How self-service influences customer behaviour

Ever felt the sting of shame at ordering something unhealthy? Or asked for a product out of worry you might mispronounce the tongue-twisting alternative you really wanted? New research from Duke University’s Fuqua School of Business suggests ordering without social interaction influences the choices we make.

Professor Ryan McDevitt found that customers place unhealthier and more complicated pizza orders when they can do so online, without interacting with a clerk. He also saw sales of hard-to-pronounce items increase after liquor stores in Sweden introduced automated ordering.

“If you don’t talk to anyone,” McDevitt said, “it changes your behavior.”

McDevitt worked with Avi Goldfarb and Brian Silverman of the University of Toronto, andSampsa Samila of the National University of Singapore. Their findings, “The Effect of Social Interaction on Economic Transactions: Evidence from Changes in Two Retail Formats,” is forthcoming in the journal Management Science.

The researchers studied more than 160,000 orders placed by more than 56,000 customers at a North Carolina pizza chain between July 2007 and December 2011. They found the online orders included 14 percent more special instructions – combining or dividing toppings – and contained an average of about 100 calories more than phone orders.

Previous research has found fear of embarrassment influences social interaction. The researchers concluded that self-service affects ordering habits by removing that potential, McDevitt said. Customers were freed from concern about negative reactions to what they ordered – triple bacon, for instance – or how long it took to place an order with multiple special requirements.

“Online, you’re not making anyone wait while you place your special order,” he said. “No one’s judging you.”

The team found similar results in another context by studying liquor stores in Sweden that introduced self-service. They examined more than a million transactions at 14 stores in Sweden from 1988 to 1996. The stores variously installed automated purchase stations between 1991 and 1995.

The researchers found the market share of the products that were hardest to pronounce increased by 8.4 percent when stores changed to self-service.

“Though the available choices are the same,” McDevitt said, “The social transaction is removed.”

McDevitt said these effects are likely to be magnified as retailers in more industries shift toward automated and online ordering.

“Every transaction is moving online,” he said. “Sales are going to go up even more because we’re getting rid of the human component.”

This article is published in collaboration with Duke. Publication does not imply endorsement of views by the World Economic Forum.

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Authors: Gregory Phillips is a writer for Duke University. Erin Medlyn is a writer for Duke University.

Image: Charli Crosby, 5, points to a doll in the window of an American Girl store at The Grove mall in Los Angeles November 26, 2013. REUTERS/Lucy Nicholson.