We’ve been getting a few emails about the recent CalTech study (gated here) that finds that consumers are willing to pay as much as 50 percent more for goods they can see and touch versus ones they can only look at with pictures or imagine with words. It’s an interesting study, but the Nudge blog is cautious about extrapolating too much from it. For example, it doesn’t warrant drawing clear implications about online vs. brick-and-mortar retailers, specifically why the latter can automatically charge higher prices.
For one, the study uses an auction process to determine consumers’ willingness to pay for a good. In other words, the value they put on them. That’s of course not how consumers buy products in the real world. The role of the price tag is a key variable that’s left unexplored. Why should anyone expect perceived value to be unaffected by price? The behavioral economic lesson is that consumers obtain a utility from the good and a separate utility from the transaction. This second form of utility is critical to a purchase decision, but is not part of these experiments.
An interesting side note that doesn’t seem problematic for interpreting this study is made by consumer behavior researcher Andrea Morales.
Shoppers do feel more connected with products after touching them, but usually dig deep into the sweater pile to avoid buying one that’s been touched by strangers.
“Even though they want to touch them, they really don’t want other people to touch them,” Morales said. “This is one application of disgust at work.”
It’s pretty easy to keep most of the inventory in the back.
The study’s authors do highlight one place where the findings have clearer implications. If you work at a restaurant, at the end of a meal always bring out a dessert cart.