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Weekly Roundup: From Old Age to Old Signatures
December 20, 2014
The Seven Ways We Pay For Free Parking
December 22, 2014At 88 decibels, the music in the 5th Avenue Abercrombie & Fitch is just below the level requiring employees to wear protection if they hear it for eight hours. Knowing that people like me can barely endure that kind of club sound, I suspect Abercrombie wants me to leave.
Where are we going? To how firms use music to compete.
Music and Our Buying Behavior
The supermarket experiment:
In a nine week experiment at a supermarket, researchers rotated among music with a fast tempo, a slow tempo and no music. Pace was a tricky variable since what is slow to certain people–based maybe on age and geography–is fast to others. After a slew of interviews, they decided that slow could be quantified as 72 or fewer beats per minute while 94 was the dividing line for fast. (For the Beatles, The Long and Winding Road has 67 BPM and Lady Madonna has 110 BPM.)
Testing for how quickly shoppers moved through the store, how much they purchased and how many noticed the music, researchers concluded that when the music was faster, participants’ pace accelerated and they spent less. As for awareness, the tempo seemed not to matter. Most shoppers were not sure if they heard music.
The restaurant experiment:
Trying to target similar variables, another study focused on diners. Data was collected on two seater tables for 32 diners with fast tempo music and for 30 diners with slow music. This time, the metrics were:
- How much actual time for the meal.
- How much perceived time.
- How much money was spent.
Like supermarket shopping, the slow music correlated with more time spent eating (below):
From: “Play That One Again: the Effect of Music Tempo on Consumer Behaviour in a Restaurant”
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And people’s time estimates were inaccurate (below):
From: “Play That One Again: the Effect of Music Tempo on Consumer Behaviour in a Restaurant”
Again, the spending was higher when the music was slower (below):
From: “Play That One Again: the Effect of Music Tempo on Consumer Behaviour in a Restaurant”
More About Abercrombie
Walking into an Abercrombie & Fitch store, according to a Shopify blog, you could be greeted by a strong whiff of Fierce. On its website, Abercrombie describes the fragrance as a “lifestyle…Packed with confidence and a bold, masculine attitude.”
Music and smell are called atmospherics by academics. Also including temperature, color and design, atmospherics in stores influence our spending, our time and whether we return.
Our Bottom Line: Monopolistic Competition
In markets with monopolistic competition, firms have some pricing power but not much. It all depends on how much they are unique–hence the “monopolistic” part of monopolistic competition. You can see where atmospherics can come in handy. For Abercrombie & Fitch, that means spraying Fierce and playing the loud music that younger shoppers enjoy and my baby boomer friends avoid.
In the following continuum, as a clothing retailer, Abercrombie & Fitch would be in the range of monopolistic competition. Then, further along near the oligopoly slot, are businesses with more pricing power like Apple and Kellogg’s.
