In a recent Fast Company article titled “Why You’re More Likely To Buy Something When Shopping On Your iPad”, author Eric Jaffe breaks down the “Endowment Effect”. Coined by psychologists, the term defines the phenomenon of ownership’s impact on value. As noted in the article, “people tend to increase the value of an item the moment they take ownership of it.” In other words, as soon as a consumer considers something “his”, that consumer will assign a higher “sell” value to that item than another consumer without an ownership stake would.
Interestingly, this phenomenon isn’t limited to actual, literal ownership – it also covers the degree of ownership that consumers feel when they simply touch a product. In other words, a customer who physically picks up a NOOK at Barnes and Noble will assign a higher value to the device than someone who simply looks at the product or package on a shelf.
Recently, a pair of researchers from Boston College conducted a study to determine whether or not virtual touch worked the same way by asking individuals to view online products by clicking a mouse, manipulating a touchpad, or actually touching a computer screen. Those who touched screens assigned substantially more value to the selected products than did the mouse and touchpad groups, indicating that the impact of “touch” on consumers translates to the virtual world.
What can sports teams, entertainment properties and events do with this information (other than mandate iPads in every home)?
- Run promotions during TV and radio broadcasts that drive viewers to install or access an app featuring specific products.
- Text ticket purchase confirmation messages to ticket buyers, including a specific product image and promotion in the text message.
- Outfit your building with WiFi and include a promotion for a deal on merchandise or food and beverage (with corresponding interactive features) on the WiFi home page.
- Make sure all kiosks in arena concourses, the box office, etc. are touch screen rather than keyboard operated.
- Encourage corporate partners who activate on gameday to use iPads as part of their activation strategies, enabling fans to interact with off-site products virtually.
- Include images in all apps that allow in-seat purchasing of concessions and merchandise.
- Put iPads in your suites (Royal Caribbean has been doing this since 2011); showcase premium suite-related products on screen saver/browser home pages/etc.
- At fundraising events such as charity auctions, utilize iPads so that people can “interact” with intangible prizes (i.e., those not physically present at the event) in an effort to raise the value that people may be willing to offer to pay for each prize.