why was j. c. penney's ceo ousted?
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Post on 05-Dec-2014
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DESCRIPTIONBehavioral concepts any online retailer should learn.
- 1. Why was J. C. PenneysCEO ousted?Behavioral concepts any retailer should learnFREEOnline ShoppersBehavior
- 2. Why was J. C. Penneys CEO ousted?J. C. Penney stopped promoting sales andoffering coupons and instead made a big deal aboutits everyday low prices. - The New York Times, April 13, 2013The ActionOnline ShoppersBehavior
- 3. Sales dropped 25 percent in 2012- The New York Times, April 13, 2013The ResultOnline ShoppersBehaviorWhy was J. C. Penneys CEO ousted?
- 4. By Omri YacubovichHead of Biz Dev & Marketing@Commerce Sciences17 Slides on:How do online shoppers think?Behavioral concepts any retailer should learnOnline ShoppersBehaviorIntroductionA
- 5. Hi,My name is Omri Yacubovich. Im an Israeli entrepreneur,script writer and innovation leader.Im currently heading the Business Development andMarketing @ Commerce Sciences the first to applybehavioral science into E-Commerce. We are venturebacked by Googles Chairman, Eric Schmidt, deliveringsignificant conversion uplift for 1000+ online retailersincluding US Top 100 retailers.Keep in touch!About metwitter.com/Omri_YacubovichFollow me on facebookConnect with mef
- 6. Introductionif (humans are rational) and (free to make decisions)thenrational decisions are madeCommon BeliefIf our prices are always low,as they would if we offer coupons,we can dismiss couponsIn J. C. Penneys wordsWRONG!WRONG!
- 7. Introduction1+1 = 21+1 = 11Mathematics and Decision Making
- 8. IntroductionThere are some factors that affect decisionmaking abilities and cause people to makeirrational decisions -Wikipedia
- 9. IntroductionHow do we make decisions?Imagine that every time you cross the road, you would have to calculatethe cars driving speed, your walking speed, the length of the road etc.How much time would it take to cross the road? Would you beable to cross the road at all?A car goes from point A to point B,at a rate of 57 mph...
- 10. IntroductionHow do we make decisions?Instead of taking into account all the relevant data, our brain usesheuristics in order to make a decision.
- 11. Introductionheuristics are simple, efficient rules whichpeople often use to form judgments and makedecisions -WikipediaHeuristicsDefinition
- 12. IntroductionHeuristics usuallygive reasonably good resultsquickly & easily
- 13. IntroductionBut there are some hidden traps -behavioral biasesMany of these biases affect belief formation, businessand economic decisions, and human behavior in general
- 14. IntroductionA cognitive bias is a pattern of deviation injudgment, whereby inferences of other people andsituations may be drawn in an illogical fashion. -WikipediaCognitive BiasDefinition
- 15. IntroductionCommon Cognitive BiasesFraming effect Anchoring Availability heuristic ReactanceZero-risk bias Ownership biasLoss aversionOmission biasDistinction biasDuration neglectIllusion of controlBandwagon effectGamblers fallacyStereotypingInformation biasLess-is-better effectConfirmation biasPseudo-certainty effect
- 16. Introductionthe tendency to rely too heavily, or "anchor,"on one trait or piece of information when makingdecisions. -WikipediaAnchoringDefinition
- 17. IntroductionAnchoringExampleAccording to Nobel Prize awarded economic and psychologicalresearches (Kahneman & Tversky) , when people have uncertainty aboutthe price of a product, they often look for information from surroundingofferings and willing to pay higher prices when "anchored" by an higherprice.Kindle offer in Amazon.com:
- 18. IntroductionAnchoringExampleWhen people receive discount they are automatically anchored to theprice before reduction.Whats more appealing?Product A Product B
- 19. Introductiona tendency to prefer the complete eliminationof a risk even when alternative options produce agreater reduction in risk (overall). -WikipediaZero risk biasDefinition
- 20. IntroductionThink QuicklyChoose between a FREE $20 coupon to Apple store, or a $30 coupon for eight dollars.Which one would prefer to get?FREE$20Coupon$30CouponGet Free Coupon Buy for $8Or
- 21. IntroductionZero Risk BiasExample Soap.com homepageThe FREE offer is more valuable than offering the a few dollars discount,equivalent to the delivery price.
- 22. By Omri YacubovichHead of Biz Dev & Marketing@Commerce Sciences17 Slides on:How do online shoppers think?Behavioral concepts any retailer should learnOnline ShoppersBehaviorIntroductionA
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