5 Interesting reads for this week!

Ghosting, Pigging and Catfishing in online dating

Crossing the funnel of online dating is not easy, you need a lot of swipes, to get a match, a lot of matches to get a date and a lot of dates to get to the second and third date. While the positives are that you can reach out to people who are beyond your social circle, but excessive choice might actually make one unhappy if it still doesn’t result in a relationship. Ghosting someone with whom who you have no social overlap is convenient, hence getting out of a relationship when you spot a deal breaker or any red flags is quick and painless for at least one party. Online dating does come with its own set of challenges like racism, inappropriate content, but also catfishing, pigging and ghosting. Pigging is a new term for me, it is when guys hook up with the least attractive girl as a prank. Catfishing involves fake profiles and intent to fraud, it can go on for a while. But being rejected online stranger and being unaware of it, is definitely easier than putting your heart out and accepting rejection in the real life. Despite the issues, for the tech savvy millennials the charm of online dating doesn’t look like it will subside. #Facebook launched its dating opt-in, where users will be able to share their stories with potential dates. An already existing history of likes dislikes and behaviour serves Fb with enough data to create a matching algorithm that could be far better than competition. Will Fb replace the current players, or the anonymity and restricted access to social circles that others provide is what people really need when meeting strangers? 

How size mentioned on label can impact consumption?

Size on label not only impacts the size judgement but actual and perceived consumption. For example if a large portion was labelled as small, consumers will not only perceive it be smaller, but also feel that they have not consumed much. So if the medium size family burger combo was labelled as small, people are likely to over consume, this will happen even if the visual cue was different from the semantic cue of label. This effect is further increased when cognitive load is high even if there is presence of nutritional information. However an opposite effect is noticed when actually small items are labelled as large, it has a smaller impact on size perception. This behavior is called “guiltless gluttony”, where consumers are likely to justify their hedonistic enjoyment of consuming larger quantities when it is labelled as small. Does it make sense to define what small, medium and large sizes are in terms of calorific content, rather than what fast food chains deem right sizing?

50% off on price or 50% extra product?

What is a better offer? Price off may be seen as a reduction on loss, whereas additional product is seen as an increase in gain. From Daniel Kahneman’s prospect theory, we know that people prefer gains over loss reduction. However how much incremental gain is preferred to loss reduction is ambiguous, one study tried to answer when bonus product is preferred to price discount. Consumers have shown tendency to neglect base values when comparing percentage off type offers, resulting in errors in judgement. For example a double discount of 25% and 20% over that is preferred to the equivalent discount of flat 40% off. For consumers 25% off on price is a better deal than 25% more product, but they are likely to choose the numerically bigger offer. So if 25% off on price is compared to 30% more product, consumers will choose 30% more product. In case the same quantity is offered that is, 25% off or 25% more product, in case of unfamiliar or expensive product where risk is higher, consumers may show loss aversion by choosing the price off. In case of familiar or inexpensive products where there is no consumption risk, 25% more product will be chosen. This study has implications on how consumer promotions should be run by companies.

The Dropshipping entrepreneurs from Bali

Dropshipping is a fulfillment method, where the seller maintains no inventory, they usually find exciting products from AliExpress or other Chinese sellers and re-target those to customers in other countries via ads. When an order is received, they place an order with the seller for shipment directly to customer. The key challenge as a dropshipper is that you have no control over quality, and if the seller refuses to honour the order, you bear the brunt of customer backlash. Many western dropshippers have settled in the co-working space of Canggu in Bali running the dropshipping business. For most some start-up capital for ads, to set up an online storefront and some trial runs to identify fast selling products is enough to launch. The allure of running your own business and earning money quickly has gotten many people to Canggu, where cost of living is low and co-working infrastructure favourable. However with the costs of Facebook ads going up, low margins, high returns, the golden days of dropshipping is likely to end soon.  

Ideas from books: We are like that only

In 1990s, when supply side options grew consumers had a choice between durables and FMCG. With durables like fridge and car being a status symbol, they preferred those rather than branded shampoos. Consumers uptraded on some categories and downtraded on others. There are 3 market segments: premium, popular, and discount. Top 10% of population is premium, next 30% is popular and last 60% is discount or mass. . The premium consumers wanted goods as good as anywhere in the world, while the consuming class, the popular segment wanted value for money, and high end popular products. The discount or climber segment were the cash constrained budget maximizers, demanding adequate quality at affordable prices. With time, the quality of discount and popular products improved enough, that premium consumers didn’t mind the popular soap, and instead they chose to spend on expensive cream. On the other hand, things like sachet helped reach the discount market, these consumers used sachet for occasional use, not as a trial pack.