fund that people should not eat more than 500 grams of red meat (beef, sheep and pork) a week, and to reduce as much as possible their consumption of processed products (e.g., ham, bacon, salami). Dr. Elizabeth Lund, an independent consultant in nutrition and gastrointestinal health, offers yet a more balanced approach in face of IARC’s warnings with helpful practical recommendations to consumers: “A much bigger risk factor is obesity and lack of exercise. Overall, I feel that eating meat once a day combined with plenty of fruit, vegetables and cereal fibre, plus exercise and weight control, will allow for a low risk of colorectal cancer and a more balanced diet.” 

Beef products attract great attention in their defence. Advocates emphasise the importance of how beef items are prepared and the method of heating. The problem is argued to be mostly with products prepared and packaged in advance by mass food manufacturers, but that is only a partial factor in the generation of cancer risk. Beef is often recommended for its content of iron [as well as proteins and other nutritional components.] However, scientists suggested that iron may lead to release of nitrates that act as a carcinogenic agent. This process may happen during preparation, grilling or frying, but also during digestion. According to this assertion, the main cause for alarm is attributed not to the ingredients added to meat but to compounds created during the heating of meat (e.g., quick, high temperature) or digestion. Beef items like hamburgers and kebab prepared at home or in small private-business premises from fresh mixes could be safer, but it does not eliminate the risk completely. This issue appears as a sensitive subject of controversy and friction between large manufacturers, small butcher enterprises, and restaurants (competing among themselves) and health agencies and experts.

Raising fear in consumers can move them to take necessary action to reduce the risk (e.g., not driving after drinking alcohol) — research has provided support for a positive effect of fear inducement. Scaring people, such as by an excessive demonstration of a threat (e.g., car accidents) or its scope, may cause a paralysing effect but even that may not be the main problem. Goldstein, Martin and Cialdini suggest that a greater problem occurs when inducing fear without guiding people how they can reduce the danger. If the producer of the risk warning does not accompany it with recommendations for action in order to reduce it, a consumer is left with the fear with no way out. He or she is more likely in this situation to deal with the fear by “blocking-out” the message, dissociating oneself from the threat, and indeed be paralysed into taking no action (1). This is where IARC failed — they introduced the fear by itself. It was IARC’s responsibility as issuer of the warning to recommend actions to consumers like how to change their diet and taking other supportive measures.

Another viewpoint concerns the way consumers approach the risk and respond to it. Pennings, Wansink and Meulenberg propose decoupling the risk perception (i.e., how consumers assess the level of uncertainty) from the risk attitude (e.g., the extent to which consumers are risk-aversive) in anticipating consumer response to a risk (e.g., decreased food safety) and confronting it. What counts first is the chance a consumer perceives that he or she will be personally affected and then how to deal with it (e.g., stop or reduce consuming the risky food). Furthermore, the researchers suggest that segments which differ in their risk perception and attitude, and how they weigh them, should be distinguished; they may require each a different treatment (2).

The case here is different from the crisis case studied by Pennings et al. (‘mad cow disease’) because it did not arise due to an epidemic outbreak or a company’s malpractice (e.g., crisis of Remedia’s milk formulae for babies in Israel) — it is not a particular event but a more ongoing condition. Yet, at this point in time it is a crisis for consumers evoked by a new warning about a health threat. Health authorities and agencies will have to decide, for example, if the more appropriate strategy in any market or segment is to provide clearer information about the level of risk (reducing uncertainty) or tighten controls and supervision of food production of meat (i.e., because consumers do not tolerate cancer risk at almost any level of probability).

  • Special consideration may also be needed to persuade segments like young consumers in their 20s who do not care how their behaviour will impact their health thirty years away, partly because they simply cannot imagine what bad impact it could have — they are concentrated on enjoying their lives today; or consumers in lower socio-economic decile who eat those types of meat products (e.g., hamburgers, hot dogs) out of necessity, because these are cheaper food items for their meals.

The researchers and officials at IARC and WHO are clearly concerned about the possibility that consumers will become ill with cancer due to the amounts of processed meat and red meat that they eat, aiming at causing consumers to change their diet habits and reduce the threat and suffering. But they left a void by launching an incomplete persuasion effort — it was taken as over-threatening on one hand and lacking guidance on the other hand through practical recommendations to consumers how to act to improve their health prospects. In order to increase the chance that consumers will heed the risk and act as desired the IARC will be required to provide guidance and support to the public on its own and through collaboration with other agencies for a quicker response to consumer confusion and fear.

Ron Ventura, Ph.D. (Marketing)

Notes:

(1) Yes! 50 Secrets from the Science of Persuasion; Noah J. Goldstein, Steve J. Martin, & Robert B. Cialdini, 2013; Profile Books.

(2) A Note on Modeling a Consumer Reaction to a Crisis: The Case of the Mad Cow Disease; Joost M.E. Pennings, Brian Wansink, & Matthew T.G. Meulenberg, 2002; International Journal of Research in Marketing, 19, pp. 91-100.

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