Archive | September 23, 2013

More persuasive observational learning?

During our lecture today professor Ting Li talked about observational learning, one of the topics of the articles of last week. She showed us some examples of how websites apply this observational learning (OL). In most cases, websites just post how many people viewed or bought a specific product ‘before you’. However, professor Li also showed an example in which the message displayed to customers also provides information about the scarcity of the product. In this example it said something like: “this offer is only valid for 23 more days!”. This reminded me of a course I took last year.

During this course one of the subjects that was covered was the art of persuasion. Professor Li’s example reminded me of one particular article concerning this topic. In their research, Goldstein et al (2008) experimented with ways to make hotel guests reuse their towels (as this is better for the environment) more often. They did this by placing different signs in hotel rooms. On one sign the importance of environmental protection was stated, whereas on other signs statements such as “[…]In a study conducted in Fall 2003, 76% of the women and 74% of the men participated in our new resource saving program[…]”(pp. 476) . Another sign was related to specific citizens. Each hotel room had one sign randomly assigned to it and then the researchers recorded which sign actually resulted in the most towel reuse.

It turned out that the standard environmental message scored the lowest, and the specific citizen sign scored some 10% better. What was striking is that by far the highest result was achieved by a sign on which the following was stated: “[…]75% of the guests who stayed in this room (#xxx) participated in our new resource savings program […]”. For the reasons why this is the case I would like to refer to the article itself. What caught my interest related to our current IS course, however, is that I have never seen information like that on websites (as a means of fostering OL).

As Professor Li told us today, the (current) messages either tell the customer something about scarcity, previous sales, or both. What makes me wonder is how effective a message would be if it said something related to what Goldstein et al found to be most effective in their experiment. For example: ‘xx% of the people that viewed this product in April bought the product as well’. Or perhaps ‘xx% of Dutch customers who viewed this page bought this product before you’.

What do you guys think about this? Would this research apply to OL on websites? What kind of message would you think is effective? This last question is tricky, as Goldstein et al in their article also found that what people THINK is effective in fact was not at all effective (i.e. did not actually make people reuse their towels so much). I am very curious as to your thoughts on this!




Goldstein, N.J. Cialdini, R.B. Griskevicius, V. 2008, A Room with a Viewpoint: Using Social Norms to Motivate Environmental Conservation in Hotels, Journal of consumer research, Vol. 35, pp. 472-482.

Google wants to extend your life

Rotterdam – Technology pioneer Google recently announced the establishment of Calico, a company that will focus on extending global life expectancy. The search giant will use its ability and experience in exploiting Big Data to discover age-related diseases and deep dive into feasible solutions.


“Illness and aging affects all our families”, Google’s CEO Larry Page states. “With some longer term, moonshot thinking around healthcare and biotechnology, I believe we can improve millions of lives.” 

According to Page, we might currently be focusing on researching the wrong things. What might sound controversial at first, Page seems to question in an interview with TIME if directing resources to curing cancer really makes sense.  “We think of solving cancer as this huge thing that’ll totally change the world. But when you really take a step back and look at it, yeah, there are many, many tragic cases of cancer, and it’s very, very sad, but in the aggregate, it’s not as big an advance as you might think.” Three years is indeed negligible, since the goal is to increase the average lifespan by at least 100 years, according to a source involved in the project.

Calico will  be established as an independent unit, and will not be focused on making short-term profits. It will, however, been backed up by Google’s funding and experience in order to achieve its ambitious goal.

What was once just a search engine seems to become more and more of a global business. But isn’t entering the health care industry something far away from Google’s core competencies?

It is going to be exciting to see if Google will really be able to find the fountain of youth…


Nearly two-thirds of organizations invest or want to invest in Big Data, but only 8% are using it

Big data was in 2011 referred as “The next frontier for innovation, competition, and productivity”. A recent report of Gartner pointed out that 30% of organizations have already invested in big data and 19% plans to invest in it before the next year. Even more organizations are planning to invest in big data in the long term. However, not even 8% is actually using big data technology.


Expectations for 2013 are that 34 billion US dollars will be invested in big data, but many companies are still trying to figure out how big data fits their strategies.

Gartner discovered several trends in how companies plan to use big data technology:

  • 49% wants to increase their company’s efficiency by using big data, mainly by reducing costs or identifying risks in an early stage
  • 55% plans to use it for better customer service
  • 42% to develop new products and business models using insights derived from big data
  • 23% would like to directly monetize information

Most enthusiastic big data users or investors are mainly banking, media and communication, and service firms. Industries with the most planned investments in big data technologies are transportation, healthcare, and insurance (in that order). In terms of locations, the most concentrated “big data area” is North America, followed by the Asia-Pacific region.

Because big data is a very broad and complex term, many companies are struggling how to create value from it.

Sources used:

Searching behavior in the E-commerce market: Help, it’s changing!

Since years back consumers have used the Internet as a search tool for buying products. Imagine a consumer intending to buy a laptop 10 years ago. He would read through reviews online, he would ask friends for advice, and he would visit a brick and mortar store. Once he decided which laptop he wants, he would then search for comparison sites to find the cheapest option.

Nowadays, I notice that Internet searching techniques are vastly different. The process described above would take too long for existing customers. We want precisely the information they need, and in a more rapid fashion. To achieve this, we have changed our online searching behavior. There are some particular changes to which I think retailers should respond to.

Firstly, as consumers wish for very specific information in a very quick way, they have turned to more specific and longer search keywords. Through these long and specific search terms, the consumer better finds what he or she wants, and it appears that these longer search terms therefore also result in more people actually buying something. Moreover, consumers focus on price and therefore want price comparisons to be made possible.

Furthermore, consumers are focusing on and demanding certain information before buying products:

–          Visual images are becoming a very important feature for consumers to consider before buying their product. It has become even more important than reviews, ratings, and details about the product attributes.
–          Nevertheless, opinions of others do still matter. Consumers want to see reviews to confirm their purchase. And it appears to be working, as 70% of consumers trust consumer reviews.
–          Furthermore, consumers insist on clearly stated facts about the product attributes, rather than a description of what the attribute is able to do. For example, they rather see ‘a television with 700 Hz PMR’ than ‘an extremely high-speed television screen’.

In other words, consumers have quite high expectations these days. How do you think e-commerce retailers should live up to them? And how do you yourself search on the internet for products you want to buy?

Marleen Verweij


The Downfall of Free Record Shop


Based on the theory of Granados et al. 2008

By using the new vulnerable market theory I am trying to explain why the entertainment market has been so vulnerable and why sales at the Dutch store Free Record Shop completely dropped and a lot of brick and mortar stores disappeared.

Why interesting for you? It is just another examples which could make you better understand the new vulnerable market theory.

The new vulnerable market theory is based on three conditions and I will directly apply those conditions on the music and entertainment market and use Free Record Shop as an example.

Newly easy to enter:
Technological wise, there has been a lot of changes in this market. By the introduction of the iPod the music distribution changed to a more digital way. People – especially young people – did not buy any CDs anymore, since it was way easier to either download or buy it online. Somehow Free Record Shop completely missed this transformation and actually they still do, but more about that later…

Attractive to attack
People use music players everywhere. It is either built in their phones or they have an MP3 player. After the introduction of several MP3 players (i.e. iPod) the profitability moved from CD’s to MP3s. A couple of new entrants in the music industry saw this shift and started to sell MP3s online. An example is iTunes Music Store. Basically Free Record Shop and iTunes Music Store selling exactly the same thing, namely music, iTunes Store though recognized the shift to digital and therefore fully focused on digital music instead of CDs and hence became really profitable.

Difficult to Defend
Once Free Record Shop had a large market share in The Netherlands, it was really difficult to enter the market. Large investments were needed to have inventory and to create brand awareness.

Nowadays a lot of music stores can succeed since start-up cost are not high at all. Free Record Shop was not able to strategically move to another, more profitable – direction and was forced to, due to a lack of vision and hence enormous losses, close a lot of brick and mortar shops.

Interesting enough is that Free Record Shop still exists and they now have a webshop which obviously at least reduces the renting and inventory cost, but they still sell the CDs and not the MP3s. How long will they survive now, after they actually were bankrupt and made a new start with around 33% of the stores.

From Passwords to…. Nymi??

Passwords are an important part of our daily routine. We need it for pretty much everything and we are constantly told that you shouldn’t use a password twice though we all do it. Most people have probably between 2 and 10 passwords some of which are used at least twice.  Luckily over time things have been made slightly easier. We mostly have automated passwords on our browsers for the websites and application we use on a daily basis. And with the introduction of the Facebook plugin you can instantly connect yourself to per example the Harvard Business Review, Tripadvisor or Netflix while using your Facebook information and passwords. However with the technological changes we face the amount of passwords is growing out of hand.

Last week Apple gave us an view into a new reality of finger scanners, a technique that has been around for some time but now deemed ready to use for consumers on a global scale. This introduction didn’t come as a surprise exactly but is interesting as for what it can bring us. We are heading into a new era where at its core we see an interconnectedness of not only people but also products in other words the internet of things. In which it will be normal to have Wi-Fi or Bluetooth integrated in pretty much any object. Cisco has estimated that the amount of connected objects will grow from 8,7 billion in 2012 to over 50 billion in 2020[1]. This stretches for music installations and TV’s to in-house lighting, fridges, gas stoves and on and on.

This interconnectedness in the basis is great but also leads to several problems. For one how can we secure the use of these objects and make sure only the people who use it get access and others cannot randomly hijack your stuff.

One American company called Bionym has come up with an innovative idea that can help you get rid of all those passwords and is a safe option for identification that doesn’t ask for any touch gestures. It is called the Nymi bracelet, the bracelet registers your heartbeat rhythm which is unique to any person. They are opening a platform for developers to join in and in time could become a great alternative for using passwords  or even fingerprint scanning.  The YouTube videoin the article below shows how it works.

This product can help us in the transition from passwords to a seamless integration with your electronics. It interesting to wonder about the possibilities of this, how Nymi could become a chip in a few years’ time that is inserted under the skin, or products that can read your brain activity and so. For now and the coming years it would be great for instance if when you touch your phone it would light up and in that same instance would recognize it is you.

To sum it up, passwords are clogging our memory and the amount of passwords is steadily growing. We need a different form of identification and I think the Nymi is the first contender for this new direction.


Technology of the week team 7

This paper focusses on two upcoming forms of e-commerce: peer-to-peer (P2P) e-commerce and crowdvoting e-commerce.  With P2P e-commerce, consumers sell products and services to other consumers, so the peers are the users and suppliers of the system themselves. The company providing such a platform mediates the transactions. Crowdvoting is a form of crowdsourcing, where a group of consumers decides which products a company should manufacture by voting. These are interesting, because both of these models rely heavily on a social community for their success.

Whereas Amazon used votes to create ratings, Modcloth bases its entire sales collection on votes. Modcloth’s customers can vote through the website and social media on products that they like to see in the web shop. Consequently, Modcloth crowdsources its purchase department to their own customers; a feat made possible by modern information systems. Moreover, the voting products sell 2.5 times better than the other products in the web shop.


An important question is if a P2P business model should be seen as a consumer-2-consumer initiative rather than a business-2-consumer initiative. We think this is not the case, because a company is still needed to provide the platform on which consumers can interact. These companies are online third-party infomediaries such as AirBnb and Snappcar.

Crowdvoting and P2P e-commerce both require an active community to prosper. After high initial investments both forms can be successful due to the network effects accompanying the models.  The application of the P2P e-commerce model tends to lean toward the services industry as is the case with AirBnb, and tradable goods in platforms like Marktplaats. Crowdvoting systems seem to be more suitable for products where trends and opinions are leading, like fashion and toys. It will be exciting to see in which new industries these models will be implemented in the future!