Tag Archives: California

Red stickers at the gas pump changed how we pay

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. 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.

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Reference

Karjaluoto, H., Shaikh, A. A., Leppäniemi, M., & Luomala, R. (2020). Examining consumers’ usage intention of contactless payment systemsInternational Journal of Bank Marketing38(2), 332-351.

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.

CloudTec for ON Running shoes: Intuitive naming helps sell innovation

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.

Consumers often rely on technology features that are intuitively understandable. One of my favorite examples is Quattro, Audi’s all-wheel-drive system. Even for those unfamiliar with car mechanics, the name “Quattro” suggests something powerful, stable, and reliable.

A well-branded feature name gives consumers a reason to believe in the technology, even without technical knowledge.

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Reference

Gunasti, K., & Ross Jr, W. T. (2010). How and when alphanumeric brand names affect consumer preferencesJournal of Marketing Research47(6), 1177-1192.

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.

Why do some stores attract me like magnets?

It is hard to find souvenirs in California that are not available in Korea. Because of this, I do not usually feel drawn to specific stores. However, Jupiter & Main at Half Moon Bay caught my attention. This store carefully selects items made from natural materials and hand-crafted designs. The collection includes leather goods and handmade decor.

I could not pass by another store, Makers Market at Santana Row in San Jose. This store also features handcrafted goods made from natural materials. The range includes leather, wood, and textiles, all showcasing expert craftsmanship.

I am attracted to these stores likely because of a psychological association between the material of a product and the perception of its authenticity. For example, when a material like leather is local, I may assume that the finished product is also local. While this perception is not always accurate, it becomes stronger when handmade or hand-crafted elements are involved. This association makes handmade crafts using leather or natural materials particularly appealing as souvenirs. As someone who values authenticity, these products feel local, and stores featuring them create local experience.

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Reference

Beverland, M. B., & Farrelly, F. J. (2010). The quest for authenticity in consumption: Consumers’ purposive choice of authentic cues to shape experienced outcomesJournal of consumer research36(5), 838-856.

Drawing from image-elicited depth interviews, we investigate whether consumers pursue the consumption of authentic objects with specific personal goals in mind. We find that consumers are motivated to focus on those particular cues in objects that for them convey authenticity (what is genuine, real, and/or true) and that this decision-making process is driven by a desire to draw different identity benefits (control, connection, virtue) from authentic objects. Our interpretive analysis elaborates contributions to theorizing related to consumer agency in seeking authentic consumption experience. We provide cultural explanations for the desire to assert the authentic self in these particular ways.

Lint rollers in lockdown: Is California overreacting?

During a visit to a CVS store in Redwood City, California, I encountered an unexpected barrier to purchasing something as simple as lint rollers. These inexpensive items were locked behind a glass cabinet, requiring me to press a button to unlock it.

The inconvenience of this process immediately raised questions about the rationale behind such measures. Why would store managers restrict access to low-value products, slowing down the shopping experience? This practice seems counterintuitive in a retail environment where seamless customer interaction leads to higher sales.

I speculate that theft prevention might be the motive. One said at Reddit about a year ago,

“We have people that, in broad daylight, will walk right in with backpacks and take everything off a shelf and shove it into their bag and leave. They don’t care if you see them, and they don’t care if they are on camera. CVS would literally not be in business anymore if we didn’t lock things up.”

However, locking up inexpensive items can do more harm than good—it frustrates shoppers and may result in lost sales, as potential buyers could abandon their purchases entirely. This calls for store management to reconsider its approach. After all, a hassle-free shopping experience remains a crucial factor in retail success.

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Reference

Bitter, A. and Reuter, D. (2024, August 11), Locked-up merchandise is turning off shoppers at CVS, Walgreens, and other big drugstores, Business Insider, https://www.businessinsider.com/locked-up-merchandise-drugstores-annoys-shoppers-cvs-walgreens-rite-aid-2024-8

  • Major drugstore chains have locked up a lot of merchandise to prevent shoplifting.
  • But the anti-theft strategy is pushing some customers to wonder: Why even shop here?
  • Locking up so many items undermines one of drugstores’ main reasons for existing: convenience.

From push to wave: How California crosswalks adapt to post-pandemic needs

Crosswalk signals in Mountain View, California, have undergone an important upgrade. The old system required pedestrians and cyclists to press a button to activate the walk signal. For cyclists, this often meant stopping and dismounting, creating an inconvenience.

In contrast, the new system is a touchless design that allows pedestrians and cyclists to wave their hand to activate the signal. This improvement makes it more convenient for everyone, especially cyclists who no longer need to stop and manually press a button.

This shift may also reflect changing attitudes towards physical touch in public spaces after the COVID-19 pandemic. Consumer researchers highilghted the importance of the “need for touch,” but this need may have diminished as people increasingly avoid touching shared surfaces. The new touchless crosswalk system may be an adaptation to this evolving preference, signaling a broader trend toward touchless design in public spaces.

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Reference

Peck, J., & Childers, T. L. (2003). Individual differences in haptic information processing: The “need for touch” scale. Journal of consumer research, 30(3), 430-442.

This research details the development of the “Need for Touch” (NFT) scale designed to measure individual differences in preference for haptic (touch) information. The 12-item NFT scale consists of autotelic and instrumental dimensions. Results are reported that support the scale’s hypothesized internal structure as well as its reliability, convergent, discriminant, and nomological validity. Individual differences in chronic accessibility to haptic information across groups varying in NFT were also found in two experiments. Additionally, NFT moderated the relationship between direct experience and confidence in judgment.

Psychology behind dynamic toll pricing in California

A recent drive on an express lane showed tolls as high as $9 to Broadway and $10 to I-380, depending on real-time conditions. What makes this interesting is that the price for using the same road is not predetermined; it is decided on the spot.

Dynamic toll pricing may adjust based on traffic volume, creating an anchor for drivers to evaluate the value of the express lane. If traffic is heavy, the higher toll can feel worth it when compared to the frustration of sitting in congestion. This shifting price serves as a real-time incentive or deterrent, depending on how drivers value their time at that moment.

Mental accounting, the tendency to categorize resources such as money and time, is a key principle at work. The price is not just about the toll but about the potential loss of time stuck in traffic. For many, the higher toll feels like a small price to pay to avoid the larger loss of wasted time, especially during busy hours.

Dynamic pricing taps into our varying perceptions of time. During a stressful commute, paying $10 to save several minutes is more appealing than when traffic is light. The system uses behavioral cues to nudge drivers into seeing the express lane as a valuable, time-saving option.

In essence, dynamic toll pricing leverages human psychology to adjust behavior in real time, making the express lane more than just a road—it is a reflection of what happens when we convert time into money.

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Reference

Soman, D. (2001). The mental accounting of sunk time costs: Why time is not like moneyJournal of behavioral decision making14(3), 169-185.

The sunk-cost effect, an irrational attention to non-recoverable past costs while making current decisions, has been documented widely in the domain of monetary costs. In this paper, I study the effect of past time investments on current decisions. In three experiments using choice situations, I demonstrate that the sunk-cost effect is not observed for past investments of time, but the effect reappears when the investments are expressed as monetary quantities. I further propose that this ‘pseudo-rationality’ is due to the fact that individuals lack the ability to account for time in the same way as they account for money. In two additional experiments, I facilitate the accounting of time and show that the irrational sunk-cost effect reappears. In a final experiment, I test my propositions in a setting where subjects make real investments of time and subsequently make real choices.

The power of defaults: How DMV’s organ donation question shapes decisions

Recently, while applying for my driver license in California, I encountered a section about organ donation. The DMV’s (Department of Motor Vehicles) approach is an example of default.

First, they primed me with two statements:

  1. “One person can save up to 8 lives, and heal over 75, through organ and tissue donation for transplantation. You can register regardless of age or health.”
  2. “Organ donation happens after death, and your decision will not impact medical treatment.”

The first statement emphasizes the positive impact, while the second addresses potential concerns. This balanced approach put me at ease and highlighted benefits.

Then comes the question: “Would you like to register?” with two options: “Yes” or “Not at this time.” This is where default comes into play. By framing the question this way, they make saying “yes” feel like the natural choice.

Interestingly, even if I chose “Not at this time,” I was informed that I am still in the registry but without the pink dot on my license that indicates donor status. This opt-out process requires additional steps, making it more likely for people to remain registered.

This example resonates the findings of Johnson & Goldstein’s 2003 study on how defaults influence decision-making. By designing the process this way, the California DMV is likely increasing organ donation rates without forcing anyone’s hand.

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Reference

Johnson, E. J., & Goldstein, D. (2003). Do defaults save lives? Science, 302(5649), 1338–1339.

“If preferences concerning organ donation are strong, we would expect defaults to have little or no effect. However, as can be seen in the figure, defaults appear to make a large difference: the four opt-in countries (gold) had the lower rates than the six opt-out countries (blue)… One reason these results appear to be greater than those in our laboratory study is that the cost of changing from the default is higher; it involves filling out forms, making phone calls, and sending mail.” (pg. 1339)