What can Bowerbirds teach us about retail fashion and nonconscious market research?
Quite a lot, it turns out, as Dr. Aaron Ashley Reid, PhD. explained when he presented at the Nonconscious Impact Measurement Forum (NIMF) in New York in November. In his presentation, available in the video below courtesy of NIMF organizers, Dr. Reid explains how Sentient Decision Science helped a major U.S. fashion retailer predict in-market sales for a product with 94% accuracy by combining conscious and nonconscious implicit research approaches.
“These are forward-looking predictions,” Dr. Reid told his audience at NIMF. “These aren’t sales that happened in the past that we’re retrofitting data to them. These are leading indicators of future sales. It’s very rare that you get that level of predictive accuracy with leading indicators of sales.”
>>Dr. Reid: The first thing I want to do is push the envelope and explore the idea of the nature of nonconscious marketing and then the second thing we’re going to do is bring that to life in a case study with sales validation.
I appreciated Carl’s comments this morning on the importance of validation and how critical that is for us as an industry. And I really like Michael Smith’s illustration of the reliability of EEG. I think we need more of that validation here in the marketplace as we come forward with these methods.
So, let me start by pushing the envelope. I want to begin with some marketing that’s currently happening in New Guinea. (Plays video.)
What’s he selling? Himself? Sex? Yeah, he’s selling his genes. Let’s do the superb bird of paradise.
Ouch! Is that a conscious pitch? Is that what we would call a system 2 argument being made? Would you say those are system 1, so to speak, nonconscious cues being communicated? Does this relate to things other than birds in New Guinea?
Do humans react to these same nonconscious cues in the mate-selection market? It probably goes without saying, so to speak. And it’s not just female social cues. Men are concerned about this as well. When this young man is picking out this jacket (references slide in presentation), is he thinking, “That jacket is going to increase the width of my shoulders in terms of the ratio to the width of my hips and therefore make me more attractive to potential mates in the market?” Probably not thinking that, but that’s exactly what it’s going to do.
We want to push the envelope here this afternoon on nonconscious marketing and propose this idea that marketing didn’t begin with the first TV ad in 1941 or the first radio ad or the first magazines in 1731, or with the Gutenberg printing press in the 1450s? Did it even begin with the town crier on the corner who was extolling the virtues of some service or some event that they wanted you to go see.
We want to make the argument that marketing began with the first market, which was the market for genes. (Not these kind of jeans.) Marketing, at its essence, is a gene propagation system. So marketing really began with the advent of sexual selection. And if marketing began with the advent of sexual selection, it was necessarily nonconscious.
And it’s still largely nonconscious today. So we want to push the envelope to have you think that perhaps the nonconscious influence on marketing is even more pervasive than you thought before. And that’s a big statement to make to this room, who studies the nonconscious on a daily basis.
The influence of the nonconscious on behavior may be even more pervasive than you formally thought. But we don’t want to stop there because studying humans is different than studying birds. And yes, we respond to these nonconscious cues but when we’re thinking about what products to buy and are influenced by stimulus in our environment about what products to buy, our system 1 is activated, but it’s giving rise to system 2 consideration as well.
So when we think about system 2 consideration, we’ve got to characterize it according to what it is. It’s deliberative. It’s reason-based, and it’s propositional, meaning that it functions on if-then statements. If I buy this product, then I think I will feel this way. Therefore, I will buy that product. It’s obviously very cognitive and higher order. And it’s the combination of those two systems, the nonconscious cues with the system 2, reason-based thinking that produces the most holistic model of human consumer decision making.
So, let’s bring this to life in a study on fashion that’s actually about projecting the sense of self to the market for many reasons. One may be mate selection but you may have other goals with the choices of clothing that you choose to wear.
This was done in partnership: Sentient Decision Science and a major U.S. retailer who is in the fashion industry. And they have about a six-hundred million dollar brand that was in decline. They sell many brands within their stores. This particular brand was on a three-year decline in sales. They were trying to understand what product was going to be the most successful for their particular target market.
And that target market was actually a conservative market. So, they came to Sentient and they had two new lines coming out. One was coming out in the spring and the second one was coming out in the fall. And this was April. So, they asked us to do the study, they said, “Can you tell us which one of these products is going to be most successful, both for our spring line as well as for our fall line?”
We said, “Sure.”
And if you were typically doing a study like this, you might put a product up on the screen, put a brand on it, put a price on it, and ask, “What’s the likelihood that you would purchase this product?”
And it’s probably fair to say that this room, that we all know that those kinds of stated-purchase likelihood questions are not the best predictors of actual future behavior. But it is a conscious measure, right? It is accessing system 2. It’s presenting me with a product and it’s saying deliberate on this and tell me what you would do.
So, accessing system 2 in this case is important. But we have better ways of accessing system 2 and evaluating system 2 than purchase-likelihood questions. A great example is choice-based conjoint. In a choice-based conjoint study, you put multiple products in a choice scenario. You can manipulate brand and price and product and you ask people to give you an answer on what they would choose in this scenario.
You’re getting really good information from these tasks. You’re actually deriving insight on what’s important by observing their trade-offs. Now, a lot of the folks who do choice-based conjoint work would tell you that system 1 is baked in there, you know, the emotional response is baked into what you’re getting there.
And it is, in part. To Paul’s point, it’s not completely dissociated from system 1. And we wouldn’t expect it to. We would expect system 1 to be an influence on your system 2 judgements.
But let’s be very clear about what conjoint it. It’s a deliberative, reason-based, system 2 measure that’s influenced by the nonconscious. When you do these studies, you get something called expected utility or subjective, expected utility and it’s actually very predictive of market sales. It’s a very good measure. As a derived measure, system 2 measure, this is one of the better ones in the marketplace.
But what if we could enhance that measure with a pure implicit approach? In the study we did the conjoint and we simultaneously did an implicit test. Nate is going to run this implicit test, an example of it, right now.
(Sentient demonstrates Sentient Prime™ implicit research software.)
So we’ve got two pieces of information. One is more system 1 and the other one is more system 2. And we have such a great relationship with the client, the sales data came out in May and we said after the product was sold, “Will you give us the sales data and will you also give us the buy, that is how much you stocked of each product? We want to see how accurate all of these predictions might have been.”
So the sales for each product, as you can see, are here on the y-access. The buy is along the x-access. So this is essentially a prediction of what’s going to be successful in the market before they did any research. The buyer correlation with actual sales is about .53. You might say, “OK, that’s not bad,” given no information. But the R2 value is 28%. That means that the buyer is only accounting for 28% of actual in-market sales. A tremendous amount of product is going to the clearance rack at 80% off.
But what about the predictions? And what about the conscious model?
If we just look at the data coming out of the conjoint, we see the correlation between the conjoint predictions–the system 2 predictions and actual sales increases– significantly to account for 69% of the variants in in-market sales. So, if you were looking at this data, you’d say, we’ll at least do some research that’s going to give you much better accuracy in predicting what will be successful.
But there’s obviously a punchline and the punchline is this: When you combine the system 1 and the system 2 data into a single, unified algorithm for predicting sales, you’re accounting for nearly 94% of actual in-market sales. This is the power of combining our best conscious techniques with our best scalable, quantitative, nonconscious techniques into a single model to predict sales.
Just so you know it’s not a fluke, that was fashion study number one. Here is fashion study number two, .93; fashion study number three, .92; and here is fashion study number four, almost .9. Not always .9.
I want to emphasize this one point. These are forward-looking predictions. This isn’t sales that happened in the past that we’re retrofitting data to. These are leading indicators of future sales. It’s very rare that you get that level of predictive accuracy with leading indicators of sales.
Just in case you think this is just about mate selection and projecting the self image, we’ve seen the same results from oatmeal studies to automotive studies (I know Sarah Hecht would love to talk to you about those studies). We’ve seen it in banking to baby food. It’s really called “infant nutrition,” but I couldn’t resist the alliteration.
Come see us at our booth. Full service market research. That’s the first way you can work with us. But here’s something for the market researchers in the room. The second way you can work with us is through software as a service. We provide Sentient Prime™ implicit research technology to any researcher who wants to understand the nonconscious. You can try it out at try.sentientprime.com.