Racial discrimination and the sharing economy — what does the research tell us?
The sharing economy is often lauded with offering a number of opportunities, from access to cheaper and more convenient consumption alternatives to new revenue streams for on-demand services. Next to the economic benefits are promises of sustainability and social inclusion. Unfortunately, not everybody stands equal in this emerging economy. Several academic papers have started to document evidence of discrimination in the sharing economy. Here we focus on racial discrimination.
In 2015, Harvard Business School researchers designed field experiments (i.e. fictitious Airbnb profiles were created to interact with real hosts) and they observed that requests from guests with African-American sounding names are 16 percent less likely to be accepted than identical guests with white sounding names (paper). Previously in 2012, they also established that black hosts in New York City had a harder time at finding guests such as they price their rentals 12 percent cheaper than nonblack hosts (paper). More recently, the analysis of Airbnb listings in the United States and Europe (2014-2015) show that hosts from minority groups (i.e. African-Americans, Arabic, Muslims, or Sub-Saharan Africans) charge 3.2 percent less for comparable listings within the same neighborhood (paper).
Another recent study of Airbnb listings in the U.S. (2015-2016) shows that participation as a host is lower in areas with higher concentrations of minority residents: That is, a typical white neighborhood would have twice more listings on the platform (four listings, at 120$/night, and 96 percent rating) compared with a non-white neighborhood (two listings, at $107/night, and 94 percent rating) (paper). That is, not everybody has equal opportunities to participate as host on Airbnb.
A similar experimental study (i.e. fictitious Airbnb profiles) conducted in 2016-2017, shows that requests from guests with African-American names (vs. white names) are 19 percent less likely to be accepted (paper). So despite Airbnb’s efforts (i.e. community commitment, removing host pictures in the initial search), these studies document that racial discrimination has always been and is still a critical issue today. There’s even a study specifically focused on Airbnb’s change of layout last year, comparing daily bookings and price data before and after the implementation of the “anonymity” policy, but it only shows a negligible increase in bookings for black hosts, and only in New York City — not in Los Angeles, New Orleans, or Philadelphia (paper).
The issue applies to other sectors in the sharing economy. For instance, a study of Uber and Lyft ride-hailing companies indicated a similar pattern of discrimination: Drivers cancelled the hailed rides twice more for passengers with African-American names (paper). In the context of freelancing marketplaces (i.e. Taskrabbit, Fiverr), a database study observed that black workers receive significantly less ratings, as well as lower ratings, compared with other workers with similar attributes (paper). So we know that both sides of sharing economy platforms — peer-consumers and peer-providers of services — suffer from racial discrimination.
Interestingly, the most recent of the Airbnb experimental studies shows that reputation and social trust play a critical role in how discrimination plays out: Guests with only one peer-review (vs. no review) from a previous Airbnb experience are considered similar, whether they have white or African-American-sounding names.5 Similarly, another recent study with real Airbnb users show that profiles with higher reputation score are rated as more trustworthy, regardless of the other demographic information (paper). The problem is that to get a reputation, people need to get to use the services in the first place. This is a vicious circle.
To date, sharing economy research on racial discrimination seems to be more focused on Airbnb, probably due to the media exposure brought by #AirbnbWhileBlack on Twitter, or Noirbnb.com and Innclusive.com (and more recently Muzbnb.com). It is tempting to call for further research, outside the Airbnb-Uber-Lyft nexus in order to enable sound policy recommendations, but what is “enough” in terms of evidence? Future studies should however investigate different geographical contexts because racism is not only a phenomenon in the U.S. but is a global issue. For instance, in 2016, a Swedish radio program sent 200 requests to hosts in the country’s three largest cities from a black person’s guest account: 42 percent were rejected because of unavailability, but when these hosts were re-contacted from a white person’s account, a third of these listings were suddenly available and the requests accepted. Since then, Airbnb has changed its policy so that hosts cannot rent a period that has previously been denied to other guests.
Photo by Toa Heftiba on Unsplash
Racial discrimination is a structural issue that permeates society as a whole and is not limited to sharing economy markets. Thus the context in which sharing economy markets are embedded is biased so platforms’ efforts at self-regulating will fail. What short-term mechanisms can be put in place to thwart societal biases and make the sharing economy opportunities available to everyone, i.e. not only to the privileged white upper and middle classes? Digital companies have demonstrated their agility in implementing change faster and more easily than traditional brick-and-mortar companies. One can also note that current papers investigate racial discrimination in the sharing economy from a business perspective. Further research should be intersectional, using Critical Race Theory (CRT) in conceptualizing the role of power, institutions, norms, and emerging economic models when it comes to racial discrimination.
Other forms of discrimination in the sharing economy include gender and LGBT-based discrimination. In the study on freelancing mentioned earlier, women were shown to receive 10 percent fewer reviews than men with equivalent work experience. Another Airbnb study in Dublin, Ireland, in 2016 found that LGBT guests were approximately 20-30 percent less likely to be accepted than other guests: hosts basically ignore their requests, without actually rejecting them. To provide a coherent, evidence-based critique of discrimination in the sharing economy, more research is necessary on discrimination for disability, age, religion, and other factors. Having a wide-ranging evidence base across a range of discriminatory activity might speed up the kind of change we know the sharing economy is capable of.
This article was originally published on Shareable (January 2, 2018).
Since 2015, I am teaching consumer behavior to international Master's students and Swedish students from the civilekonomprogram in the 10-week long course in Advanced Consumer Marketing (50 students). In my module, I explore how consumers make choices, how behavior can be influenced, the concepts of consumer identity, green marketing, status-signaling, self-control and indulgence, as well as a the eye tracking technique and experiments design as contemporary marketing research methods.
In addition to research articles from marketing journals, I ask the students to read pop science literature: either Influence (1984, 2006), or Pre-Suasion (2016) from Robert Cialdini (Professor Emeritus of Psychology & Marketing at Arizona State University). The first book covers six principles of persuasion, and the second book develops a seventh principle and the concept of Pre-Suasion. Both have plenty of business illustrations and research studies. There is a lot of material online about the first one, so only a handful of students chose the second one. I actually found Influence better written than the more recent Pre-Suasion.
I'll briefly present both books and using the slide decks from the lectures: (1) Influence / (2) Pre-Suasion.
Influence
Cialdini published “Influence: The Psychology of Persuasion” in 1984, and in a revised edition in 2006 (with more studies cited). It is also published as a textbook (since 2003).
In his influential book (ahah - no really, it’s a best seller), Cialdini argues that we all have built-in automatic response to stimuli called "fixed-action patterns." Behaviors comprising these patterns occur in virtually the same fashion and the same order every time. These regular, blind, mechanical patterns of actions are activated by a ‘trigger feature’. Cialdini characterises these automatic responses with click-whirr: “Click and the appropriate tape is activated; whirr and out rolls the standard sequence of behaviors.” Basically, we need shortcuts in today’s complex world (judgment heuristics), as brilliantly explained by Kahneman in his Nobel Prize lecture (2002).
In Thinking Fast and Slow (2011) Kahneman presents decision making as relying on System 1 (fast, intuitive, automatic, effortless, implicit, emotional) and System 2 (slow, logical, conscious, effortful, explicit, rational). But because people save cognitive effort whenever possible (we are very lazy), they tend to rely on System 1 when making mundane, routine-like decisions (i.e. grocery shopping). Such psychological understanding of decisions making has implications to many consumer behavior situations.
In this book, Cialdini presents six principles to mimic the trigger features that stimulate automatic decisions. It works well most of the time, and, Cialdini notes that it can also be used unethically (so people should be aware of their influence).
Reciprocity: we want to repay, in kind, what another person has provided us
Likability (Similarity): we say yes to someone we like
Social proof (Consensus): to determine what is correct, find out what other people think is correct
Authority: deep sense of duty to authority
Consistency (Commitment): desire to be (and to appear) consistent with what we have already done/said
Scarcity: limitation increases desirability
Based on this understanding, I further asked the students to reflect on their everyday consumer behavior and pay attention to their own decision marking. They came up with interesting questions that we further discussed in a seminar. Overall, they seemed to have better understood the principles of influence at play on consumer behavior by considering their own consumer experience.
Pre-Suasion
30 years later, Cialdini decided to write another book “Pre-Suasion: A Revolutionary way to Influence and Persuade”. (2016). He said that there was finally enough research to back him up. That’s why the second half of the book are basically references (and bibliographical notes). In Pre-Suasion, he argues that what successful influencers do is introducing a sympathetic message, a concept, or an idea, at the right timing (creating a ‘privileged moment’), so that their audience associate positively what comes next.
“By guiding preliminary attention strategically, it's possible for a communicator to move recipients into agreement with a message before they experience it. They key is to focus them initially on concepts that are aligned associatively with the yet-to-be-encountered information.”
Cialdini further argues that it is the process of arranging for recipients to be receptive to a message before they encounter it. But the window of opportunity is only open for a privileged moment where people are more likely to be influenced, so pre-suasive practices create opportunities to persuade.
Persuaders use ‘Openers’ (e.g. frames, anchors, primes, mindsets, impressions) that render individuals vulnerable to aligned requests. Then, attention is focused on one aspect of the situation, and suppressed from competing aspects. Cialdini develops on how to attract initial attention with ‘Sex & Violence magnetisers’ that connect to our primitive motivation (reproduction and survival). He also argues for using language that is self relevant (you; age, sex, health, or anything specific about the recipient), emphasising unfinished tasks (making it more memorable, retaining attention until the activity is complete), and creating a mystery (i.e. an enigma in which the recipient is invited to review the subsequent material).
Unity is more than just liking (similarities), something is shared (the persuadee believes that the persuader “is one of us”). Cialdini tells the story of a family A sending Christmas cards to another family B who they don't even know, but then send each other nice wishes every winter, since family A received a postcard from these strangers (probably by mistake). For 10 years, they keep on exchanging Christmas cards until one day, the stranger family B asked if their son could stay with family A for a short while. Over time, both families created a WE relationship, that resulted in letting a stranger stay at their place.
Warren Buffet’s letters to investors at Berkshire Hathaway intend to create a feeling of BEING together, with family/kinship arguments. By writing 'we made this mistake’ early on, and later what investors should be doing (keep giving him money), Buffet readies them to process the next thing he's going to say more deeply because he established himself as a trustworthy source. Also, by addressing investors like family members, he pre-suasively make them judge his argument as even more convincing.
Eye tracking experiments
The idea for the students is to design and test a laboratory experiment using the eye tracking technology. Throughout the week, each group applies their understanding of an advanced research method in a relevant consumer behavior phenomenon of their interest. They use a stationary eye tracker at LiU to collect data; and a nightmarish organisation so that they can both run and participate in each other’s experiments (10 groups).
At the end of the week, they hand-in a report explaining why they conducted the experiment (consumer behavior background, hypotheses), how they designed it (understanding of the eye tracking technology), what results were provided (analysis of heat maps and gaze maps, combined with dichotomous choice data), and who can use their findings (relevance, conclusion). A final seminar where each groups presents their work enable the whole class to come together (understand what kind of guinea pigs they have been) and reflect on their learnings from the module on consumer behavior.
It is always fascinating to see what the students come up with as experiment designs. Most of them compare two stimuli, while modifying one of them ( = the experimental treatment) to test their hypothesis. They were interested in the impact of colours (red would be associated with cost savings), the relevance of product endorsements (Zlatan Ibrahimovitch’s signature), the impact of sexual cues in advertisements (on brand recall and product choice), the role of product information on choice, in various settings (displaying certification on packaging, indicating health-benefits on the price tags), and whether directional cues are actually transferring attention or distracting.
This course is a really great learning experience from me, and I believe the students appreciate having the opportunity to design their own experiment, even though it’s in a tight schedule! They also seemed satisfied with the practical aspect of the module (“instead of reading articles, we did something!”).
Swedish commission on Taxi and Ridesharing services
Last week, a year-long investigation was concluded and handed over the Swedish Infrastructure Minister. The “Taxi and Ridesharing commission” (Directive 201581 - taxi och samåkning utredningen) was set to investigate three key issues relevant to the mobility sector:
Whether a taximeter should be mandatory in all vehicles used for taxi services.
Whether there is a need for a new category of professional drivers (or semi-professionals) who carry passengers with their private car, light truck, or any other vehicle.
Whether there is a need to change or clarify the existing rules for ridesharing between private individuals.
THE SWEDISH ACTORS
The non-profit Ridesharing Movement Skjutsgruppen has about 70.000 participants. It all started as a Facebook group in 2007 to facilitate interactions between private individuals who wish to share a car, a boat, a bus and what not, for a trip. Today, more than 50.000 people still arrange rides on Facebook, but Skjutsgruppen has it own website with search functions and integrated maps since 2012. In 2014, Skjutsgruppen reported 1.6 billion km shared in Sweden; which is relatively high compared with the 5 billion km shared on BlaBlaCar in 18 countries. Skjutsgruppen has also established strong partnerships with 30 municipalities and regions to develop collective transportation that includes ridesharing which led the collective public transportation industry to name its founder the 2016 Traffic Hero (Årets Trafiklabhjälte prize) last month.
GoMore began as a ridesharing platform in Denmark (2005) as a non-profit organization (similarly to BlaBlaCar, moved to a for-profit business model in 2011), and only entered the Swedish market in 2014. GoMore takes a 10% commission from the driver’s fixed price and has approximately 50.000 users in Sweden. In June 2015, GoMore launched its P2P rental services in Sweden too, so that its platform users can both share empty seats or underutilized cars (Gomore has a 20% commission on each car rental). GoMore has adopted a more commercial approach to ridesharing, campaigning aggressively in Sweden to gain market share (i.e. advertising for GoMore’s platform in existing Skjutsgruppen’s Facebook groups, proposing car owners to “advertise” their cars to make more profit). It also expanded its services to France in January 2016, although Drivy.fr is the world leader in P2P car rentals.
Samåkning.se (2008) takes a 12.5% fee from the passengers when booking online. Owned by Sysware GMBH in Germany, the platform claims 180.000 users in its Scandinavian, German, Dutch and Belgian markets. Sysware has demonstrated aggressive practices, when its owner registered Skjusgruppen’s trademarks and similar domain names in 2009 (see IIS case 687) and GoMore’s in 2013 (IIS case 735), to redirect their users towards its own ridesharing platform.
Mobilsamåkning.se is a smaller-scale initiative existing in 13 cities, providing an IT system (accessed from computer or mobile phone) for local communities who self-define “security zones”, popular itineraries, and required stops. The app matches passengers and drivers who only have to confirm rides by SMS. Passengers pay an extra 5SEK/ride, additionally to the agreed upon price. From 2011 to 2015, 2248 rides have been shared with a total of 2985 passengers.
Hertz Freerider, since 2005, is a programme to enable Swedes to drive rental cars back to their original Hertz locations, for free. Hertz covers gas, tolls and bridge fees. The program counted 30.000 members in 2009. In October 2015, Hertz partnered with Skjutsgruppen to offer the empty places in rental cars driven by Freeriders for ridesharing.
UberPop was launched in Gothenburg and Stockholm in September 2014, and discontinued in May 2016, when about 30 drivers were sued for operating without a taxi license. Later in August 2016, 60 people have been caught for tax evasion after Uber gave them up to the Swedish authorities. Approximately 5.000 Swedes have at some point driven for UberPop. On-Demand taxi services UberX, UberBlack, UberLux are still operating in Stockholm, Gothenburg and Malmö. UberEats was also supposed to be launched in Sweden later this year. Uber’s commission is claimed to be 25%, but is around 33-50% in practice. For comparison, France has sued about 200 UberPop drivers.
Heetch launched in Sweden last summer 2016, after UberPop officially gave up the market. Heetch started in France in 2013, and its main difference with UberPop services is that it offers only night rides (i.e. 18:00–06:00 on Fridays/Saturdays). Drivers are limited to make 40.000SEK per year, from donations. Yes, Heetch only “suggest” a price donation which passengers follow or not, so there is no price tag. Yet, the Swedish police argues that this won’t be enough to escape tax authorities. There are around 30 Heetch drivers (Oct. 2016) in Sweden (30 000 in total and 500 000 users). Heetch takes a 12% commission. On Dec. 8. Heetch was also facing the French court and might be fined 300.000€, just as UberPoP was fined several times earlier this year too.
The Swedish Taxi Association (Svensk Taxiförbundet) represents 70% of the industry (9.000 vehicles). ShareFix (see below) has been their campaign for a stronger regulation of on-demand services, illegally competing with industry incumbents. ShareFix (see below) has been their campaign for a stronger regulation of on-demand services, illegally competing with industry incumbents.
RIDESHARING
In Sweden, ridesharing dates back to the late 70’s when colleagues or family members made ad-hoc arrangements to share commutes to work and education. But ridesharing practices have mainly been popularized during the past 5 years, thanks to ICT developments (social media, smartphones) and recent powerful online matchmaking platforms. Ridesharing, or liftsharing (UK) or carpooling (USA), is “adding additional passengers to a pre-existing trip. Such an arrangement provides additional transportation options for passengers while allowing drivers to fill otherwise empty seats in their vehicles” (Shared Use Mobility Center definition). Simply put, ridesharing is organized hitchhiking, with a high degree of organization complexity. A successful shared ride needs coordination regarding the trip itinerary, place and time of pick-up and drop-off, and so on. So “hitchhikers 2.0” use online platforms to interact and share rides with a network of other drivers and passengers. These platforms provide ridesharing opportunities for participants without regard to any previous historical involvements (e.g. strangers).
According to this definition, ridesharing does not cover taxis and chauffeured vehicles in which drivers make a special trip to carry a passenger. Transportation network companies (TNC) provide taxi services on very short notice (UberX) or en-route (UberPool, non-existing in Sweden) and enable drivers to make a profit. In such “ride-sourcing” or “ride-splitting” (respectively), drivers are for-hire, like traditional taxi services, but they use their personal, non-commercial vehicles. Therefore, these companies offer regular taxi services, but on-demand. Many have already voiced their concerns on the semantics of the “Sharing Economy” and criticized these companies (i.e. “Stop saying Uber is part of the Sharing Economy”; “Uber and Airbnb have nothing to do with the sharing economy”; “What Should the ‘Sharing Economy’ Really Be Called?”). In Sweden too, the Ridesharing Movement has argued similarly: “Restaurants are not picnic – taxi is not ridesharing.”
THE RECOMMENDATIONS
The Swedish commission actually follows this definition of ridesharing, distinguishing taxi services: “Ridesharing is based on the principle that the people who share a ride are going to the same place or in the same direction. When people travel to the same destination, or in the same direction, they have their own transportation needs, that is, the driver would have taken the trip even without the passenger, unlike taxi services where only the client that has a travel needs.” Furthermore, the report points out that “a new legislation on ridesharing should be based on the principle that the cost of a shared ride should be split between the individuals involved.” In short, nobody makes an economic profit in ridesharing. The cost can be shared unevenly (and there is nothing to prevent someone to offer one or more people a ride for free).
Looking at the overall Swedish picture, true ridesharing is very positive for society and should be promoted. However, when private persons drive other private persons around, they offer professional taxi services and this leads to more disadvantages. In short, Uber and Heetch are not ridesharing platforms, but taxi companies providing on-demand services to passengers that should be delivered by licensed drivers (although no form of employment is evoked). Importantly, drivers will not need the traditional taximeter (mandatory until now), but an app should be enough, which makes it easier for TNCs to recruit drivers in new markets, as long as they declare their revenues.
The report was written by Amy Rader Olsson, researcher at KTH Royal Institute of Technology (who has never taken a ride with Uber or UberPop). The commission proposes a progressive legislation:
1. No mandatory traditional taximeter. Instead, the commission proposes a “special equipment for taxi vehicles” which should be connected to the taxi company dispatching drivers, measuring distances, and collecting payments. Taxi companies must account of these rides to the tax authorities.
2. On-demand taxi service drivers who earn a profit from carrying passengers should own a license.
3. Ridesharing, where the trip's costs are shared between people with the same destination and the same itinerary, should not be defined as taxi traffic even if the persons concerned are not familiar with each other.
TNCs mislead people into roles entitled to responsibilities and existing regulations, without being duly informed so. For instance, their press releases announcing Uber’s “Ridesharing for everybody” or Heetch’s “Community-based ridesharing for real” is a derivative of #WeWashing (abusing of the words ridesharing and community). Uber and Heetch embed extractive business models into social interactions and commoditize individuals’ private resources that were previously outside of the market (personal cars, private time, etc.). Their so-called community of occasional drivers feels abandoned: “We were all tricked and we were all used. Why would you give someone a job if you know it would end up in a conviction in court?” (Sveriges Radio followed a few former UberPop drivers facing court). In contrast, the report highlights that the non-profit Ridesharing Movement has been promoting the best practices (i.e. the platform does not suggest prices) and societal impact (i.e. reduced CO2 emissions).
Eventually, the compensation of a shared ride is based on 18.5SEK/mil, or 0.18€/km (Income Tax Act 1999: 1229), which is 3 times more than in France where base cost is 0.06€/km (12 mars 2013, N° 11-21908). However, there are other expenses that could be included under the cost of a ride: car depreciation, car rental fees, SMS fees, platform commission, etc. Where is the limit? What are the implications for P2P car rentals and other sectors (i.e. accommodation)?
THE REACTIONS
There have been many reactions to the Swedish commission. As expected, Uber and Heetch complained a little. But mostly, it’s been a positive debate. The Infrastructure Minister herself was glad that “the difference between taxis and ridesharing is clarified.” The editor of the Swedish newspaper Dagens Industri Digital, sums up the situation as “both unsexy and brilliant at the same time”.
Anna Felländer, co-author of “Sharing Economy: Embracing Change with Caution” (2015), says that it will “lead the traditional dinosaurs to embrace the technological challenge”: the commission’s aim to lower the barriers of entry to the Swedish taxi industry, which is good for TNCs, and competitiveness in general.
The director of the Swedish Taxi Association (Claudio Skubla) has commented that “the taxi commission has well balanced most issues. It is especially good that the investigator emphasizes the principles of fair competition and good opportunities for tax control.”
The new Uber Sweden Manager (Martin Hedevåg) is “disappointed that it has not been more progressive” he says to Sveriges Radio, “what it means for society and our drivers is that one can not take advantage of ridesharing and the benefits it could give us on a large scale.”
Another directive has been issued (dir. 2015136) on the Swedish users in the collaborative economy, due in March 2017. This time, the investigation is led by researcher Karin Bradley (KTH), who has already authored a report proposing the collaborative economy as one of four scenarios for a sustainable growth. In 2016, 10% more Swedes have been active in she collaborative economy compared to 2015 (cf. TNS-Nordea study). Eventually, the European Court of Justice is to decide whether Uber is providing transportation services or digital services, which verdict will impact other sectors and businesses as well (i.e. Airbnb).
This post was originally published in the OuiShare Magazine (December 12, 2016), republished on World Streets (December 14, 2016), and translated in Spanish (January 18, 2017).
I’ve been asked several times what is the “Sharing Economy?”. I rather use the term collaborative economy to discuss the complex phenomena around private persons who exchange directly tangible resources (i.e. under-utilised high-value goods, i.e. car or “the power drill”) and intangible resources (excess money, skill, time, space, knowledge and information), in a global (online) or local contexts (grassroots communities). These peer-to-peer (P2P) exchanges are facilitated by online platforms who making things more convenient and cheaper than what traditional companies can. Yet, most people would only share in exchange of a fee (68% of 30.000 US consumers according to Nielsen 2014). Very often mentioned too, the potential value of the sharing economy sector estimated at $335 billion by 2025 (PWC 2014) from about $30 billion in 2015.
This post hints at several terms and definitions of the sharing or collaborative economy/consumption. It’s important to point out that the term “sharing economy” has been widely adopted to refer to the variety of online platforms and digital marketplaces facilitating new modes of consumption or production of economic activities; while the term “collaborative economy” conveys more emphasis on the principles of decentralization, open governance and communitarianism.
(Owyang 2014)
At the macro-economic level, the four underlying principles of collaborative consumption is a critical mass of users, idling or excess capacity of unused goods, belief in the common good, and social trust (The case for Collaborative Consumption). Michel Bauwens and others (2012) also identified two main societal drivers: community dynamics in conducting business, and the combined effect of digital reproduction and the increasingly 'socialized' production of value. Eventually, Rachel Botsman (2013) further argues that technological innovation, a shift from ownership to access, economic realities and environmental pressures are the disruptive features of this paradigm shift in society.
TERMS
There are many inter-related but not inter-changeable terms to the collaborative economy. We have seen plethora of definitions that differ in the scope of activities, or basis of exchange in focus:
collaborative consumption (Botsman and Rogers 2010),
the Mesh (Gansky, 2010),
commercial sharing systems (Lamberton and Rose, 2012),
access economy (Rifkin 2000), access-based consumption services (Bardhi and Eckhardt, 2012), pay-as-you-use economy (People Who Share 2015),
circular economy (Ghisellini et al. 2015; Gullstrand Embruing et al. 2016; McArthur 2015),
sustainable product-service systems (PSS) (Mont 2002; Tukker 2013), sustainable consumption and production (Tukker et al. 2008; Lensmann et al. 2013; Cohen & Muñoz 2016),
commons-based peer-production (Benkler 2004), P2P production (Bauwens 2006; Bauwens et al. 2012), FabLabs, Hackerspaces and the Makers movement (Blikstein & Krannich 2013; Moilanen 2012),
crowd economy (Owyang et al. 2014) or crowd-based capitalism (Sundararajan 2016), consumption collective network (Närvären et al. 2014),
wikinomics (Tapscott 2010), grassroots social innovation (Martin & Upham 2015; Martin et al. 2016), Local Exchange Trading Systems (Pacione 1997),
sharing of productive assets and governance (e.g. shared ownership, co-operatives, blockchain)
open education (e.g. crowdsourcing, Massive Open Online Courses)
DEFINITIONS
First definitions
The origins of the concept are dated back to the idea of profit sharing and two economists, Weitzman and Meade. In the book “The Share Economy” (1984), M. Weitzman (USA) argued that full employment and social welfare could be achieved if workers were paid a share of the firm revenues. Similarly, in 1989, “Different Forms of Share Economy” by J.E. Meade (British) also made the case for profit-sharing, which he already developed in his scientific paper “The Theory of Labour Managed Firms and of Profit Sharing” (1972). The first definition of ‘acts of collaborative consumption’ were “events in which one or more persons consume economic goods or services in the process of engaging in joint activities with one or more others” by Felson and Spaeth, back in 1978 (“Community Structure and Collaborative Consumption”).
Rachel Botsman
Rachel Botsman has updated her definition since her milestones book “What’s Mine Is Yours: The Rise of Collaborative Consumption”. She redefined the Collaborative Economy as slightly different from the Sharing Economy (2015):
- Collaborative Economy = “an economic system of decentralized networks and marketplaces that unlocks the value of underused assets by matching needs and haves, in ways that bypass traditional middlemen”
- Sharing Economy = “an economic system based on sharing underused assets or services, for free or for a fee, directly from individuals”
- Collaborative Consumption = “reinvention of traditional market behaviors— renting, lending, swapping, sharing, bartering, gifting—through technology, taking place in ways and on a scale not possible before the internet”.
The think tank OuiShare (2015) further adopts this perspective by defining collaborative consumption as “an economic model fostering access over ownership and reducing waste in which people leverage technology to share, swap, trade, rent, or give products and services on a new scale.” The European Parliament (2014) emphasis the digital aspect of the sharing economy in its definition as “a new socio-economic model that has taken off thanks to the technological revolution, with the internet connecting people through online platforms on which transactions involving goods and services can be conducted securely and transparently.” The EU Commission (2015) has defined the collaborative economy as “a complex ecosystem of on-demand services and temporary use of assets based on exchanges via online platforms.”
SO WHO ARE THESE PEOPLE WHO SHARE?
They are driven by:
the economic incentive
an urge to reduce the socio- environmental impact of consumption and a belief in “the commons”
a normative desires to satisfy altruistic needs and of community-belonging
Sometimes called “Neo-sharers” or “NOwners”, they represent a society that is rethinking what ownership means, considering access as a way of life, using services rather than products, mobile and connected (the “dot-com” generation) millennials, with a high level of education and mid-high income, most likely living in urban areas. These “proteins” as Rifkin (2000) called them, have a unique personality, they like to experiment new things, and they are innovative, playful and creative. Thus, sharing seems to be more a choice than a necessity. Filippova and others from OuiShare (2015) emphasise the term “homo cooperans” as people cooperate for their emancipation, autonomy, social justice, knowledge sharing and open production. most attitude reports predict an increase in participation, consumers of P2P services plan to share more in the future such as it is becoming mainstream.

DRIVERS
- One of the first US consumer survey pinpointed to mobile technology (85%), online community (78%), global recession or cost saving (67%) and environmental concern (60%) as individual drivers of sharing behavior (Shareable 2010).
- The main challenges of the sharing economy circle around trust issues, social proof, reputation and privacy concerns. A U.S. survey (2012) finds that 67% of 400 respondents ranked trust as the first barrier to sharing: 30% fear product theft or damage, 23% mistrust strangers, and 14% express privacy concerns.
- Another large consumer survey (2014) also ranks the following reasons for using a P2P sharing platform: convenience (73%), better price (55%) and quality (47%).
- PWC (2015) also lists affordability (86%), convenience and efficiency (83%), stronger community (78%), environmental friendliness (76%) and also fun (63%) as perceived benefits of sharing.
- Matofska (2015) reviewed all these consulting reports for Compare and Share and shows that the motivations and drivers for the sharing economy are money, sustainability, technology, community, convenience, better value, access lifestyle and curiosity.
You can see more of these slides at: The "Sharing” Economy - Is it really?.

Last week the Journal of Retailing and Consumer Services (Elsevier) sent the printed edition to its subscribers for January; it features the special section from the fourth Nordic Retail & Wholesale conference containing our article. More or less at the same time, the Swedish weekly industry newspapers Icanyheter and Market published a debate article about our experiment. Altogether I hope that this will increase readership among both academics and practitioners.
My basic idea was to reach store managers and retailers in Sweden, and share relevant research with them who want to benefit from the growing share of consumers willing to pay more for green groceries (30-40% higher according to various studies). However, in Sweden, those sales account for less than 5.6% market share (2015) so reducing this "green gap" can increase their store's benefits.
Eye tracking heat map from the experiment.
As explained earlier (see here), we wanted to know how retailers can attract shoppers’ visual attention to green products through in-store practices. Basically, neuromarketing research shows that consumers are more likely to choose a product that they look longer at. So we designed an eye-tracking experiment in a supermarket mock-up, inviting 66 participants to shop for four grocery products.
"Four ways to sell more green products" published in Market No. 48-49, 30 Nov. 2016 p.3 and online for subscribers (10.000).
Both Swedish articles are packaged to be more relevant to a professional readership, listing four retailing practices to influence shopper behavior towards green products:
1. signaling eco-friendly products with green-colored price tags. As the color green tends to indicate organic and natural characteristics, green price tags help shoppers to find the products they look for. In the experiment, shoppers who notice green price tags also paid more visual attention to green products, so they are more likely to purchase them.
2. proscribing greenwashing practices (such as products with misleading packaging) because it distracts and irritates shoppers. Indeed, "greenwashed products" (i.e. green-colored fabric softener, not environment-friendly) considerably reduced visual attention towards the true green products (i.e. pink-colored eco-labelled fabric softener). Because what stand on the packaging transfers attributes to its content, shoppers who notice a green-color packaging are duped into believing the product is green. Retailers should offer a genuinely green product assortment (i.e. organic produce, manufactured from fewer natural resources, or requiring less energy during usage).
3. disabusing of the "eco-servicescape" (i.e. communicating environmental consciousness through the various elements of the shopping environment) that lacks authenticity and trustworthiness. Participants commented in a post-experiment debrief that countryside or agriculture decorations "look fake," too artificial," or showed "no effort in convincing." Retailers should not distract consumers with irrelevant or visual information.
4. informing consumers inside the store through point-of-purchase (PoP) displays. In contrast with the results of the eco-servicescape, retailers can help shoppers to become more knowledgeable ("eco-literacy") about green products through small PoP displays in the shelves (e.g. descriptions of fair-trade and organic coffee characteristics). As shoppers make 82% of their purchase decisions inside the store, the display of relevant information about green products weighed more in the visual attention. In short, PoP displays inform and orient shoppers to look more at green products.
"Retail researchers: how supermarkets can influence green consumers" Icanyheter No. 47, 25 Nov. 2016 p.2 (61.000 readers).
This study confirms that retailers are the gatekeepers between a growing segment of green consumers with a high willingness to pay more, and a larger market share for green products. By increasing shoppers visual attention towards green products, retailers could increase their sales. One of the most important result of an eye-tracking experiment emphasises the retailers role in avoiding greenwashing practices, that are easily detected by "dark green" consumers who will boycott retailers with no clear assortment of genuinely green products.
I have been involved the Marketing courses for 1st and 2nd year students of the Civilekonomprogram at my division. Later on, some of these students choose to specialise in Marketing and we’ll meet again in other courses (e.g. Service Marketing, Advanced Consumer Marketing). Throughout my teaching, I tried to introduce contemporary problems in class, as well as fresh research to illustrate up-to-date methods and applications.
During the fall 2014 and fall 2015, I lectured about the basic precepts of Green Marketing or Sustainability Marketing. Particularly, we explored in class the concepts of sustainable innovations and green services. I presented the Green Marketing Innovation Framework (GMIF) which my colleagues and I developed at the department. We presented a paper at the AMA conference SERVSIG2014. In the course, six cases from the B2C and B2B markets were described to illustrate each of the six green marketing innovations:
Upcycling: transforming existing waste into a new product with a new purpose.
Redistribution of Resources: redistributing resources from people that do not need or use the given resources, to people that can make use of them.
Replacement of Technology: introducing a new technology into an existing product to reduce energy depletion, waste, harm to biodiversity,
Changing Customer Behavior: modify the behavior of a firm’s consumers so that they consume more responsibly and preserve the environment.
Products improving Nature: restoring/creating/expanding nature with innovative products.
Improving conditions for Nature: innovative services developed by companies aiming to “create” Nature (on step further than only reducing impact on nature).
I eventually led group seminars where students presented their own cases to further document the GMIF.
In Spring 2015, I lectured about collaborative consumption and particularly shared mobility (my slides on Car Sharing are available on Slideshare) The recent growth of P2P exchanges through online platforms enabling consumers to access mobility is a relevant phenomenon to explore. One particular case study was built around GoMore, a Danish platform facilitating three mobility services: ridesharing, car rentals, and leasing. I already presented the case at the 14th QUIS conference) The students were teamed to be consultants on particular marketing questions related to the market expansion to Sweden (e.g. Analysis of the direct competition; Market segmentation of the providers / consumers of car rentals / ridesharing; How to Increase platform activity and make members become active users). The Swedish market manager cancelled last-minute, but the students did a fantastic job getting data about potential users, their attitudes and expectations!
This fall 2016, I lectured the students about Marketing Research (slides). The course-book was set to be the Scandinavian (or Swedish) edition of the classic Kotler et al. Principles of Marketing; so I covered the concepts defined in the chapter. But most interestingly, I illustrated why research in marketing is critical in organizations. Information informs decisions, therefore marketing research! Moreover, the Internet and social media have improved the quantity and quality of data available on customer behavior.
Take Coca Cola for instance, their "New Coke" campaign in 1985 is a great case for the use of market insights in creating customer value. I also covered how Target uses purchase data from its female customers to taylor advertising very precisely, and Pizza Hut's Customer Relationship Management that developed a retention program . Marketing hoax like IKEA's Fartfull were mentioned too.
During the course, the students will have to analyze secondary data, as well as to collect primary data on their own. I presented them with basic facts on qualitative and quantitative research methods to orient their choice of methodology for their project. Interviews, surveys, ethnography and netnography, case studies, focus groups, and experiments were described with benefits and pitfalls. Finally I presented our eye tracking experiment and highlighted the managerial implications for retailers regarding price tags, in-store information, and greenwashing practices (as described in this post).
Basic Marketing is not easy to cover in four weeks. But we do our best to present the students with the fundamental principles, and interesting cases to spark their interest in marketing and sign up to more advanced courses. It is not possible to discuss everything - I always end up skipping 30% of the slides prepared!
My first article “You can't buy what you can't see: Retailer practices to increase the green premium” has been published (online) in the Journal of Retailing and Consumer Services (DOI 10.1016/j.jretconser.2016.07.008). The paper was initially presented at NRWC 2014 and this is part of a special issue including two other publications. This paper was co-authored with Lars Witell and Mikael Ottosson, my supervisors at Linköping University.
We observe that 77 percent of consumers state that they are willing to pay more for eco-friendly products, but in reality these sales account for less than 4 percent of market share worldwide, especially in food retailing. The reasons are known: consumers perceive eco-friendly products as ineffective, they judge the environmental attributes as not central to the product function, they place a stronger emphasis on the product price than on sustainability, and some consumers do not actually trust these environmental attributes to be true. However we also know that consumers make 82 percent of their purchase decisions inside the store. So in this paper, we argue that retailers play a key role in influencing consumers to buy eco-friendly products. Our study aim was to analyze how retailers can attract consumers’ visual attention and increase sales of eco-friendly products through in-store practices.
The paper is based on an eye-tracking experiment in a supermarket mock-up in which 66 participants were invited to shop for coffee and fabric softener. The experiment is described in my previous post here, as well as in this explanatory video used in various courses. Some of the statistical analyses used in the paper were also presented in a PhD course at the Institute of Analytical Sociology.
The study's conclusions indicate that retailers can affect consumers’ green shopping behavior by influencing their purchase intentions, through displaying relevant information, orienting them inside the store (such as signaling eco-friendly products with green price tags), and offering an eco-friendly product assortment.
With Point-of-Purchase information displays, consumers became more knowledgeable about the green products and compared them with other alternatives. We also found that the color green had a strong influence on consumer visual attention, because it tends to indicate organic and natural characteristics. As such, green price tags helped consumers find the eco-friendly products they sought. This finding also confirm that green is associated with eco-friendly products.
However, greenwashing practices, such as using the color green to lure consumers into buying a classic product, considerably reduced visual atten- tion towards the true eco-friendly products. Packaging implies product attributes to its content, and therefore, consumers who notice a green-colored packaging may be duped into believing its contents are actually eco-friendly, even when they are not. “Lighter green” consumers will spend less time comparing alternatives and base their purchase decision on price. Therefore, greenwashing practices distracted consumers who did not pay attention to eco-friendly products.
However, we expected that an eco-servicescape would impact the consumers’ attention towards eco-friendly products, but these results were insignificant. Probably due to the lack of authenticity of our experimental décor.
This study concludes that by increasing consumers' visual attention towards eco-friendly products, retailers could increase the green premium consumers paid. All in all, retailers can achieve greater sales and profits by increasing the retail space devoted to eco-friendly products.
SKJUTSGRUPPEN — The Ridesharing Movement in Sweden
This post is about Skjutsgruppen. The most popular platform for ridesharing in Sweden, but more importantly, the largest non-profit and grassroots movement promoting shared mobility!
Ok, ridesharing dates back to the 70’s in Sweden, but it only consisted of ad-hoc arrangements between colleagues or family members who drove each other to work and education. The past 3-5 years have witnessed an increased adoption of ridesharing, thanks to ICT developments (social media, smartphones) and recent powerful online match-making platforms.
Skjusgruppen is a non-profit “movement” with more than 60.000 participants in Sweden. The lift-group in Swedish, started as a Facebook group in 2007 to facilitate interactions between private individuals who wish to share a car for a trip. Today, more than 40.000 people still arrange shared-rides on Facebook, but Skjutsgruppen has it own platform with search functions and integrated maps since 2012 (with approximately 25.000 users in 2016). Since 2013, skjutsgruppen.nu was listed among the Top-100 best internet ideas in Sweden (cf. InternetWorld). In the Skjutskronika 2014, Skjutsgruppen reports 1.6 billion km shared in Sweden and yearly total savings are estimated at more than SEK8.6 million; which is a relatively high amount compared with the 5 billion kilometers shared on Blablacar in 18 countries.
SKJUTSGRUPPEN — The Ridesharing Movement
Skjutsgruppen's value proposition is Ridesharing with friends. “We call ourselves a civil society movement. None of our users are customers, we are all participants.” (Mattias Jägerskog, founder) This participatory culture is what makes Skjutsgruppen different from other sharing initiatives with spurious communities like Airbnb or Uber. About 100 volunteers are willing to help. “We as an organization, we are not the movement. We are helping the movement. The movement is the users. If they want to start something, if they want to collaborate with the local municipalities, etc… much like Wikipedia is doing it, like an organized distributed community. Very flat.” The wording is important, making clear what they do, rather than what they don’t do.
At Skjutsgruppen, the forefront of the collaborative economy in Sweden, the objective is to enable people to connect, in order to reduce the number of cars on the road, not to make money. Ridesharing includes “all forms of common environmentally friendly travel (bus, train, air balloons, cars, etc).” Mattias and a few other people with various backgrounds take care of the platform, communications, presentations, and so on. For instance, this presentation at Klimatseminariet in 2015.
From its beginnings on Facebook to what it is now, Skjutsgruppen has collaborated with more than 30 municipalities (who also contribute with funds), many events where people need to travel to (which yields positive word-of-mouth), but also with strategic partners like Hertz. A few milestones to remember are:
2008: 1st International Ridesharing Day in Örebro, Sweden. (see below)
2010: Icelandic volcano eruption. Many people who have their flights cancelled, see ridesharing as an alternative to travel within Europe (BlaBlaCar in France, greatly benefited too).
2011: The Facebook group and Facebook page are hacked. Skjutsgruppen leveraged its community (as well as the help of a lawyer), and crowd-funded SEK7500 to re-purchase the domain names.
2011: the movement became a non-profit organisation (ideell förening in Swedish) to be able to further pursue crowd-funding of SEK200.000.
2012: Skjutsgruppen did not have a platform for the first four years and relied exclusively on social media (i.e. Facebook, Twitter, CouchSurfing, LinkedIn, Bloggi). They crowd-sourced an online platform with free API (integrating trafiklab.se/api to show alternative public transportation options) and enabled an SMS service (in collaboration with SMSgrupp).
2013: Skjutsgruppen is awarded the Årets Initiativ (”initiative of the year”) prize for its significant role in changing Swedish society for the better at the Civil Society Gala.
2014: The total distance of shared rides is 1.6 billion kilometers in Sweden — yearly total savings estimated at more than SEK8.6 million; which is a relatively high amount compared with the 5 billion kilometers shared on BlaBlaCar in 18 countries.
2015: more than 300 local groups have been created on skjutsgruppen.nu.
2016: Prototypes of a mobile app were developed at the Smart Cities Green Hackathon in Stockholm. Two teams presented their work.
2016: Skjutsgruppen calls for funding SEK1.4 Million; to finance the full development of a mobile app and its maintenance (including an app developer), hire a developer/manager/treasurer (föreningsutvecklare), translate the website to English (“The Ridesharing Movement”), cover treasurer’s fees, office rent, and marketing the app launch.
This community engagement leads to another difference with other sharing platforms: Skjutsgruppen does not rely on a peer-review system to create trust between strangers. Neither drivers nor passengers can leave an online review after the trip. However, Skjutsgruppen shows the “Degrees of Separation” between the user and someone else by displaying the Facebook friends linking them both. It enables people to trust each other through acquaintances. Since Milgram’s small world experiment (1967), it is assumed that everyone on Earth can be connected to each other through six other persons or less. The degrees of separation between two strangers are actually 3.57 on Facebook (see Facebook). Moreover, all communications between users are public so that everybody can read it, thus making the platform transparent and the community trustworthy.
Skjutsgruppen is a community-backed initiative that does not take a commission when people arrange shared-rides through its platform. In practice, the passengers and the driver agree on a contribution (if any) for gas and tolls, and money is exchanged cash in the car or through Swish. At the contrary, the other ridesharing platforms in Sweden are for-profit organizations that charge a fee for each ride facilitated. Here are the most important ridesharing actors in Sweden:
- GoMore (2005) began as a ridesharing platform in Denmark as a non-profit organization (and became for-profit in 2011). Only entered the Swedish market in 2014. GoMore takes a 10% commission from the driver’s fixed price and has about 450.000 users in Scandinavia and Spain, and approximately 50.000 users in Sweden (Jan. 2016).
- Samåkning.se (2008), which requires a 12.5% fee from the passengers when booking online and claims 180.000 users in Scandinavia, Germany, the Netherlands and Belgium. Owned by Sysware GMBH, a German organization with aggressive practices. Sysware registered Skjusgruppen’s and GoMore’s trademarks and purchased the Swedish domain names skjutsgruppen.se -.com and -.net in 2009 (see IIS case 687), and gomore.se and go-more.se in 2013 (see IIS case 735), to redirect their users towards its own ridesharing platform.
- Mobilsamåkning.se exists in 13 cities (started in Tolg) providing an IT system (accessed from computer or mobile phone) for local communities who self-define “security zones”, popular itineraries, and required stops. The app matches passengers and drivers who only have to confirm rides by SMS. Passengers pay an extra 5SEK/ride, additionally to the agreed upon price. From 2011 to 2015, 2248 rides have been shared with a total of 2985 passengers.
- Hertz Freerider (2005). Rental cars can be driven back to their original locations for free. Hertz covers gas, tolls and bridge fees. The program counted 30.000 members in 2009. In October 2015, Hertz partnered with Skjutsgruppen to offer the empty places in rental cars driven by Freeriders for ridesharing.
- UberPop (2014). Stopped in May 2016 (30 drivers have been sued for breaking the law by driving without taxi permits). That is exactly what UberPop is: an app providing a taxi service. Later in August, 54 people have been caught on tax evasion after Uber gave them up to authorities. 5,000 drivers have at some point driven. Other On-Demand taxi services UberX, UberBlack, UberLux (which is NOT ridesharing either, but ridesourcing) are still operating in large cities (Stockholm, Göteborg, Malmö). Uber takes between 25% and 40% commission.
Eventually, Skjutsgruppen aims to create an open-source platform in the future. This is far away from the business models used by other platforms involved with shared mobility. Over time, although limited in monetary funds, Skjutsgruppen has managed to nurture a community that exists on its own and developped into a collaborative movement aiming to reduce the environmental impact of traveling.
#RIDESHARINGDAY
The first International Ridesharing Day, back in 2007, happened in Örebrö, where Skjutsgruppen distributed candies on public transportation services. Since then, every year in October, ridesharing is celebrated worldwide! In 2013, events took place in England, France, Germany, Mexico, Benelux and even the US (See the cover story here). Traditionally, 1000 kanelbullars are also distributed on the streets and panel discussions are held in various places in Göteborg where Skjutsgruppen is very present.
This year, the 9th edition of the Ridesharing Day coincides with the Autonomy conference in Paris, a 4 days conference (co-organized by OuiShare) to gather citizens, policy makers, researchers, city planners, entrepreneurs, and lead the way to shared progress regarding the future of mobility and autonomous vehicles. To this occasion, Mattias will present "Sharing more than a ride - mobility as a common" at the conference.
Meanwhile in Sweden, I’ll be also be celebrating the #RidesharingDay with a classic Fika in Linköping, where I’ll give a short talk about my ongoing research on the current context for ridesharing in Europe.
QUIS14 – Platform Business Models: A Case from Mobility Services
The 14th International Research Symposium on Service Excellence in Management (QUIS14) gathered more than 300 academics at CEIBS in Shanghai last weekend. This year, the theme was Collaborative Innovations in the Network Environment. That was the perfect time to present my first study on Collaborative Consumption. With my co-author, I presented our paper “Platform Business Models: A Case from Mobility Services”.
Today, products and services are swapped, redistributed, sold, shared, lent, rented, borrowed, gifted, or consumed among two or more individuals. Networks of connected individuals and communities produce and consume collaboratively through P2P networks that allow for scalability, access to more resources, more convenience (closer and faster) and at lower costs. In this sharing economy, people share everything to save or make money. Ride-sharing (e.g. Blablacar), crowd-funding (e.g. Kickstarter), accommodation-renting (e.g. Airbnb) and other types of P2P exchange are facilitated by online platforms that match demand with supply (see below some of these start ups in present in China). Among the 200 papers presented at QUIS14, 7 focused on the sharing economy (although there was no specific session).
In our paper, we use the Service Logic to look at these organizations that enable users to co-create value by sharing underutilized resource (either tangible: high-value goods; or intangible: knowledge, money, skill, time, space) and cut down the marginal cost of service provision.
While some of these organizations are public initiatives or small cooperatives, others develop platform business models capitalizing on existing communities and enhancing their P2P matchmaking services in exchange of a transaction fixed fee or a commission. Most of the collaborative consumption platforms charge their users at pro-rata (membership pricing being more frequent for B2C services rather than for P2P services). These for-profit platforms become marketplaces where consumers can find a supplier.
Therefore, the more network users, the more valuable the platform, and the better services can be provided. However, the platform value proposition actually depends on a critical mass of users. This “chicken-and-egg” problem facing most sharing economy start-ups, exist because: (1) the consumer will consider the price to access the desired good or service and the number of adequate offers on the platform; (2) while the supplier/provider will consider the quantity of the demand, the additional services enabled by the platform, and the cost of matchmaking.
Our paper is based on case study of shared mobility services: GoMore, an organization which started as a non-profit ridesharing website in 2005 and developed as a holistic transportation solution by offering P2P car rentals and leasing services since 2014.
Three mobility needs can be identified. The figure below illustrates how they can be differentiated on four criteria that influence what transportation a user will adopt: frequency, duration, spontaneity and need of hauling. Additionally, users have a need of financial compensation on their underutilized resource: their empty seats during a trip or their car when it idles. Thus, there are specific resource gaps and need criteria that can be matched to co-create value. GoMore offers a relevant value proposition for each of its users’ needs.
The Ridesharing Service 1 offers partial access to mobility through the optimization of underutilized resources, empty seats. The P2P Car Rental Service 2 offers temporary access to mobility through the optimization of underutilized resources, idling cars. The Leasing Service 3 offers total access to mobility by providing users with a vehicle: this offers the benefits of owning a car. The resource gap, Mobility need 3, which after being matched with Service 3 could extend to another resource gap, Capitalization need 4, which in turn can be matched with Service 1 and/or Service 2.
Moreover, GoMore engineered its platform to provide the user with the necessary convenience to adopt and use these services. ICT developments such as allowing users to personalize their demand or offer, a mobile app facilitating direct communication and GPS localization for on-demand mobility needs. Additionally, trust in other users is supported by a peer review system, cashless and secured online payments, customer support, and a validation process for rentals.
This conference paper has been published in the QUIS14 proceedings "Accelerate the Impact of Service Research" (ISBN 978-0-692-46156-3).
As I currently study ridesharing services, I wanted to explore the user’s perspective and investigate the experience from the inside. I’ve already used Blablacar before (my profile), the leading ridesharing platform in Europe (wikipedia). But I would like to collect first-hand and up-to-date qualitative data. I wanted (1) to see if there were differences between different countries’ ridesharing communities; (2) to understand why people choose to share rides; (3) what convinced them to travel with me among others; (4) what are their good and bad experiences as Blablacar users, either as drivers or as passengers.
I offered the empty seats from my old Renault Scenic 97 to other Blablacar users for two road trips throughout Germany, Belgium, France and Sweden. Prior, during and after this 2500km ridesharing experience, I took notes and reflected on what was happening. I interacted with my passengers, using the Critical Incident Technique as well as collected more detailed data from a survey.
This post gives an ethnographic account of my reflections on the ridesharing organisation through Blablacar and the actual sharing of my road trip with strangers.
Step 1: Planning
Blablacar allowed me to plan my trip with 14 passengers for my two journeys. First, from Rostock, Germany (where the Swedish ferry dropped me off) to Paris, France. Second, the way back to Sweden (with only one seat available — too much souvenirs!). Two users booked for an additional passenger, two cancelled a few hours before the ride and one did not show up.
I also proposed my rides in Sweden on Skjutsgruppen (free), Samåkning.se (12% service fee) and Gomore.se (10% service fee) but no one reserved a seat. I am afraid the community is yet to grow and reach a critical mass of users.
My rides on Blablacar had the following attributes:
Cheap. I benchmarked the average price per trip to offer my rides 2-5€ cheaper (-20%).
I offer 3 seats (to allow more space to all passengers), pushed to 4 seats when demanded on Ride 1. Only 1 seat offered on Ride 2.
Payment:
Ride 1 was split into 4 distinct journeys to give me enough flexibility with itinerary (Blablacar limits the number of waypoints) and time (Blablacar decides on an approximate departure time throughout the stops). Initially these 4 rides had to be reserved by internal message but online registration was enabled later on for Essen-Brussels-Paris but unused.
Ride 2 from Paris to Linköping was offered Blablacar’s online registration system, with a “Manual Acceptation” (guaranteed by me within 3h). The online registration is only available for rides in France (except for European cities close to French borders) and longer than 75km.
Car cleaned. Water and snacks available. Music on request. Stretching breaks every 2h if no passenger to meet before.
While I was preparing the trip with my passengers, I have noticed a few things:
Flexibility. When planning their trip, most passengers were not flexible on their time frame, they expected a professional transportation service to be delivered on time (no delay allowed). Some passengers also asked for big detours from my itinerary (>30mn). Eventually, people do not book a long time in advance (less than a week). Weekends see peak activity.
Monetary exchange. Users might feel that exchanging money (to share gas and car fares) makes them consumers. A payment changes the role of driver and passenger to simply that of service provider and consumer. My passengers preferred to pay cash rather than online. Maybe it's for anti-capitalistic and pro-social reasons, or because they know Blablacar’s commission and want to bypass it to pay less, or simply because most were new on the platform and did not know how to proceed.
Communication. Most users did not read the trip description before contacting me. Even more if it is in a foreign language. One user expected quick answers, communicating with an authoritative language. I was frustrated when someone initiated a conversation, but stopped answering me after a few messages. The fact of conversing online makes people more superficial and less polite than IRL (in real life). People also expected me to speak the language of the country crossed.
Planning these rides and interacting with other users took a considerable amount of time. Even though Blablacar matching service removes some of the hassle, organising such long journey is demanding. The driver has a lot to take into consideration to plan and keep the ridesharing service as described to the passengers.
Step 2: Driving
Ride 1 lasted 16h with no real breaks except for picking-up and dropping-off my 9 passengers. Ride 2 lasted 22h (including the 7h ferry). That gave me a lot of discussion time!
Here is what I’ve noted:
Flexibility. Contrary to during the planning phase of the trip, my passengers were flexible regarding meeting time and place, while remaining easily reachable by phone. Some complained about me being late (although I gave a 1h30 notice) and worried I would not show up.
Meeting points. Germans seem to be used to meet at train stations: “Everybody know where the Haustbanhof is”. Frenchies meet more often outside of cities, closer to highways and at dedicated carsharing areas (e.g. Paris is a complicated city to organise rides, it takes 1h30 to cross by metro, so people meet on the outskirts, alongside the ring).
Sociability.
One passenger showed a slight reluctance to sit at the front (and let another passenger do it). That person wanted a back seat in order to read a book. It was only an hour drive and we talked, so there was not much reading done, but the intention remained.
Another passenger opened up an iPad and was listening to music on headphones. The ride was about 3h long and that person ended up falling asleep for part of the journey.
Two passengers who knew each other conspicuously laughed at the back, not sharing their jokes. They also watched videos for the major part of the one-hour trip. No discussion at all.
Another French couple decided to sit at the back together, as in a taxi, for a 3h ride. They probably felt like I was getting paid to drive them were they wanted. They made me drop them somewhere that suited them, not on my itinerary (30mn detour).
Navigation. I did not have a navigation system (nor a roaming smartphone), but I had an atlas and printed-maps from Google. Crossing four countries and entering city centres without a GPS can be a hassle when one doesn’t know the city. On the other hand, when we came upon difficult situation, we helped each other: people lent their phone to guide me, others looked on the maps to find the best itinerary.
Reputation. Most novice passengers chose me because of my high reputation profile. My reviews (even though in French and 3 years old) assured “I was a nice person and I could not have become an ass”.
Trust and Safety. My passengers appreciate that I was responsive on Blablacar, displayed a profile picture, wrote a short profile description and completed my ride preferences. Most women are afraid of traveling alone, even more with men. Blablacar proposes a “ladies only” feature but sad behaviours happened. The car model also matters (I had a picture displayed). One user said that extra attention was paid to the safety of the car before and during the ride.
Comfort. During my rides, I planned for 30mn breaks here and there. These breaks disappeared (if I wanted to be on time) because driving in city centres takes long time (traffic), meeting people, etc. It is important to take that into consideration for long journey. Sharing snacks is also common practice among long-distance riders.
Music. Music says a lot about a person. I often asked what do people listen to. A MP3 jack is a social plus to exchange music during a ride. I also have a bunch of old "mixl” CDs with 90’s and 00’s hits. It made me and my passengers travel back in time. It highlighted our common cultural background, sort of an identity we could relate to.
No-Show. Without online registration system, I have no guarantee that the passengers will show-up at the meeting point, I have to trust the users. One person failed me. I expected it. That user had only very bad reviews (3), didn’t reply to my messages on Blablacar a few days before, didn’t reply to my text(s) in the morning, didn’t reply to my calls when I was waiting. I left a bad review myself. No apologies since.
I’ve a learned a lot. Both while organizing my trip, and during the actual driving with these people.
I felt the tension between two aspects of ridesharing: one driven by convenience, technology and economic reasons; and one more authentic sharing philosophy, close to gift giving, not driven by monetary profits and strongly relying on the social aspect of communities. As most of my passengers were beginners (first or second ride), I felt like an advocate of ridesharing. I gave my perception of what it means to share a journey for me, I told a few god and bad stories. This enabled me to kick discussions into what ridesharing means to my passengers and so on.
The main motivation for people to use ridesharing was the economic incentive. Trains were too expensive compared to my discounted rides. One passenger said people signed up to Blablacar.de (last month, Blablacar acquired carpooling.com or mitfahrgelegenheit.de in Germany) as there is no commission, whereas mitfahrzentrale.de started to collect a fee recently. Paradoxically, that person gave me 5€ instead of 4€. Another didn’t figure out how to book online (”too complicated”) when it was proposed.
I also discovered that in Germany, Carpooling.com is also used for sharing train tickets. One person buys a group ticket, posts when/where he is going, and up to three other people can tag along and share the cost of the group ticket. “It’s about the same price as a shared car ride, but more ecologically-friendly”.
I remarked that traveling as a group (e.g. two persons) makes people less inclined to initiate discussions. They are not a stranger to everybody, they k now at least one other person. They don’t “need” to be social. There is no reciprocity. They secretly hope that their friend will do the talking so that they can take a nap on the back seats...
Good listening skills were shown during my rides. People were asking the right questions to start new discussions, and I believe this is an important skill when people travel with strangers. Silent rides can be awkward.
I gave good reviews to everybody on the next day. I was disappointed that all my reviews were 3 years old, although I traveled 3-4 times / year since 2012 and I always left reviews. Other people did not do it. There should be a better incentive than a reminder email (at least for beginners). Experienced users mentioned that the rating system could be more precise (e.g. Airbnb) with cleanliness of the car, driving skills, kindness, breaks, etc.
My passengers also agreed to fill-in an extensive survey (ca. 30mn) which I have yet to analyse. It took them a good half-hour, but allowed me to launch discussions on their experience on Blablacar and their ridesharing expectations.
The last few months, I have been reading a lot about ridesharing. I have also been lecturing about car sharing and other shared mobility services to undergraduate students. I am now designing a study on ridesharing for my PhD project on service marketing. This post tells what I’ve learned so far from my own experience with the subject and what I believe means ridesharing.
Hitting the road
The summer after high-school, four friends and I wanted to celebrate our diplomas with vacations. We decided to spend July 2008 in Spain. As I recently obtained the driver’s licence and my parents allowed to borrow their Renault Scenic 1997, I proposed that we do the trip by car. That was my first road trip with four people across France and to Spain. Litters of coffee, many cookies and several music “Mix” on CDs were prepared. I shared the driving with one other friend and we made the 1500km in less than 24h. We all talked, sing and laugh hard, entertaining ourselves during this long trip!
For the summer 2009, three of us spent a month in South and Eastern Europe, with the InterRail pass. We hitchhiked in Coatia and Bulgaria, with three heavy bagpacks. This motivated me to travel again through Europe in July 2010. Another friend and I hitchhiked from our hometown in Brittany, France to Bern, Switzerland, to Roma, Italy. When the train was too expansive or unpractical, we hitchhiked (e.g. in Montenegro, Serbia, Croatia). We met wonderful people! Locals, tourists, and even police officers gave us rides. We traveled fast. We chose strategic points to lift our thumbs, with our main direction on a pizza box and our best smiles shining off! Not everything was great all the time: some people drove dangerously, some people left us in forbidden places (where the police end up driving you to the nearest train station), some asked for much more than gas money and some were just awkwardly silent for hours. We also received local food, touristic addresses and travel tips.
Then I drove my Scenic to Sweden in September 2010, stopping all along the way for a few days, sleeping in my car at night. For the way back to France in June 2011, my brother joined me for a 10 days road trip through Denmark, Germany, The Netherlands and Belgium. We slept in the car and visited Erasmus friends I’ve just met in Sweden.
Ridesharing
“Ridesharing refers to a mode of transportation in which individual travellers share a vehicle for a trip and split travel costs such as gas, toll, and parking fees with others that have similar itineraries and time schedules. Conceptually, ridesharing is a system that can combine the flexibility and speed of private cars with the reduced cost of fixed-line systems, at the expense of convenience.” (Furuhata et al. 2013, p.28).
Also called liftsharing in the UK, or carpooling in the US, ridesharing is when a driver offers his/her empty car seats to people who need a ride for a part or the entire trip. Because of its on-demand nature, ridesharing has a high degree of organization: a successful shared-ride needs coordination the trip itinerary, place and time of pick-up and drop-off. Dynamic or real-time ridesharing refers to an automatic ride-matching process between participants on very short notice or even en-route. It can include small detours, but it does not concern taxis and chauffeured vehicles in which a driver makes a special trip to carry a passenger (e.g. Uber, Lyft who provide a ridesourcing service).
Service providers like Blablacar in Europe, offer to organize ridesharing for individual travellers through online matching platforms, with convenient app for mobile phones. Ridesharing enables people to raise their car occupancy (from 1.7 to 2.8 passengers), save money and reduce traffic congestion.
Blablacar
I signed up to covoiturage.fr during the summer 2011, to share the costs of my trips throughout Brittany, France. Even though I permanently moved to Sweden afterwards, I continued to use the platform when I was coming back to France. Every ride reminded me of my previous road trips. There was a strong social aspect to it. I shared my trips with commuters and long-distance travellers. I met great people who share some sort of ridesharing philosophy: most were young, they wanted to be cheap and meet people, and they wanted to reduce the environmental impact of their travels. Often they told their life stories, we had great discussions and I experienced unique moments. But it requires a great amount of trust to share a ride with strangers. Sort of like hitchhiking, but organized through Facebook. Covoiturage.fr provided a reputation system so that users could peer-review each other. Social trust is the fundamental factor of this whole new sharing economy.
Between 2012 and 2013, covoiturage.fr changed its business model and became Blablacar. They “forced” an online registration system taking a 10% commission on each ride. This guarantees payment to the driver with a cancelation policy to get refund for the passengers. Even though Blablacar expands fast, this pay-in-advance system is only available for rides in France longer than 75km. With this change of business model, direct contact (exchange of emails, phone numbers) between users became impossible and forbidden, and the price rose to take into consideration the driver’s car depreciation. As a result, some say the ridesharing culture died.
Until now in 2015, I have also noticed that the social aspect of ridesharing in France fell off (passengers listen to music, sleep, claim reserved seats and even watch movies) and the economic aspect reversed (less flexibility with booking and pricing). Ridesharing has become mainstream: Blablacar has about 20 million users! Users raised their expectations of each other. They assimilate ridesharing to a professional service, while it is still a peer-to-peer service. Hailing service companies like Uber, Lyft or Sidecar which are misusing the terms “ridesharing” and “community” in their communication dilutes the original ridesharing movement. The ‘true sharing’ movement raises awareness of this loss of communities to the profits of “Big Sharing” companies.
Ridesharing today
In May 2015, I have the opportunity to travel to France with my old Scenic for one last road trip. I will attend the OuiShare Fest 2015 in Paris. I set off to offer my empty seats to travellers throughout Germany, Belgium and France on Blablacar. I want to meet the current platform members and explore the two aspects of ridesharing: one driven by convenience, technology and economic reasons; and one more authentic sharing philosophy, close to gift giving, not driven by monetary profits and strongly relying on the social aspect of communities.
I designed a ridesharing survey for my passengers to fill out (if they accept). I will meet about 10 passengers while driving from Rostock, Germany to Paris, France: a 1100km trip (11h without breaks). I’ll share my impressions afterwards...if the car holds on!
I was asked to prepare a presentation/workshop on Social Media for my division of Business Administration at LiU. I based it on some articles (academic and magazines), blogposts, etc. as well as my own experience. I introduced Twitter, Academia.edu, Research Gate, LinkedIn, Google Scholar, Slideshare, Facebook, blogging, videos and podcast. I uploaded the slides on Slideshare (Social media for Academics) but in a nutshell, here is what to remember...
Social media are Internet-based platforms relying on “Web 2.0” technologies, that enable users to create, share and exchange content, information and ideas. At first glance, academia and social media might not appear to have an obvious connection: it is viewed as frivolous or undertaken for personal reasons only, such as keeping in touch with friends or family. Yet my own university encourages us to use social media to engage with the public and to disseminate research more widely.
Harnessing the power of social media can be a great advantage for academics. It can facilitate connection and sharing of material and thus contribute to 'old-school’ ideals of scholarly community and exchange of ideas. It can remove the static element from research allowing it to happen in real-time.
Nice-to-have tools, not need-to-have. Academics can choose to ignore the networking trend as well...
Reasons for using Social Media:
• connecting and establishing networks with other academics, but also opinion leaders, the popular press, and firms
• keeping up-to-date with research topics and colleagues’ work
• discovering new ideas or publications
• promoting current research, becoming more discoverable
• promoting openness and sharing of information
• keep track of papers’ views/downloads (different from citations)
• getting feedback (how many retweets for this thought? how many views on this blog post?)
• giving support on a problem
• soliciting advice from peers
• making new research contacts
• collaborating with other researchers
• maintain a professional image
• recruit highly qualified personnel, like graduate students
5 Truths about Social Media in Academia (Hofeditz, 2015):
Social media is no option: This may sound harsh and is obviously provocative, but if your goal as a researcher is to publish and share your ideas. Why wouldn't you then consider self-publishing in social media? Do you fear that your content isn't strong enough? Do you fear that you make a grammer or spelling mistake? Do you fear the extra work-load? What is it that hinders you to publish in social media?
There is no perfect channel, just go for all: Twitter is like a marketplace everyone shouting out, you wanna be there, listen, shout out, ask and answer. A blog allows you to brand your own thoughts with 1000-2000 words. Researchgate or academia.edu helps you self-archive your publications and follow other researchers. Use Slideshare to self-archive your research presentations and spread them. Facebook and Linkedin are the biggest and most developed social media places.
Our role is already to create and share knowledge: You teach, moderate, observe, analyse and write. Why don't you go digital with it? Scaling is free. Especially for young scholars, social media bears the opportunity to enter closed research communities, that you might have no chance to enter before.
Take back control of your unique online presence: The internet is large and how may you possibly be able to create something that distinguishes itself; because you are unique.
Nobody pays us for social media, yet! It should be recognized as part of the job and as such included into the working profile and paid accordingly in order to avoid an imbalance of life and work.
Reasons for not using Social Media (Luton, 2014):
being viewed negatively by other academics
time pressures
social media use as an obligation
becoming a target of attack
too much self-promotion by others
possible plagiarism of ideas
commercialisation of content
privacy & copyright
There are a lot of guides for each social network, just Google it! If you’re already out there, do not hesitate to share with your colleagues ;)
NRWC2014: "Closing the Green Gap: What can the retailer do inside the store?"
The 4th Nordic Retail and Wholesale Conference (NRWC) took place on 4-6 November at Stockholm School of Economics ("Handelshögskolan"). It was hosted by the Center For Retailing (CFR) at Handels. The owner of the conference was the Nordic Retail and Wholesale Association (NRWA), a Scandinavian retail research network started by "Handels Utvecklingsråd" (HUR) and "Hakon Swenson Stiftelsen". There were about 100 participants, for 68 extended abstracts (12 full papers submitted); as well as two keynote speakers: Ann Carlsson (CEO of Apoteket) and Praveen Kopalle (ass. editor of Journal of Retailing and Journal of Consumer Research).
I really enjoyed the friendly atmosphere among Nordic academics, as well as how CFR organised everything smoothly. There also was an inaugural Doctoral Colloquium for the PhD students, which turned out to be really useful to learn from senior researchers but also network with other doc students. The best was that all PhD candidates participating at the colloquium had the opportunity to chair one of the conference sessions. We also met Praveen Kopalle for an informal but very insightful chat about his own academic experience and current marketing research opportunities.
NRWC2014 had 3x3 parallel sessions per day, with Digitalisation and Corporate Social Responsibility (CSR) as the biggest retail research issues. There is a lot of interesting studies going on at other universities, which could contribute to my own project on green marketing and consumer behavior:
Ethical consumption apps (ShopGun, GrönGuiden, FairTradeApp, and others, ...) help consumers to get information in-store (barcode scanners) to make informed purchases, share their ethical choices/behavior on social networks, geo-localise ethical/fair shops, and it creates a new routine of sustainable consumption.
Sustainability is the second consumer motive for wellness consumption.
Internal CSR is not a common practice: e.g. Clas Ohlsson employees do not think sustainability is a key issue, even though there is a Code of Conduct at the Corporate level. But consumers want facts, transparency, store involvement (stories, examples).
The sustainability trade-offs at the corporate-strategy level should be more investigated.
Climate-friendly food choices (= low GHG emissions) can be increased by communication in weekly store-flyers.
Food waste from retailers is a common practice, but there is a lack of understanding of its underlying aspects (e.g. expire date, overproduction, redistribution, etc).
I also presented my paper co-authored with Mikael Ottosson and Lars Witell: "Closing the Green Gap: What can the retailer do inside the store?"
I explained the Green Gap, (i.e. consumers do have a high concern for the environment but a de facto low green shopping behavior), and I briefly detailed the experiment, before presenting the results in length.
The next NRWC2016 will take place at Aarhus University, Denmark. Until then, thanks to the conference chairs at CFR, Handels: Fredrik Lange (chair), Sara Rosengren (co-chair) and Jens Nordfält (co-chair).
Last year, I conducted an Eye Tracking experiment at Linköping University. We used eye tracking technology to gather cognitive data on green consumer behavior. This research method has already proved its efficacy for marketers.
Eye Tracking is a very useful technology for marketing studies. It provides findings that questionnaires, purchase data, focus groups or case studies cannot. Eye tracking enables researchers to analyze people’s visual attention reflected in their pattern of eye movements (saccades and fixations), also called ‘gaze’, point of regard’ or ‘scapath’. More technically, optical tracking cameras record the pupil center location and the infrared light corneal reflection to measure the orientation (distance and angle) of the eyes in a visual environment.
The Eye Tracking technology can be applied in various field:
neuroscience (attention, brain structure);
psychology (reading, scene perception, visual search, natural tasks, auditory processing and other information processing tasks);
human factors (aviation, driving, visual inspection, sports);
computer science (interactive system);
ergonomics (design),
ophtalmology, etc.
Here are a few interesting findings for marketers in Retail, Advertising, and Online marketing.
I. RETAIL
- Looking at a brand increased its consideration probability by 30 to 120%.
- Less-known brands attract more visual attention. The practice of allocating shelf space according to market share is not optimal.
Packaging Design Features that impact visual attention:
- contour/shape (high slim product draw consumers’ initial attention better)
- high contrast (products that stand out)
- graphic design (easy to interpret)
- text element (negative influence on consumers’ initial attention)
Under High Time-Pressure
- Consumers accelerate information acquisition (= shorter fixations). They filter information by skipping text (rather than images) on product packaging.
- Consumers adopt a processing-by-attribute strategy (= increase in saccades between brands).
Under High Motivation
- Consumers slow-down information acquisition (= longer fixations). Consumers skip more pictorial objects ( rather than brand names.
Food Label
- Practiced label reader find a logo more quickly and accurately than did less-practiced readers.
- Label size did not have a significant effect.
- Thinner (compared to thicker) anchoring lines help consumers to find label faster (= reduced visual search time).
Labels Design
Better text positioning, clearer background, and more consistent font for a generic drug label was found to improve reading (= shorter fixations).
II. PRINT ADS
In the Yellow pages catalogue, consumers spent 54% more time viewing ads for businesses that they ended up choosing, which demonstrates the importance of visual attention for subsequent choice behaviour. In general, the larger the ad, the more likely consumers were to notice it. Ad position also matters because people non-exhaustively scanned a page in alphabetic order; as a result, people never read some ads.
The amount of attention paid to an ad decreases by about 50% from exposure 1 to exposure 3: the attentional process accelerates during later exposures.
Decreasing the size of the pictorial, and increasing the sizes of promotion (price elements in particular) attract more attention to the entire ad display.
Text vs Pictorial information
- Consumers pay three times more attention to text than pictures.
- Attention durations differ significantly across ad elements: longest for the text, followed by headline, and shortest for the pictorial and the packshot.
- Most inter-element saccades start from or end on the packshot.
Color and graphics
Color ads are scanned more quickly, more often, and longer than black and white ads. However, unlike color, graphics doesn't capture initial consumer attention.
Scanpath:
- Participants quickly scan an ad before attending to it in detail.
- Consumers look first at the headline followed by the pictorial, the text, and finally the packshot. After the initial visual scan of the ad, half of the attention is directed at the bodytext.
- The brand object most effectively transfers attention to the other elements. Little or no transfer from the pictorial to brand and text.
- Brand familiarity reduces attention to the brand but increase attention to the text.
- The center of ads are fixated much more frequently (= longer gaze durations).
Information processing and Memory
- Relatively to the ad elements size (the brand is 10x smaller than the pictorial and 5x smaller than the text), the brand receive more fixations on its surface, followed by the text. Only increasing in the text surface size produces a net gain in attention to an ad as a whole.
- It is assumed that the number of fixations, not their duration, is related to the amount of information a consumer extracts from an ad.
- The more visual attention, the better brand recall.
- Ads that are both original and familiar attract the largest amount of attention and also promote brand memory directly.
- Fixations to the pictorial and the brand systematically promote accurate brand memory, but text fixations do not.
- Ads that are viewed favorably are often not identified by brand name; but by aspect of the pictorial information or by a generic product label.
III. ONLINE MARKETING
Online Search
- Traditionally, there is a "Golden Triangle" scanning behaviour on Google searches. Although Google updates its algorithm: comparing eye-tracking data from 2005 to data from 2014, the Golden Triangle has now a F shape.
- In details, they read the first search hits horizontally, usually across the upper part of the content area. Next, they move down the page a bit and then read across in a second horizontal movement that typically covers a shorter area than the previous movement. This additional element forms the F's 2 bars. They ignore sponsors’ links in the right column. Finally, users scan the content's left side in a vertical movement. This last element forms the F's stem.
- Users spent 2s. browsing through results before clicking in 2005, compared to only 1.17s. in 2014.
- The top “Organic Listings” still capture the most click activity (32.8%). But they are no longer always in the top-left corner (e.g. sponsored ads) so users look elsewhere. Moreover, lower-level, first page results capture more clicks than before.
- Experts appear to be more efficient and systematic (= regular scan path) in their visual exploration.
Ad Blindness: Almost no fixations within advertisements.
- Users process ad banners peripherally (not focused attention). They also know the usual location and size of ads so they easily ignore them, without active avoidance taking place.
- While navigating on a webpage: if users are looking for a quick fact, they want to get it done and are not diverted by banners; and if users are engrossed in a story, they are not going to look away from the content.
- Users don't fixate within design elements that resemble ads.
- 3 design elements attracting the users’ gaze: Plain text; Faces; Cleavage and other private body parts.
Website Navigation:
- Readers fixate first in the upper left of the page (generally around the site’s flag or logo). They explore the rest of the top of the page (left-right movements) before looking further down the page.
- On average, a headline has less than a second of a site visitor's attention.
- The first couple words of a headline need to be real attention-grabbers
- Text, not photographs, are the entry point into home pages.
- Short paragraphs receive much more attention (x2) than long ones.
Content:
- Users do not read text word-by-word. Exhaustive reading is rare, especially when prospective customers are conducting their initial search.
- The first two paragraphs must state the most important information.
- They'll read the third word on a line much less often than the first two words.
Website Design:
- Users spend 2/3 of their time viewing the left half of the page (1/3 viewing the right half). - The most important page elements (i.e. navigation, main content) should be showcased between 1/3 and halfway across the page.
- Larger headlines draw more visual attention than small.
- Underlined headlines and visual breaks discourage people from looking at items beyond the break.
- Lower parts of the screen, especially if the users have to scroll down, receive modest viewing (only 19.7% of attention). Users want information fast and scrolling is extra work!
- People will look very far down a page if (a) the layout encourages scanning, and (b) the initially viewable information makes them believe that it will be worth their time to scroll.
- The standard one-column story format perform better than multiple column formats.
- The last element in a list often attracts additional attention.
- Ads in the top and left portions of a home page receive the most attention, and placement near popular editorial content helps attract eyes to ads. Size matters too: big ads are viewed more.
- The more an ad looks like a native site component, the more users will look at it. But users tend to ignore heavily formatted areas (that look like ads).
Decreasing backtracking
- Users do not only navigate on sites searching for information, but rather interact with an online application to complete certain tasks.
- The usage of multiple windows and tabs replaced the 'back' button usage (3rd most-used feature on the Web), posing new challenges for user orientation and backtracking. Clicking hypertext links remains the most-used feature.
- Web browsing is a rapid activity even for pages with substantial content, which calls for page designs that allow for cursory reading.
- Users want more adaptive and customizable Web browsers.
Visual vs. Verbal depicted choice set
- Users will read about 20%of text on a page.
- Web shoppers prefer visual over verbal presentation of choice sets, regardless of choice set size or product category.
- If a choice set is too large (information overload, higher perception of complexity): consumers are overwhelmed and opt-out of choice.
- People perceive a visual presentation to be easier, faster and more enjoyable format; and a verbal presentation more precise.
- The choice process takes longer with verbal than visual depiction.
- Visual format is not the best presentation for large choice sets as the examination of options is less systematic. Verbal description is a more methodological and careful examination.
- In small choice sets, images produce greater performance than text in a matching task (= search task).
Sources:
Bojko, Gaddy, Lew, Quinn, & Israelski (2005). Evaluation of Drug Label Designs Using Eye Tracking. In Proceedings of the Human Factors and Ergonomics Society, 49th Annual Meeting. Orlando, FL.
Chandon (2002). Do We Know What We Look At? An Eye-Tracking Study of Visual Attention and Memory for Brands at the Point of Purchase. Working Paper, INSEAD, Fontainebleau.
Clement, Kristensen, Grønhaug (2013). Understanding consumers' in-store visual perception: The influence of package design features on visual attention, Journal of Retailing and Consumer Services, 20, 234–239.
Dreze & Hussherr (2003). Internet Advertising: Is Anybody Watching? Journal of Interactive Marketing, 17(4), 8–23.
Goldberg, Probart & Zak (1999). Visual Search of Food Nutrition Labels. Human Factors, 41(3): 425–437.
Janiszewski (1998). The Influence of Display Characteristics on Visual Exploratory Search Behavior. Journal of Consumer Research, 25, 290–301.
Leven (1991). Blickverhalten von Konsumenten: Grundlagen, Messung und Anwendung in der Werbeforschung. Heidelberg: Physica-Verlag.
Lohse (1997). Consumer Eye Movement Patterns on Yellow Pages Advertising. Journal of Advertising, 26(1), 61–73.
Pieters & Warlop (1999). Visual Attention during Brand Choice: The Impact of Time Pressure and Task Motivation. International Journal of Research in Marketing, 16, 1–17.
Pieters & Wedel (2004). Attention Capture and Transfer in Advertising: Brand, Pictorial and Text-Size Effects. Journal of Marketing, 68, 36–50.
Pieters, Warlop & Wedel (2002). Breaking Through the Clutter: Benefits of Advertisement Originality and Familiarity on Brand Attention and Memory. Management Science, 48(6), 765–781.
Poynter Institute: Eyetrack III http://www.math.unipd.it/~massimo/corsi/tecweb2/Eyetrack-III.pdf
Rayner, Rotello, Stewart, Keir & Duffy (2001). Integrating Text and Pictorial Information: Eye Movements When Looking at Print Advertisements. Journal of Experimental Psychology: Applied, 7(3), 219–226.
Rosbergen, Wedel & Pieters (1990). Analyzing Visual Attention to Repeated Print Advertising Using Scanpath Theory (Tech. Rep.). University Library Groningen, SOM Research School. (# 97B32)
Townsend & Kahn (2008). The “Visual Preference Heuristic”: The Influence of Visual versus Verbal Depiction on Assortment Processing, Perceived Variety, and Choice Overload. Journal of Consumer Research, 40(5), 993-1015.
Wedel & Pieters (2000). Eye Fixations on Advertisements and Memory for Brands: A Model and Findings. Marketing Science, 19(4), 297–312.
Weinreich, Obendorf, Herder & Mayer (2008). Not Quite the Average: An Empirical Study of Web Use. ACM Transactions on the Web, 2(1).
AMA SERVSIG –– International Service Research Conference 2014
The 8th AMA Service Special Interest Group (SERVSIG) conference took place in Thessaloniki, Greece. SERVSIG 2014 "Services Marketing in the New Economic and Social Landscape" was organised by the University of Macedonia. I attended the 3-day conference with the marketing group of the division of Business Administration, Linköping University. I presented a working paper on “Green Service Innovation”, co-authored with Per Frankelius, Mikael Ottoson, Victor Aichagui and Lars Witell.
The starting point is that service innovations are the greenest solutions to the world’s current resources issue. Moreover, green consumers are shifting from product to services (e.g. car-sharing), and companies moved from adding a green perspective to existing services (responsive CSR) to designing entirely new green services based on innovations (strategic CSR). Green companies innovate away from an unsustainable product, and invent a service instead, finding new ways to meet old needs. However, there is a lack of academic consensus on the concept of green service innovation:
- What factors can define the green service innovation?
- What are the distinctive characteristics of green service innovations?
To improve our understanding of the concept of green service innovation, we combine empirical observations (multiple case-studies from Scandinavian companies) and existing theory (marketing literature review). As a result, we develop a framework based on two dimensions:
Service Provision: Direct service, and Indirect service.
Resource Integration: Reusing waste, Reducing ecological impact, and Improving Nature.
These two dimensions help to differentiate 6 types of green service innovations, which can be developed by:
the redistribution of resources,
changing customer behavior,
improving conditions for nature,
upcycling,
the replacement of technology,
and products improving nature.
The presentation went very well and the audience (25-30 attendees) was interactive and interested. As of today, we are still developing this framework. Any suggestion is appreciated.
AMA Retail & Pricing SIG –– Shopper Marketing Conference 2014
May 8-10th, I was at Stockholm School of Economics (SSE) for the 2014 Shopper Marketing: In-Store, Online, Social & Mobile conference. It was co-organised by the SSE Center for Retailing and Babson College Retail Supply Chain Institute and supported by AMA Retail and Pricing SIG.
The conference was set up as a forum for discussions and platform of knowledge exchange between academic research and retailing practice. Some of the world’s top marketing scholars (Kumar V., Ailawadi K., Roggeveen A., Burke B., Grewal D.) and executives from the Swedish retail industry (ICA, Hemtex, Kick’s, InkClub, Axel Johnson, etc.) were gathered in Stockholm.
As such, there was 1 day focusing on applied marketing research in the retail industry and 2 days of presentations of academic studies and findings. Here is my take on it.
On DAY ONE, V. Kumar PhD, Georgia State University, spoke for the first plenary session: Research In Retailing: A Personal Perspective. VK presented his perspective for the Journal of Marketing (JM), which he is the next editor in chief. Key facts about JM:
* 48 articles/year
* 9% acceptance rate
* 50% authors outside of US
* submissions expected to decrease
* integration of concepts/disciplines (e.g. SoLoMo marketing)
In short, the future of marketing research must have “Rigor & Relevance” such as managers should be able to advance the field by applying generalisable research findings. JM publication strategy emphasises ‘practitioner involvement’ and ‘actionable implications’ with three submission requirement: 1) interesting, 2) valid, 3) broad appeal.
On DAY TWO, various CEOs, CMOs, consultants and involved researchers spoke about Applied Research in the Retailing Industry.
Per Strömberg, CEO (ICA) explained that ICA success was based on the independence of the shop owners, seen as entrepreneurs. ICA strategy to create customer value is driven by Transparence & Sustainability.
Their own research shows that consumers satisfaction depends on Product Range, Price and Service (Customer Satisfaction Index, 2010). To change the consumers’ price perception (that was too high) the retailer replaced in 2011 its private label ICA BASIC by EUROSHOPPER. As a result, it drove down the prices of the competing private labels and A-brands.
Anne Roggeveen, Professor (Babson College) presented retailing research of Ailawadi K. and Hendricksson K. (CEO EyeFaster) using eye-tracking technology (unbiased consumers data) combined with purchase data (unbiased) and survey (biased?). These studies show that the average shopping trip is 30mn long and that the consumer decision process is quick (ca. 1sec). This has direct (1) retailing implications: in-store signage should be immediately actionable; and (2) packaging implications: package size/format should stand out to be noticed and text should be written in one single direction (best horizontally).
Caroline Berg, Vice Chairman of the Board (Axel Johnson) showed some facts about the retailing group (Hemköp, Willys, Mekonomen, Åhlens, etc.): e.g. 800 stores and 1 million consumers/day. Their growth is based on their innovation strategy: the triangulation of 1) Sustainability, 2) Services and 3) Digital.
Nanna Hedlund, CMO (Kick’s) emphasised on the critical importance of price transparency for their consumer.
Ray Burke, Professor (Indiana University) demonstrated the use of SMI eye-tracking glasses to answer retail research questions such as “What does the consumer see/process (= attention) in a shop?” or “How do consumers search, interact with and choose products?”.
This conference gave me an opportunity to network with marketing researchers and get insights from the retailing industry. My key take-aways are:
The 2 biggest daily goods retailers in Sweden (ICA and Axel Johnson) have their marketing strategy based on sustainability.
The choice process of consumers (e.g. ICA and Kick’s) is influenced by price.
Eye-Tracking technology provides precise behavioral consumers data with managerial implications.
This motives my ongoing study “Closing the Green Gap: understanding why green consumers choose the brown products” using Eye-Tracking technology.
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