Monday, 4 May 2009

Retailing Information

A couple of years ago I was at the local supermarket with my girlfriend when a stranger asked me for some cooking advice. Maybe he saw my gut and realised I loved food, maybe it was just a shot in the dark that a stranger could help out, but he just happened to ask me a question that I had knowledge on the matter. From memory it was a question about cooking a laksa and what noodles to use, and I was able to give him a recommendation and even a tip on how to cook it. He thanked me and asked if I were a chef. Nope, just an average chump who happened to have slight domain knowledge on the specific point in question.

The vision impaired leading the blind
It just happened to be circumstantial that I was there to give advice, but what else could the man do? Those who work at the store are trained monkeys, and I don't mean that as an insult. Rather that the job is the facilitation between people and product, ultimate choice comes down to the individual. For fundamentals like food, this model works. It is expected that by adulthood that people can know how to cook for themselves. And domain advice is as far away as a bookstore or even in magazines in the supermarket. There are approximately 40 cookbooks in my house with recipes and instructions on cooking for many different styles. Even the internet has scores of pages dedicated to how to cook; there isn't much excuse for that.

This is modern retail, where most people running the store need only knowledge of how to speak to a customer, be able to read off a specification sheet and use a cash register. Have serious questions about a product? Then asking a retail assistant is about as useful as a visit to the manufacturer's website. Having domain knowledge about a product in so many sectors of the market is just not necessary; it's far cheaper that way. We as consumers reap the benefits from not having to pay for the premium of domain knowledge. It may be for most people that it is unnecessary, but what of those who actually need the advice? Recently I was in a pharmacy where there was a shelf full of competing products all doing roughly the same thing and at the same price. I ended up buying a few to test them out because there's really no way I could expect domain knowledge on over-the-counter products.

Yet there are specialisations where domain knowledge is beneficial to the business. Hardware stores are something I see where the employees actually know what they are talking about. It could be a few reasons for this - the DIY market is large enough to require domain knowledge, such a job attracts educated laymen, or that the type of knowledge has a wide communal base. Whatever the reason, having such specialisation somewhat offsets the extra cost of not choosing major discount outlets for hardware supplies. For music supplies, outlets have to contend with eBay and the far lower prices so the business is forced to be advantageous in other areas of the customer experience.

When it comes down to it, ultimately profitability is what matters. Domain expertise costs money, so the less that is needed in order to keep a customer base the less that expertise is worth. The higher percentage of people with domain knowledge, again the less that expertise is worth. The cost / benefit analysis is something that always needs to be taken into account. Working in a computer store would require some knowledge about how to build computers, but it would not take someone with a master’s degree in computer hardware to do so. Hiring a high school drop-out who has never touched a computer in their life, however, is going to be a problem. This is why McDonalds can hire at $5 an hour while hiring to work in a computer store would cost more.

Brand power
Ultimately capitalism is about competition between products competing for your hard earned dollar. Most of us don't live in the luxury of having enough disposable income to be product testers, so there is importance in choosing the right product to begin with. Think of the competing products as memes. For the complete ignoramus looking for a product, without a frame of reference each meme would have equal worth so there needs to be a way to judge between memes. Yet on the shelf there are ways to entice the consumer into which product to buy. The packaging, the product description, the relative cost - all factors we use when buying items. Because for most things we do not know better, it would be expecting a lot for us to know better as there is just so much out there on the market.

Shelf advertising is about trying to part you with your hard earned money, so it does pay to be informed. It doesn't matter so much to waste $20 to try a new wine, but it does matter when laying out $2000 for a new television. Being informed pays, especially when it comes to complex devices where a simple demonstration will not cut it. The bigger the investment, the more informed one should be about the product invested in. The internet is again a great tool, between product reviews by those with domain knowledge and customer reviews that provide in effect a huge testing facility, a product's strengths and flaws can be found without too much hassle.

We are social creatures who gain memes largely from others. I could have been dead wrong or deliberately misleading to that man, but for whatever reason he trusted that I knew what I was talking about. It's that issue of trust that allows for one of the more useful means to choose a product and that is brand power. While sticking to certain brands may mean missing out on a superior product, it is at least an indicator of the type of quality that is associated with a product. A brand in this way is a trust between consumer and manufacturer, a voice of approval that needs no more than a fancy graphic in order to gain seed in an individual's mind. However dishonest we know advertising is (after all, it exists to sell a product), we understand that it still works; because it can place a seed in the mind of the audience. Any meme that is positively reinforced - even through artificial reality, has an advantage on a meme that doesn't.

Power to the people
When profitability is the goal, the retail market has no reason to change to help those who aren't in the know. And advertising is going to shape the way how we interact with products - this is the consumer environment we operate in. Ignorance is unavoidable, but it is something to move away from at any given opportunity. Knowing where to look for information is vitally important, something that requires planning. Going into a store completely ignorant of the wanted product is leaving yourself vulnerable to the knowledge of those selling you the product. Asking a random stranger for advice is no guarantee of success, after all not everyone has ruined a laksa by trying to cook the noodles in the sauce only to find that they absorbed all the coconut milk.

A post script: when I was first at university, I was boarding with a middle aged man and his mother. When he would cook pasta, he would boil it for an hour. When he asked how I was able to cook my pasta so well, I replied that I followed the instructions on the back of the pack. He once tried that and it failed, so instead of cooking for a couple of minutes longer, his solution was to boil it for 5 or 6 times what was recommended. The phrase 'read the fucking manual' not only for technology, which ironically for an IT student he failed at as well.

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