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. These red stickers are placed across seams on the pump, so if someone tries to tamper with the machine, the seal breaks.
Now I instinctively look for these red stickers. This simple visual cue changes further 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.
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.
However, fast service alone is not enough. Dutch Bros succeeds because of its superior customer experience. Unlike Starbucks, which can feel transactional, Dutch Bros creates a warm and personal experience. Their “broistas” (baristas) often remember customers’ names and favorite drinks, making visit feel like a conversation rather than a purchase. The company’s motto, “We may sell coffee, but we are in the relationship business,” reflects its focus on customer connections.
Dutch Bros understands what Gen Z wants, that is, a fast and friendly experience. Rather than focusing solely on coffee taste, it focuses on the experience of coffee buyers. Customer experience matters.
Understanding customer experience and the customer journey over time is critical for firms. Customers now interact with firms through myriad touch points in multiple channels and media, and customer experiences are more social in nature. These changes require firms to integrate multiple business functions, and even external partners, in creating and delivering positive customer experiences. In this article, the authors aim to develop a stronger understanding of customer experience and the customer journey in this era of increasingly complex customer behavior. To achieve this goal, they examine existing definitions and conceptualizations of customer experience as a construct and provide a historical perspective of the roots of customer experience within marketing. Next, they attempt to bring together what is currently known about customer experience, customer journeys, and customer experience management. Finally, they identify critical areas for future research on this important topic.
Similarly, two hand dryers vary their heights in the Mountain View Public Library.
The Santa Cruz amusement park includes one sink with a footstep among a row of basins.
These height variations comply with accessibility codes to accommodate a broader range of users, including children and individuals with disabilities. They are specified in the California Building Code (CBC), Chapter 11B.
According to Section 11B-605.2 of the CBC, urinals must be either stall-type or wall-hung, with the rim positioned no higher than 17 inches (432 mm) above the finished floor. Additionally, urinals are required to have a minimum depth of 13½ inches (343 mm), measured from the outer face of the urinal rim to the back of the fixture.
In all the cities I have visited including Toronto, Seoul, and Copenhagen, I have never encountered men’s restrooms with urinals at varying heights. It was only after being exposed to this design in California that I became aware of how some individuals might struggle with standard urinals.
Certainly, ideal height for urinals is arguable. However, regardless of the practical effectiveness of the height variations, California’s effort to accommodating different people is psychologically effective. This enforced inclusivity encourages me to be more considerate of others including children or individuals in wheelchairs. Design can reveal aspects of the world we overlook.
Inclusive design considers the needs and capabilities of the whole population to decrease the actual or perceived mismatch between the user and the design object. We review the inclusive design literature across multiple disciplines to conceptualize inclusive design, identify who should be included in the inclusive design process, present an overview of the evolution of design approaches, and summarize best practices on how organizations can facilitate inclusive design. We posit three levels of inclusive design based on the diminishing degree of mismatch between the user and the design object: providing accessibility (Level 1), engaging participation by creating equitable experiences (Level 2), and facilitating empowered success via flow experiences (Level 3). We introduce our Design, Appraisal, Response, Experience (DARE) framework to explain the complex cognitive appraisals and emotional responses that each of these three levels of inclusive design elicits and underscores the notion that inclusive design works best when it’s not intended for a specific need, but rather benefits anyone who uses it. We conclude with a call for future research in this rich and important domain of investigation that seeks both to understand consumer response to inclusive design and to incorporate inclusive design into brand strategy, practice, and policy.
After arriving in California, I was struck by a coffee pod brand completely unfamiliar to me: Keurig. Despite owning a Nespresso coffee machine at the office and a De Longhi espresso machine at home, I was surprised that I had never seen or heard about Keurig before.
In California, Keurig machines are everywhere. The brand holds 41% of the single-serve coffee machine market in the United States and is estimated to have three times the sales of Nespresso nationwide.
However, Nespresso is the leading coffee capsule brand in most other markets. In Korea, it dominates the coffee machine market with a 52% share.
The biggest advantage of Keurig is that many coffee companies produce pods or capsules compatible with its machines. Brands like Starbucks, Peet’s Coffee, and Dunkin offer options for Keurig users. Additionally, Keurig machines and K-Cups are generally more affordable than Nespresso machines and capsules.
Does this mean cultural differences explain their dominance in different markets? Do Californians value variety and quantity, while Koreans appreciate premium experiences?
Cultural differences are unlikely to be reasons. The real explanation is much simpler: people rarely switch from the brand they first encounter. Californians often start with Keurig because it is the most accessible option, while Koreans are introduced to Nespresso through advertising. Once preferences are formed, they tend to stick.
Each brand’s popularity may not be driven by taste or luxury but by who enters the market first. This is why Uber holds an advantage over Lyft in ride-hailing services and why Waymo continues to thrive while Cruise failed in the self-driving car industry.
Examined whether pioneering advantage could arise from the process by which consumers learn about brands and form their preferences (PFs). In 2 experiments with 103 MBA students, hypothetical emerging markets were constructed, varying the order of brand (computer software packages or down quilts) entry across Ss and the types of competitors that subsequently entered the market. Analysis showed that PFs were influenced by the order of brand entry. Moreover, the PF formation process produced a PF structure that made a pioneer’s market share largely invulnerable to competitors, even if switching costs were minimal and brands could reposition.
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.
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.
At Santana Row in San Jose, the Blue Bottle Coffee store captures attention with its European-inspired design. A shaded patio under a huge tree, cozy seating, and a fountain create the ambiance of a European plaza.
What struck me, however, was my assumption that Blue Bottle was a Japanese brand due to its minimalist design and precise brewing methods. To me, this coffee brand felt synonymous with Balmuda, a Japanese Electronics brand that prioritizes simplicity.
However, the truth surprises me. Blue Bottle is neither Japanese nor European. It was founded in Oakland, California, in 2002. While it embraces Japanese style, the brand’s actual roots are Californian. In 2017, Nestlé acquired a majority stake, expanding its reach to over 100 locations worldwide, including Japan, South Korea, and China.
Despite its true origins, Blue Bottle seems to benefit from the misconception of being Japanese. Although research shows that authenticity of origin enhances value, my observation flips this insight: when a brand’s origin is incorrectly perceived but aligns with its narrative, it can still elevates value. For Blue Bottle, the misperception of Japanese origins strengthens its image of precision and sophistication. Authenticity may not matter as much as perception.
It is well established that differences in manufacturing location can affect consumer preferences through lay inferences about production quality. In this article, the authors take a different approach to this topic by demonstrating how beliefs in contagion (the notion that objects may acquire a special aura or “essence” from their past) influence perceptions of authenticity for everyday consumer products and brands. Specifically, they find that due to a belief in contagion, products from a company’s original manufacturing location are viewed as containing the essence of the brand. In turn, this belief in transferred essence leads consumers to view products from the original factory as more authentic and valuable than identical products made elsewhere.
I recently visited Las Vegas to attend CES 2025. While many exhibitions were exciting, it was a gondola ride at the Venetian Hotel that kept me thinking afterward.
I was surprised to see people willingly pay premium prices for fabricated experiences. The ride costs $39 for a 10-minute journey along an indoor canal under a painted sky. A private gondola for two costs $156! Why would anyone pay so much for something artificial?
The answer probably lies in the power of social status. These fabricated experiences are designed to be visually stunning. They create shareable moments for platforms like Tiktok or Instagram. I saw many visitors took gondola selfies under the “Venetian sky.” Authenticity may matter less than the emotions people gain from the experience.
How do economies change? The entire history of economic progress can be recapitulated in the four-stage evolution of the birthday cake. As a vestige of the agrarian economy, mothers made birthday cakes from scratch, mixing farm commodities (flour, sugar, butter, and eggs) that together cost mere dimes. As the goods-based industrial economy advanced, moms paid a dollar or two to Betty Crocker for premixed ingredients. Later, when the service economy took hold, busy parents ordered cakes from the bakery or grocery store, which, at $10 or $15, cost ten times as much as the packaged ingredients. Now, in the time-starved 1990s, parents neither make the birthday cake nor even throw the party. Instead, they spend $100 or more to “outsource” the entire event to Chuck E. Cheese’s, the Discovery Zone, the Mining Company, or some other business that stages a memorable event for the kids—and often throws in the cake for free. Welcome to the emerging experience economy.
This paper investigates whether including authentic information on the back labels of wine bottles enhances consumers’ confidence and purchase intentions about wine; it also assesses the moderating role of involvement and knowledge about wine. We conducted two experimental studies. Study 1 generated three findings. First, when the back label had authentic information, subjects showed higher confidence levels. Second, this effect was hold for subjects with low levels of involvement. Finally, we did not observe this effect for subjects with high levels of involvement. Study 2 extended study 1’s findings and identified the moderated mediation effect of confidence. The findings highlight the important impact on wine choice of authentic information. However, the findings also suggest that authentic information may not be sufficient to attract people with high levels of involvement and knowledge. This study’s findings provide wine producers with practical marketing insights.
Stan’s Donut Shop in Santa Clara, California, has been making fresh, hand-made donuts since 1959. It is a favorite place for many people who love classic donuts.
During a recent early morning visit, the shop was crowded with customers. Many were talking to their family members over Airpods which donuts to buy.
The menu offers a wide variety of donuts at affordable prices: classic glazed donuts are priced at $1.75, old-fashioned donuts at $1.25, cinnamon rolls at $3.00, and coffee at $1.50, with refills for just 50 cents.
The shop’s nostalgic ambiance, coupled with the sight of donuts being freshly prepared, evokes a sense of nostalgia that resonates with many customers. This connection to the past, along with the affordability of the offerings, exemplifies why nostalgia marketing is effective at In-N-Out in Long Beach and Cafe Strada in UC Berkeley.
Most marketing and branding activities are essentially concerned with enchantment—the rendering of the ordinary into something special. To create enchantment, companies are increasingly marketing past-themed brands and products. Yet, there is little research about why and how such nostalgia marketing creates enchantment for consumers. Building on different modalities of nostalgia identified in sociological literature (reluctant nostalgia, progressive nostalgia, and playful nostalgia), we analyze the creation of enchantment through a longitudinal, qualitative, multi-method program of inquiry. We find three routes to enchantment grounded in different nostalgia modes: (1) re-instantiation (symbolic retrojection into a past), (2) re-enactment (reflexively informing the present with past-themed brands and practices), and (3) re-appropriation (ludic re-interpretation of the past). By unfolding the different ways in which marketers can press rewind to create enchantment, we discern important implications for theorizing and managing past-themed brands in terms of marketing strategy, targeting and positioning, brand experience design, and marketing communications.
Despite the popularity and high quality of machine-made products, handmade products have not disappeared, even in product categories in which machinal production is common. The authors present the first systematic set of studies exploring whether and how stated production mode (handmade vs. machine-made) affects product attractiveness. Four studies provide evidence for the existence of a positive handmade effect on product attractiveness. This effect is, to an important extent, driven by perceptions that handmade products symbolically “contain love.” The authors validate this love account by controlling for alternative value drivers of handmade production (effort, product quality, uniqueness, authenticity, and pride). The handmade effect is moderated by two factors that affect the value of love. Specifically, consumers indicate stronger purchase intentions for handmade than machine-made products when buying gifts for their loved ones but not for more distant gift recipients, and they pay more for handmade gifts when purchased to convey love than simply to acquire the best-performing product.
When I visited Eataly at Santana Row in San Jose to shop interesting Italian food items, I had a special experience. First, I was greeted by a big circular display of cured meats and cheeses (Salumi e Formaggi). The bright lights made the food look fresh.
Around this circle, I noticed more salumi and prosciutti hanging on the walls, with their origins detailed above.
As I walked further, I found sections for fresh fish (La Pescheria) and handmade bread (La Panetteria), both well-designed and full of options.
There was also a wine area where I could taste.
What impressed me most was the store’s deliberate use of design elements. Bright lighting made items look premium. Each food section had clear labels on the ceiling. The walls had different colors. Glass was used everywhere to make the store feel open and elegant. These details created a vibrant environment.
A high-arousal store environment, like Eataly, is ideal for customers seeking a recreational experience. This grocery store appeals to shoppers, like me, who enjoy exploring new products and are willing to pay more for the enhanced experience. Eataly is more than just selling fresh food; it creates a “wow” moment that encourages customers to perceive value beyond the product.
Addressing inconsistent results in the literature, the conceptual framework that the authors develop proposes that the consumer’s motivational orientation moderates the effect of the arousal produced by a store environment on the pleasantness of the environment. Two experiments support the framework. When consumers have a recreational motivational orientation, high arousal has a positive effect on pleasantness, but when consumers have a task-oriented motivational orientation, high arousal decreases pleasantness. In addition, high arousal increases consumer intentions to visit and make purchases in the store for recreationally oriented consumers, but it has a negative impact on shopping behavior for task-oriented consumers. Pleasantness mediates the effect of arousal on shopping behavior.
