Jaewoo teaches and writes about design thinking, behavioral economics, and field experiment for customer experience. He is professor of marketing and participating professor of experience design at Kookmin University. Jaewoo has been Visiting Scholar at Stanford University since September 2024.
My presentation focused on an ongoing collaborative research project with Nayoung Yoon at Aalto University and Wonseok Choi at Project Rent. Nayoung contributes perspectives of brand managers and consumers and Wonseok provides practical knowledge gained from launching over 200 pop-up stores throughout Seoul.
The lecture began with three landmark cases including Simmons Grocery Store. Following this, I presented four recent pop-up stores operated by Project Rent, each carefully designed around unique goals. Among them was the Ghana Chocolate House, an innovative pop-up store reshaping brand perception.
The audience paid attention to not only cases but also numbers. To illustrate this, I shared preliminary findings from data we collected during July 2020, at the height of the COVID-19 pandemic in Seoul. The graph shows daily visitor counts for two pop-up stores, a ham and beer pop-up (solid line) and a fashion pop-up (dotted line), alongside daily COVID-19 case numbers (green line). During pandemic restrictions, the food and beverage pop-up consistently attracted more visitors than the fashion pop-up when operating. These findings, highlighting the appeal of experiential consumption, were presented by Nayoung in 2024.
We plan to deepen our analysis and provide further insights into how brands can leverage pop-up stores.
By taking empirics-first research approach, we study the effect of product type and COVID-19 restrictions on pop-up store visits. This quasi-experimental study uses store traffic and store-entry ratios of four pop-up stores displaying different product types (i.e., experience goods or search goods) at varying times (before or after the COVID-19 restrictions). Our research shows that pop-up store visits were higher when a store displayed experience goods than search goods before the COVID-19 restrictions. However, the store visits to experience goods pop-up stores plummeted after the imposition of restrictions, higher than search goods, suggesting the restrictions’ stronger detrimental effect on experience goods. Our findings advance research on consumer behavior relating to pop-up store products and the impact of mobility restrictions on store visits.
At the recent O’Malley School of Business (OMSB) Seminar at Manhattan University, I shared our research on minimalist design. This collaborative work with Yooncheol Shin, then a graduate student at the Techno Design Graduate School at Kookmin University and now a UX researcher at the Customer Experience Center at Woori Bank, explores when simplicity enhances consumer preference, and when it backfires.
We conducted one lab experiment and one field experiment to test a key idea: not all design elements contribute equally to how consumers form their preferences.
We found that removing LESS diagnostic design elements (e.g., buttons for play, forward, or backward songs) from an MP3 player increased participants’ preference. However, removing HIGHLY diagnostic design elements (e.g., buttons for equalizer, foreign song translation, or T-base) did not produce the same effect.
Our findings challenge the widely accepted “less is more” mantra. By connecting design practice and marketing theory, we offer practical insights for UX designers and brand managers who want to simplify without losing impact.
Advertising needs to capture consumers’ attention in likable ways, and the visual complexity of advertising plays a central role in this regard. Yet ideas about visual complexity effects conflict, and objective measures of complexity are rare. The authors distinguish two types of visual complexity, differentiate them from the difficulty of comprehending advertising, and propose objective measures for each. Advertisements are visually complex when they contain dense perceptual features (“feature complexity”) and/or when they have an elaborate creative design (“design complexity”). An analysis of 249 advertisements that were tested with eye-tracking shows that, as the authors hypothesize, feature complexity hurts attention to the brand and attitude toward the ad, whereas design complexity helps attention to both the pictorial and the advertisement as a whole, its comprehensibility, and attitude toward the ad. This is important because design complexity is under direct control of the advertiser. The proposed measures can be readily adopted to assess the visual complexity of advertising, and the findings can be used to improve the stopping power of advertisements.
In our newly published paper in Visual Communication, Renato Bertao, MyeongHeum Yeoun, and I explored how well AI powered logo makers actually perform. We tested several popular tools and asked design experts to evaluate the results. Many of the logos they produced lacked essential design principles such as proportion, balance, and unity. AI can generate logos quickly, but when it comes to well crafted design, it still falls short.
Artificial intelligence is already embedded in several digital tools used across design disciplines. Although it offers advantages in automating and facilitating design tasks, this technology has constraints to empowering practitioners. AI systems steadily incorporate machine learning to deliver meaningful designs but fail in critical dimensions such as creativity. Moreover, the intensive use of AI features to provide a design solution – so-called AI design – challenges the boundaries of the design field and designers’ roles. AI-powered logo makers exemplify a horizon where non-designers can access design tools to create a personal or business visual identity. However, in the current context, these online businesses are limited to randomize layout solutions lacking the visual properties a logo requires. This article reports mixed-method research focusing on AI-powered logo makers’ processes and outcomes. We investigated their capability to deliver consistent logo designs and to what extent their algorithms address logo design principles. Initially, our study identified representative visual principles in logo design-related literature. After probing AI-powered logo makers’ features that enable logo creation, we conducted an exploratory experiment to obtain solutions. Finally, we invited logo design experts to evaluate whether three visual principles (proportion, balance and unity) were incorporated into the layouts. The assessment’s results suggest that these AI design tools must calibrate the algorithms to provide solutions that meet expected logo design standards. Even focusing on a particular AI tool and a few visual principles, our research contributes to initial directions for developing algorithms that embody the complex aspects of visual design syntax.
Keywords
AI-powered logo maker, logo design, visual design principles, AI design, artificial intelligence
Tipping used to be an open-ended question. We decided the percentage and calculated the amount ourselves. Today, it has become a multipe-choice question. Pre-set options along with exact amounts are displayed on receipts or screens. This shift has changed how we feel about the act of tipping.
At Kabuto in Long Beach, the receipt offers three tipping options: 20%, 15%, or 10%, arranged from highest to lowest. It gave me a sense of flexibility, but the order and limited range pushed me toward choosing within a set range.
Lori’s Diner in San Francisco took a more assertive approach. The receipt included checkboxes for 18%, 20%, or 25%, and showed the final total for each selection. This removed the burden to calcuate, but made it harder to say no.
At Eel River Café at Garberville, the screen displayed four tipping buttons for 15%, 20%, 25%, and even 30%. Each amount was pre-calculated and shown clearly, creating a sense of obligation.
What once felt like a personal gesture of appreciation now feels more like a social obligation. As tip percentages rise and digital prompts become aggressive, the tipping experience shifts from a sincere expression of thanks to a manufactured sense of guilt.
The paper presents a model of the evolution of social norms. When a norm is costly to follow and people do not derive benefits from following it other than avoiding social disapproval, the norm erodes over time. Tip percentages, however, increased over the years, suggesting that people derive benefits from tipping including impressing others and improving their self-image as being generous and kind. The implications to the norm of not cooperating with new workers who accept lower wages are discussed; the model suggests that incumbent workers have reasons to follow this norm in addition to avoiding social disapproval.
Inglenook winery, owned by filmmaker Francis Ford Coppola, is famous for its fine wines and cinematic heritage. Its castle-like architecture is also impressive. However, beyond these attractions, Inglenook’s wine displays are unique.
Rather than presenting bottles in isolation, Inglenook pairs them with lifestyle products such as artisan candles, gourmet pasta, sketchbooks, and sun hats.
These combinations are not decorative. They suggest how wine is consumed and experienced in real life: during intimate dinners, relaxing moments, creative reflection, or outdoor leisure. The display turns wine into a lifestyle choice.
Likewise, Tsutaya bookstore pairs books with music, stationery, and home goods, helping visitors envision these products as part of their lifestyle.
At both the Napa winery and the Tokyo bookstore, lifestyle-oriented displays enable consumers to see how the products integrate into their daily lives, thereby increasing their perceived value.
Bundling is pervasive in today’s markets. However, the bundling literature contains inconsistencies in the use of terms and ambiguity about basic principles underlying the phenomenon. The literature also lacks an encompassing classification of the various strategies, clear rules to evaluate the legality of each strategy, and a unifying framework to indicate when each is optimal. Based on a review of the marketing, economics, and law literature, this article develops a new synthesis of the field of bundling, which provides three important benefits. First, the article clearly and consistently defines bundling terms and identifies two key dimensions that enable a comprehensive classification of bundling strategies. Second, it formulates clear rules for evaluating the legality of each of these strategies. Third, it proposes a framework of 12 propositions that suggest which bundling strategy is optimal in various contexts. The synthesis provides managers with a framework with which to understand and choose bundling strategies. It also provides researchers with promising avenues for further research.
While filling up my car at a California gas station, I often noticed three red stickers on the pumps. Initially, I thought the pumps were new. However, I soon learned that these red tapes are security stickers designed to prevent card skimming scams.
Card skimming occurs when criminals place fake card readers over the real ones to steal credit card information. If someone tries to tamper with the machine, the seal breaks.
I have been instinctively looking for these red stickers at the gas station. Interestingly, I actually feel relieved when they are not there because it means the machine has not been tampered with.
This simple visual cue further changes how I behave. Now I prefer to tap my credit card instead of inserting it.
Researchers once said consumers might hesitate to use contactless payment because of perceived risks. But at California gas stations, tapping feels safer. Real people do not behave the way academic research expects them to.
Purpose: This study develops and tests a conceptual model that combines the modified Unified Theory of Acceptance and Use of Technology (UTAUT2) with a consumer brand engagement model to predict consumers’ usage intentions toward contactless payment systems in a developed country.
Design/methodology/approach – We cooperated with a contactless payment service provider in Finland and reached out to 22,000 customers, resulting in 1,165 usable responses. The collected data were analyzed using structural equation modeling.
Findings – The study shows that the UTAUT2 and the consumer brand engagement model together explain approximately 70% of the variance in usage intention. Of the predictors, habit and consumers’ overall satisfaction have the strongest influence on usage intentions. The model also confirms the positive relationship between intention and use.
Practical implications – Understanding the reasons for both the intention to use and the continued use of contactless payments is important for merchants, banks, and other service providers. This study shows which technology adoption factors drive both the intention and the use of contactless payments. The finding that intention is mainly driven by habit and overall satisfaction and not by hedonic reasons indicates that such behaviors are difficult to change.
Originality/value – This study is among the first to examine contactless payment usage in a developed market, where over half of all point-of-sale transactions are executed using contactless payment cards and/or cell phones.
Before coming to Stanford, I never imagined that going to the gym every day would feel so natural. Yet, working out has become a regular part of my routine. Why?
It is not about willpower. Instead, two seemingly unrelated activities have effortlessly reinforced my gym habit.
First, every time I enter the gym, I pick up The Stanford Dailybefore exercising. Picking up a freshly printed newspaper feels refreshing, even though I rarely read it thoroughly.
Second, after my workout, I head straight to the outdoor swimming pool. The consistently warm water and open-air setting make swimming feel enjoyable. I have become so accustomed to this swimming pool that I do not want to miss a day even when it is raining.
My pattern suggests a strategy for making self-control tasks like exercising more sustainable. I wrap the core, demanding task (exercise) with enjoyable, effortless activities (picking up newspaper before and swimming after), like sugar-coating a bitter pill.
This strategy differs from temptation bundling, where a reward is combined with a main task at the same time, like listening to an audio book while exercising. Instead, I distribute rewards before and after the main task.
This study provides the first evaluation of a newly engineered type of commitment device—a temptation bundling device. It shows that in the setting explored, where exercise was bundled with tempting audio novels, this new type of commitment device is valued by a significant portion of the population studied. Further, we find that when temptation bundling is imposed on a population, it can increase gym attendance by 51% at low cost when it is initially instituted, although as in most exercise interventions This study provides the first evaluation of a newly engineered type of commitment device—a temptation bundling device. It shows that in the setting explored, where exercise was bundled with tempting audio novels, this new type of commitment device is valued by a significant portion of the population studied. Further, we find that when temptation bundling is imposed on a population, it can increase gym attendance by 51% at low cost when it is initially instituted, although as in most exercise interventions.
At the Ala Moana Shopping Center in Hawaii, a vending machine encourages donations. I do not know who designed this Giving Machine, but I am certain it is inspired by scientifically tested ideas in psychology and behavioral economics.
Before elaborating on three specific reasons, the key to its effectiveness lines in the vending machine itself. Unlike traditional charity appeals that vaguely describe where money goes, this machine allows donors see their choices clearly. The message on the machine also states: “100% of your donation goes to the charity cause of your choice.” This transparency reduces uncertainty.
However, visual clarity is just the beginning. Beyond visibility, three behavioral economics insights make this machine highly persuasive.
First, it offers multiple options, leveraging the power of choice. Donations range from $5 (sponsoring a meal) to $100 (after-school care). When presented with multiple options, people tend to focus more on the choice itself, making them more likely to choose at least one. By offering a structured selection, the machine nudges people toward making a donation rather than passing by.
Second, it shifts the decision from who to help to what to choose. Traditional charity appeals often focus on recipients such as disaster victims. This machine instead presents donors with tangible options such as bus passes, diapers, and hygiene kits, to name a few. This shift in framing nudges donors to engage more deeply by selecting specific solutions rather than simply reacting to an emotional appeal.
Third, the machine displays a pile of selected donations at the bottom. This is exactly an application of the goal-gradient hypothesis. People accelerate their efforts as they perceive themselves closer to a goal. Seeing donations accumulate creates an illusion of progress, encouraging more contributions.
A simple vending machine, yet a masterful execution of behavioral economics insights!
Belief in one’s ability to exert control over the environment and to produce desired results is essential for an individual’s well-being. It has repeatedly been argued that perception of control is not only desirable, but is also probably a psychological and biological necessity. In this article, we review the literature supporting this claim and present evidence of a biological basis for the need for control and for choice—that is, the means by which we exercise control over the environment. Converging evidence from animal research, clinical studies, and neuroimaging suggests that the need for control is a biological imperative for survival, and a corticostriatal network is implicated as the neural substrate of this adaptive behavior.
We randomize advertising content motivated by the psychology literature on sympathy generation and framing effects in mailings to about 185,000 prospective new donors in India. We find a significant impact on the number of donors and amounts donated consistent with sympathy biases such as the “identifiable victim,” “in-group,” and “reference dependence.” A monthly reframing of the ask amount increases donors and the amount donated relative to daily reframing. A second field experiment targeted to past donors, finds that the effect of sympathy bias on giving is smaller in percentage terms but statistically and economically highly significant in terms of the magnitude of additional dollars raised. Methodologically, the paper complements the work of behavioral scholars by adopting an empirical researchers’ lens of measuring relative effect sizes and economic relevance of multiple behavioral theoretical constructs in the sympathy bias and charity domain within one field setting. Beyond the benefit of conceptual replications, the effect sizes provide guidance to managers on which behavioral theories are most managerially and economically relevant when developing advertising content.
The goal-gradient hypothesis denotes the classic finding from behaviorism that animals expend more effort as they approach a reward. Building on this hypothesis, the authors generate new propositions for the human psychology of rewards. They test these propositions using field experiments, secondary customer data, paper-and-pencil problems, and Tobit and logit models. The key findings indicate that (1) participants in a real café reward program purchase coffee more frequently the closer they are to earning a free coffee; (2) Internet users who rate songs in return for reward certificates visit the rating Web site more often, rate more songs per visit, and persist longer in the rating effort as they approach the reward goal; (3) the illusion of progress toward the goal induces purchase acceleration (e.g., customers who receive a 12-stamp coffee card with 2 preexisting “bonus” stamps complete the 10 required purchases faster than customers who receive a “regular” 10-stamp card); and (4) a stronger tendency to accelerate toward the goal predicts greater retention and faster reengagement in the program. The conceptualization and empirical findings are captured by a parsimonious goal-distance model, in which effort investment is a function of the proportion of original distance remaining to the goal. In addition, using statistical and experimental controls, the authors rule out alternative explanations for the observed goal gradients. They discuss the theoretical significance of their findings and the managerial implications for incentive systems, promotions, and customer retention.
At Stanford University, parking is segregated based on how much you pay. Drivers can purchase Permit A for $133 per month or Permit C for $38 per month. Each permit dictates where you are allowed to park. Permit A holders must park in Permit A-designated areas, while Permit C holders are restricted to Permit C zones.
This tiered system ensures that those who pay more get closer and more convenient parking, while lower-paying permit holders have to park farther away. For example, in the five-story outdoor Via Ortega Garage, the lower two floors are reserved for Permit A holders, while the upper three floors are designated for Permit C holders.
The same pricing structure applies to indoor, underground parking facilities like Roble Field Garage. Permit C holders should drive farther down to find an available spot than permit A holders.
Permit A parking lots are often partially empty, while Permit C lots are crowded. Those who pay more not only get better locations but also enjoy less competition for spaces. The message is clear: convenience comes at a price.
While searching for an empty space in the Permit C parking lot, a thought crossed my mind: Why not pay $100 more to enjoy convenience?
Then, it struck me that I had become so absorbed in choosing between two permits that I completely ignored a third, unspoken option which I once enjoyed: riding a bicycle. The very act of choosing between two permits kept me from questioning whether I needed to drive at all.
We are born to choose. Once presented with options, we become fixated on making a choice, failing to recognize that the choice itself may be artificially constructed. Differentiated parking fees may subtly reinforce car dependency instead of encouraging biking.
Belief in one’s ability to exert control over the environment and to produce desired results is essential for an individual’s well-being. It has repeatedly been argued that perception of control is not only desirable, but is also probably a psychological and biological necessity. In this article, we review the literature supporting this claim and present evidence of a biological basis for the need for control and for choice—that is, the means by which we exercise control over the environment. Converging evidence from animal research, clinical studies, and neuroimaging suggests that the need for control is a biological imperative for survival, and a corticostriatal network is implicated as the neural substrate of this adaptive behavior.
In the crowded world of running shoes, big names like Nike and Adidas are everywhere. But even with these giants, ON Running is making a mark.
It started in 2010 in Switzerland. One of the three founders, Olivier Bernhard, wanted a new kind of running shoe. He tried something different by attaching pieces of garden hose to shoe soles. This simple idea led to CloudTec, making runners feel like they are running on clouds.
One possible reason why ON Running is successful is its smart naming of this technology. The word “Cloud” signals softness, while “Tec” adds a sense of innovation. Without knowing the details of the technology, consumers can easily grasp that these shoes provide a unique running experience: soft landings followed by explosive take-offs.
This research develops a taxonomy of alphanumeric brand names (ABs) based on the alignment between the brand names and their links to products and attributes. Five empirical studies reveal that ABs have systematic effects on consumers’ product choices, moderated by consumers’ need for cognition, the availability of product attribute information, and the taxonomic category of the AB. In an identical choice set, the choice share of a product option whose brand name takes a higher versus lower numeric portion (e.g., X-200 versus X-100) increases, and it is preferred more even when it is objectively inferior to other choice alternatives. Consumers with low need for cognition use “the higher, the better” heuristic to select options labeled with ABs and choose brands with higher numeric portions. Consumers with high need for cognition process ABs more systematically and make inferences about attribute values based on brand name–attribute correlations. The effects of ABs on consumer preferences are prevalent for most technical products, even when consumers do not know the product category or meanings of attributes.
