Herd Instincts and Shopping

by F.

From The Economist:

In Mr Usmani’s supermarket every product has a radio frequency identification tag, a sort of barcode that uses radio waves to transmit information, and every trolley has a scanner that reads this information and relays it to a central computer. As a customer walks past a shelf of goods, a screen on the shelf tells him how many people currently in the shop have chosen that particular product. If the number is high, he is more likely to select it too.

Mr Usmani’s “swarm-moves” model appeals to supermarkets because it increases sales without the need to give people discounts. And it gives shoppers the satisfaction of knowing that they bought the “right” product—that is, the one everyone else bought. The model has not yet been tested widely in the real world, mainly because radio frequency identification technology is new and has only been installed experimentally in some supermarkets. But Mr Usmani says that both Wal-Mart in America and Tesco in Britain are interested in his work, and testing will get under way in the spring.

The same goes for music:

Another recent study on the power of social influence indicates that sales could, indeed, be boosted in this way. Matthew Salganik of Columbia University in New York and his colleagues have described creating an artificial music market in which some 14,000 people downloaded previously unknown songs. The researchers found that when people could see the songs ranked by how many times they had been downloaded, they followed the crowd. When the songs were not ordered by rank, but the number of times they had been downloaded was displayed, the effect of social influence was still there but was less pronounced. People thus follow the herd when it is easy for them to do so.

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