Digital Concept: New Retail

In this article, we provide a classification that distinguishes online versus physical retailer. And then we can examine how these differences may influence consumer behavior.
For example, we suggest that online retailing is typically more mobile in nature and has a high level of accessibility, and offers a flexible assortment of products that can be easily customized for each individual customer. In contrast, physical retailing is usually stationary in nature, has limited accessibility, and typically offers a fixed assortment of products that most likely managers.
Thus, this article suggests that these two types of retailers have different attributes, that these attributes have different influences according to a customer's particular situation. Let me give you an example. Say its 1 o'clock in the afternoon, and you want to buy a new t-shirt, you don't have a specific design in mind, you just feel the need for a new t-shirt, and you have a clothing store nearby, you're probably more likely to visit this store to buy this shirt than to visit an online retailer. The second study I'd like to discuss is a more recent study. It was published in the Marketing Science Institute Reports in 2015. This study is by Michael Sciandra and Jeff Inman, they're both at the University of Pittsburgh, and they examined how the use of Smartphones affects shopping behavior in grocery stores. It's a really interesting study. They interviewed 2,000 grocery store shoppers across the U.S., both before and after they entered the physical store. And they asked questions, such as, what do you plan to buy before they went in, and after they come out, the interviewers asked the shoppers what they actually bought, and then compared the difference. In addition, they also asked about their Smartphone usage in the store, if they use a Smartphone and what they use it for. The results of these surveys were quite interesting. For example, they found that only about 15 percent of shoppers use their phones while shopping. So if you do this, you're in the minority.
They then asked how these phones were used, and they found that the vast majority of usage was to actually talk or text with family or friends while shopping, instead of using their phones for shopping-related tasks, such as checking prices, very few people did that. So it was used for more social than for information purposes.
3:33However, what's most interesting is they found that when shoppers were busy talking or texting to their friends, they forgot to purchase a lot of the things they planned on buying. They found that, on average, these distracted shoppers forgot to buy one-third of their pre-purchased planned products. And they also engage in higher levels of impulsive buying, buying things they didn't plan to buy ahead of time. So the results of this study suggest that Smartphones actually distract shoppers by taking their focus away from the shopping task, and that this distraction is likely to reduce the purchase of items that were planned while increasing the purchase of unplanned items.
Now that we've seen this academic research, let's talk about some practical recommendations in terms of what physical retailers can do to adapt to this changing digital retail landscape. First of all, my first recommendation is to market to shoppers.
In recent years, there's been lots of increased focus on understanding and influencing the behavior of shoppers once they enter a physical store.
This development is called shopper marketing and has produced a number of tools and strategies for enhancing retail performance and enhancing the ability of physical retailers to be more successful in a digital environment. For example, in the U.S., grocery stores are starting to introduce smart shopping carts that allow customers to keep track of the things they buy and put in their cart by scanning their barcodes. And also these, these new smart shopping carts can send the customer personalized ads and promotions as they wind their way through the, the grocery store. Another way that physical retailers can market to customers is to make the shopping experience more enjoyable. For example, many shopping malls around the world are now turning to entertainment centers, complete with amusement rides, waterslides, and some even have ski slopes. The second recommendation is to enhance the physical by adding the digital.
So another way that physical retailers can meet the challenge posed by digital tools, such as the internet, is to employ these tools themselves. For example, most retailers have established their own websites and allow customers to use this channel for both information, as well as purchase.
In addition, some forward-looking retailers are starting to digitize the in-store experience.
For example, in Brazil the clothing retail, C&A has high-tech hangers that display the number of likes, just like on Facebook, display the number of likes that item of clothing has received from fellow shoppers.
Third, use the power of touch.
A growing body of research suggests that many consumers have a strong desire, and even a strong need, to physically touch products before they buy them.
In addition, consumers are more likely to buy a product if they've been able to touch it ahead of time.
This may be one reason why most people prefer to shop in physical stores rather than digital ones, especially for products such as clothing, food, and furniture, in which touch conveys lots of information.
The ability to touch a product before buying it is an inherent advantage for physical retailers. Thus, these retailers should leverage this advantage as fully as possible. For example, the New York furniture store, Coco-Mat, let's tired shoppers take a nap on its mattresses. In addition to taking advantage of a consumers need for touch, it's also a great way to keep customers in the store for a longer period of time. Finally, tiny and temporary.
The days of the big bucks store are numbered. They're too big and their costs are too high. In addition, they cost a lot to shut them down when they're not performing. Thus, rather than making such a large and risky investment, retailers can reduce this risk and save money by setting up a temporary pop-up store. These are small retail stores that exist for a limited period of time, which may be as short as even a single day. Because of their small footprint and temporary duration, these stores have low-fixed cost, but often generate substantial attention and increased customer traffic. For example, in 2011, the German clothing firm, Adidas, opened up a pop-up store in Barcelona, Spain that looked like a giant shoebox. Well those are my thoughts about the new retail landscape. I look forward to hearing your thoughts and your examples of how you see the physical retailer adapting to our new digital world.

Digital Concept: New Retail

Let's talk about the new retail landscape. In today's digital world, just about any product can be purchased from an online retailer. For example, Amazon.com sells over 250 million different products on its US website alone. Thus, addition to books, Amazon sells an astonishing variety of different products. Some of these products will be quite hard to find at your local physical retailer. For example, if you were a University of Illinois fan living in Salvador, Brazil, it'd be quite difficult to find this University of Illinois hat at your local retailer.
However, you could easily buy this hat from Amazon.com along with about 80, 8,000 other Illinois items, including sunglasses, scarves, and even toolboxes. In addition to large online mass marketers, such as Amazon, there are also many highly successful online retailers that specialize in specific product categories, such as eyeglasses, shoes, and even wedding dresses. For example, we recently remodeled our home and purchased our staircase from an online vendor. Thus, online retailing is a considerable threat to traditional physical retailers. Indeed, online competition has forced the closure of several retailers across many product categories, including music, books, and consumer electronics.
In the US, many indoor shopping malls are closing or have several vacant stores and no new indoor malls have been built in nearly a decade. Despite the rise of online retailing, most people still buy most of their products from a physical retailer.
Indeed, in the US and many other countries, less than ten percent of total retail sales are done online. Moreover, several physical stores are starting to use digital tools to enhance the shopping experience.
Like many big box retailers, Best Buy has had difficulty combatting online retailers. In contrast to online retailers such as Amazon.com, Best Buy has a much higher set of fixed cost, such as the lease for its retail stores, high energy, and the salary of its ever-changing sales staff. Thus, big box stores are shrinking in size in an attempt to bring these costs down. Best Buy has taken this size reduction to the extreme by installing vending machines stocked with top-selling products, such as smartphones, cameras, and headphones, across many high traffic locations, such as hotels, airports, and train stations.
At present, Best Buy has about 200 of these machines installed across the US. A second example of this changing landscape is the Tesco virtual stores. Tesco is the UK Walmart. So this British mega-retailer has installed a set of virtual stores at bus stops and subway stations in Seoul, South Korea. In essence, these stores are simply a large screen that displays various products. Shoppers just need to download a Tesco app on the smartphone. They can use this app to scan the barcode of the item they want to purchase on these virtual screens. The items that they scan can then be delivered to their home. This Tesco app is now the number one shopping app in all of Korea and has well over a million downloads.
The third example comes from Australia, and it's called the Rotate Store, and that's what it was. This interesting pop-up store operated in Sydney from 2013 to 2014, and this temporary store transformed its entire assortment every eight weeks. So every two months, it was a completely different store. This innovative approach encouraged customers to return to the store to see what was new. In addition to the new merchandise that was stocked in the store, it was also hard to find online.
Now that we have some examples, let's look at a definition of what we mean by new retail.
So this concept is closely linked to the ideas outlined in Darrell Rigby's article on the future of shopping, which I encourage you to read as part of this module. In essence, new retail is a collection of strategies, both physical and digital, that physical retailers are using to react to the challenges of operating in a digital world.
So what does this mean? Let me take a deeper dive into some interesting issues. There are lots of issues we could discuss. I want to focus on three key observations about this new retailing landscape. First of all, location, location, location. According to many real estate experts, location is the single most important factor when selling a home. Thus, it's better to have a bad house in a good neighborhood than a good house in a bad neighborhood. The importance of location also extends to retailing.
A substantial body of research shows that online retailing is heavily influence by location, which may sound surprising. For example, people who have easy access to well-priced physical stores are less likely to shop online.
Thus, online shopping is more likely among consumers living in small towns here in Champaign, for example, than in big cities like Chicago. Thus, the appeal of the digital is strongly influenced by one's physical environment.
Second, purchase versus information. In addition to providing a means of purchase, digital retailing also provides a considerable amount of product information. For example, Amazon.com provides a product description, extensive technical information, and also user reviews for most of the products that it sells.
Thus, consumers who visit digital retailers not only purchase products, but also obtain information about them.
They can also do the same for physical retailers, of course. In recent years, there has been lots of discussion about the showrooming phenomenon in which customers first visit a physical store and then buy a product online. Perhaps you have done this yourself. I have. Indeed, in the US, about two out of every three customers who buy online go to a physical store first and take a look at the product.
Although showrooming clearly does happen, in reality, more people engage in its opposite, which is called webrooming, in which they first obtain information about a product online, but then buy their product in a physical store.
Third, digital and physical. We tend to think of digital and physical as two entirely separate things. Indeed, these two forms of retail are quite different in many ways.
However, as shown by the Tesco example we just discussed, a growing number of retailers are seeking ways to blend these two together.
This blending of the digital and the physical is often referred to as omnichannel marketing and is based on the idea that retailers need to take advantage of the strengths of each of these two different shopping channels.
For example, physical retailing is more effective for returning products, obtaining customer service, while online retailing is better in terms of conducting product research and getting the best price.
Thus, a growing number of retailers are seeking to have a presence in both of these two channels.

The interview illusion

Tim Wilson talks about this idea of inside information. You can imagine that information that you've experienced firsthand seems like it's more relevant to the decisions that you make. You could take an example like if you're trying to decide whether to invest money in a bakery, say, so you have Bakery A and Bakery B. You go in to Bakery A and you're talking to the employees; you're sampling the goods; you talk to the manager about their business plan and everything else, but you don't do that for Bakery B. Bakery B, you just read about in the newspaper or some report or something. Now when it comes to investing money in the two, you feel more confident with A than you would with B, but you probably, when you're actually tallying the results of doing that investment, you probably wouldn't be any better with A than B. If anything, that inside personal information that you have with A might actually hurt you in the end because it feels like it's something that you have privileged access to, so it's probably going to give you misinformation about that bakery and about the investment that you're about to make.
The same holds for job interviews, right?
Absolutely.
We think if we can spend ten minutes with a person, we would be able to predict exactly what kind of employee they will be, so, "Yes, she was very confident. I think she will be able to lead a team very well," or, "I'm not so sure about her. She was unsure of herself, and I don't think she's the best fit for this organization," but the data say that interviews are entirely non-predictive of the performance, of job performance.
That's right. In fact, there has been a—we keep talking about these giant analyses. There was one done by I think it was Frank Schmidt and Jack Hunter [sic], and they looked at I think it was 32,000 employees across every job that you can imagine, from farmers to musicians to sales people and so on. They actually tried to figure out—so they did the experiment to see how people would predict that people would do, the employees would do in a particular job, and how they actually did after the fact on the basis of these interviews. They found that pretty much these standard interviews were almost completely useless.
I mean, I think it accounted for what's called eight percent of the variance. To put that in lay terms, it means that—for example, if you had, if you placed your 100 employees on a scale from the best to the worst, and then you actually saw how they performed, and then ranked them again from the best to the worst, you would be right on about eight of those people, in putting them in the correct spot, out of 100 employees. That's not really good.
Now, remember, the point to this episode is that we don't really have much insight into our own behavior. These experiments in this topic mean that we're not very good at predicting other people's behavior as well. In fact, we're not much better, as Richard Nisbett said, we're not much better at predicting our own behavior compared to other people's behavior.
The reason that interviews are so bad, I think, is because of something called the confirmation bias. We see what we expect to see. When you're interviewing a job applicant; you've read their CV; you've read their resume, you have a pretty good idea of whether you like the person or not before they even enter the room. Then when they enter the room, you ask them questions. The thing you ask them is going to be consistent with what your expectations are. So the question might be, "Are you a strong leader?"
Exactly. So, "Are you a strong leader," or you only ask them about the things that will confirm your beliefs. So the very questions that you ask are only going to be ones that make them look better, that they might respond well to. That's why these standard interviews are so bad.
What's better is something called a structured interview. If you asked every single applicant that comes in the door exactly the same things, then it gets a little better in terms of predicting their behavior and in terms of future performance.
Better would be to have—this is work by a colleague of mine, Kevin Eva, and what he's
doing is interviewing medical school applicants, who are already exceptionally good because by virtue of applying for medical school, but what they found is that if they asked people in different rooms and different scenarios—you have different people that are asking these same people different things completely independent of one another— then that is even better than a structured interview. The same person asking this—you have different people asking very structured sorts of questions, and that even gets you a little bit further. The sort of standard interview that we're used to, that most of us have had throughout our careers, is virtually useless, I think.
I think it's also true that the best predictor of future behavior could be the past behavior, so, yes, you could do a structured interview, but even better might be to get a sort of standard measures of people's performance in the past. Whether you're trying to select a job applicant or even a roommate, how—in the past, have they paid their rent on time?
In the past, have they had good performance evaluations and good outcomes?—things that it's difficult to fake or control—it seems that those things, that those standard measures over a long period of time, are much better at predicting job performance or behaviour in the future.
Absolutely, and it's not just—so it's sort of these long-term predictors, as you've said, so, for example, if in university, it would be GPA or even high school, right?
Yes.
So these grades that you've accumulated over a period of four years, it's hard to fake that, right?
On the other hand, if you have, say, a final exam—one high-stakes testing is what they call it—so if you have one exam, one critical exam, like the Graduate Record Examination or your LSATs or MCATs or, you know, all of these different sort of standardized exams, those really aren't good predictors because you could be sick that day; you didn't have much sleep; you had a bunch of things working against you.
This is the idea of what's called multiple independent error factors. At any given moment you have things working for you and things working against you, so, yes, "I missed my alarm," "I missed the bus," "I didn't eat breakfast," all of these kind of things that just happen randomly work against you, and it produces the worst test-taking. Your neighbors were up the night before, and they kept you up, and you just studied all the wrong things, it seems like.
It works in the other way as well. I mean, in some cases everything is going to work for you. So you had just the best sleep. You had the best meal. You studied just the right things. But, again, in every circumstance, when you take long-term behavior, then it's very unlikely that everything is going to work for you or work against you all at once because there are many times for these things to rear their heads, but on a one-trial task like a single test, then, yes, you're at the whim of all sorts of things, which is why it's not a very good predictor of future performance.
What do you think the upshot is then if we don't have much of an insight into our own behavior or the behavior of others?
Well, the title of this episode is called "Know Thyself," and I think that's fairly apt.
One of the other titles that we've covered is the title of Tim Wilson's book, called "Strangers to Ourselves," and I think you're going to see this theme playing out throughout the entire course. We'll see in the next episode, for example, that we have to resolve this.
If we can't, if we have no insight into our own behavior, into why we do the things that we do—and we saw in the last episode that the way that the world works may not be exactly as it seems, so seeing, hearing, remembering all involve considerable knowledge and so on and we're being swayed by any sort of factors whatsoever, whether media reports and everything else—that's a problem. What are we going to do about that? I mean, if we don't even know when it's happening, and these things are actually operating, then what? I think we can get there, but it's going to take a little bit of work.

Naïve realism

We tend to believe that, with the exception of a few tricks or illusions and so on that might fool us into seeing things a particular way, that the world is essentially as it is. I mean, this is kind of an extension of this idea of the videotape, that we're just going through the world and taking things in; it's being recorded and we can reproduce it faithfully.

Obviously, that's not the way the world works, but this idea that the world is like that, the world is as it is and we just interpret in particular ways—it's called naïve realism. This is a notion that Lee Ross has been working a fair bit on. He told us a little bit about naïve realism and how he sees it working. Here's what he had to say. Human beings necessarily think that the world is the way they perceive it to be. If I look around this campus, I see walls and windows and grass. To me, that is the way the world is. Einstein memorably said, "Reality is an illusion," and what he meant by that is that what we experience in reality is kind of the interaction that occurs between the kind of stardust that we're made of and the kind of stardust that's out there. To a physicist, the world is made up of these infinitesimally tiny strings of matter and energy fields—nothing like the way we perceive it to be. What we perceive as reality is our way of responding to that input and that construction.

Of course, we have to assume that the world is the way we perceive it, and in many ways we perceive the world similarly. It serves us really well to believe that: this naïve belief that there's a one-to-one relationship between the way we perceive and the way they really are, but it can get us into trouble, particularly when other people come to that world with different histories, different needs, different goals, different biases, different experiences. That's really cool. The exact same thing came up in my conversation with John Vokey. The world doesn't really look the way you think it looks. As you know, even what you call solid objects are just made up of molecules. There are big spaces between them, so it doesn't really look like that. There are no colors in the world. Color is something you bring to the processing of the information you receive.

So, in some sense, what you just said is always true. You're never really seeing what's out there. That's one level of explanation. In fact, hearing things that most other people would argue are not there or seeing things that other people would argue are not there is not saying much because that's always true.

What, I think, is meant is to try to dissociate, I think, what you're asking about from a straight hallucination, when there actually is no input source that should lead to that conclusion about something being out there, which is usually the result of brain disease or probably induced with some chemicals as well, where the brain's processing gets quite distorted and it's actually doing more than just trying to put together a reasonable construction—it actually creates it, whole cloth. There are people who do suffer from various diseases that in fact lead them to really see things that aren't out there in the sense that another person standing right there with them is just, "There's nothing there, nothing." Those are hallucinations, though. We're talking about in these particular cases where we could lead people to think that they heard, "I saw a girl with a weasel in her mouth," something a bit different.

We've given enough information. Much like we do in the real world, these aren't threshold phenomena that either is or isn't. It's that your perceptional systems are accumulating evidence. Then you can also make use of all sorts of biases that you've developed over your lifetime to, at some point, say, "Yes, I'm confident enough to go with claiming I hear this or see this," and later it turns out, "Oh, it was just the way the blanket was folded." "I thought it was my dog in the bed, but it turns out it was the blanket that was folded, but because I expected my dog there, that's what I saw." That would be not a hallucination. An illusion of the sense or type, I guess, is the way to think about it.

That's all we're really doing, and that's just standard normal processing. There's nothing unusual happening here. It's just what we're doing all the time. We're not really seeing the world as it is; we're just trying to create something that's reasonably predictive of allowing us to act in the world.

Hopefully, people are going to recognize how naïve this idea of naïve realism actually is. As Lee Ross, and now John, have indicated, it doesn't really make sense to talk about things objectively as seeing objects and events as they are in the world instead of being filtered by our own experiences. It should be clear now to people watching this that, again, seeing, hearing, and remembering all involve considerable knowledge of the world.

The fiction of memory

What Beth's research really shows is that our—not just what we see and what we hear—but our memories can actually be distorted. They're plastic and malleable. There's misinformation everywhere. We're getting a constant flow of this misinformation, so it can be from a stop sign or a yield sign or from other people. Think about how this would work. The media could give you information that might bias you in a particular way and create a false memory or an impression of something. But it's only a false memory because it never happened. It's a real memory. You really experienced it—just like you see the Dalmatian dog and you hear those sounds. It's not like this memory is inferior to others. Beth's work, for me, really demonstrates that what we remember is shaped by the sum of our experiences. So if memory is not working like a video camera, it's hard to even recognize that you've made an interpretation at all. All of this stuff is coming at you, and it's just like a visual illusion: you remember it vividly and it's actually happening to you.

Let's use and example to make that a bit more concrete: with a visual illusion. Now this is an illusion that you and I as—well, as one of my honor students discovered a couple of years ago, and I think we can use it to really highlight the fact that we really have no control. We're completely unaware of having made, an interpretation and the illusion happens to us in the same way that these memory illusions are just as real as actual memories. Now we're going to present you with some faces on the screen, and I want you to keep your eyes on the center of the cross in the middle of the screen. Don't look directly at the faces. Keep your eyes on the cross. Okay, are you ready? Here they are. By this point in the video, the faces should look a little bit strange. They might look a little bit alien-like. Some of the eyes might be a little larger than you'd expect, and they might look a little bit paler. But if you replay this section of the video and look at the faces again, you'll see that they're completely normal. We're not playing any tricks on you. There's no Photoshopping going on. What's happening is that the previous face is distorting the face that follows it. For example, if one of the faces has small, beady, little eyes and it's followed by a face with regular-sized eyes, then these regular-sized eyes look huge. Again, you can't help but to see these faces as distorted. That's the nature of the illusion. There's nothing that you can do about it. You're not even aware that your visual system is doing any sort of comparison. It's just happening to you. So think about what's happening here. With this visual illusion, when the faces are flashing up and they look alien-like, it's nothing that you're doing. It's just happening to you. This is across our senses, so, yes, it's happening in vision but it also happens in hearing and could even be happening in smell and taste. We haven't tested these things. But it's definitely happening in memory. We're unaware that we've made and interpretation, and the sum of our perception is shaped by the sum of our experiences.

Illusion: Conversation with Elizabeth Loftus

Many of us have the intuition that we see and hear and remember everything. Does our mind work like a video camera? It definitely doesn't work like a video camera or any kind of recording device. We're not just taking in information and replaying it later. The whole process is much more complex. Actually, memory is reconstructive. We're taking bits and pieces of experience—sometimes things that happened at different times and places—in constructing our memories.

Recollecting. When we recall something, the process is more like one of reconstruction.

Okay. Is that a perfect process? Is it fallible? How does it work?

Well, what happens, when you go through life, you have experiences and you may store bits and pieces of information, but later on other things can happen. People can talk to you. You can tell people about your experiences. You can be fed misinformation about the experience. These activities can change your memory, can transform or distort your memory, so that when you try to call up a memory for a past event, you're reconstructing, and there can be lots of errors.

Okay. But, surely if I'm really confident about my belief or my recollection and it's sincere and really emotional, surely that means it's more likely to be an accurate memory.

Well, it may be slightly more likely to be an accurate memory if you're really confident about it, but confidence is not a good indicator that your memory is accurate because false memories can be expressed with a lot of confidence. They can be expressed with a lot of detail. They can be expressed with a lot of emotion. They have the same characteristics as true memories, and just relying on those characteristics can mislead people into thinking that something is real when it's not.

 Is it possible to implant a false memory, make somebody believe something happened when it never actually happened?

Absolutely. I mean, in my own work, for example, we've changed people's memories for the details of events that they did experience. We've made people, for example, believe that a car went through a stop sign instead of a yield sign, or a guy running from the scene had curly hair instead of straight hair. That's really easy to do. But you can go further with people. You can plant entirely false memories, whole memories, into the minds of people for things that didn't happen.

Wow. So surely that has implications for people testifying in court, like witnesses saying, "Yes, that was the guy that committed the crime," or, "Yes, the car went through the stop sign and hit the other car." Does your research have implications for the courtroom?

Well, it does, because—you know, most of the time little errors that we make in memory don't matter very much. I mean, it doesn't really matter, if I tell you that I had a hamburger for lunch instead of chicken, but when it comes to the legal world, now very precise memory matters, and so memory evidence is precious. It needs to be preserved. It needs to be protected. Unfortunately, a lot of times, it's not, and people or circumstances get there and contaminate those memory traces and lead to travesties of justice.

Wow. Are there any famous cases of false memories?

Oh, gosh. I'm trying to figure out where I would begin. There are certainly a lot of famous politicians who have had distorted memories. One of my favorite ones is Hillary Clinton, who was running for the presidency of the United States, when she talked about a trip that she had taken to Bosnia. She had a very vivid recollection of landing under sniper fire on this trip. It was supposed to be a greeting ceremony, but instead they just had to run to the base. Later, photographs were revealed of this landing in Bosnia, and it was extremely peaceful. Lots of children there. Hillary's daughter was there. So what's going here? She had a distorted memory, one that resulted in a little bit of embarrassment for her, because people called her Pinocchio, but she made a mistake. I mean, she had a false memory. Her case shows us that all that intelligence, all that experience, all that education, all that Yale Law School degree, doesn't protect you from having false memories. We can all make those mistakes. That's interesting.

 Do we ever repress memories? If there's something bad that's happened in our childhood that we might want to forget on some level, do we ever repress memories, and do they ever come back without our knowledge?

On this whole question of repression, I have to say that what we do do is we sometimes don't think about things for a long time and can be reminded of them. Sometimes unpleasant experiences, we don't think about for a long time and we can be reminded of them. But that is ordinary forgetting and remembering. This notion of repression, that you can take years of brutalization, banish it into the unconscious where it's walled off from the rest of mental life, and then get it there and reliably recover it all—just no credible scientific support this. And yet many people have been prosecuted or sued civilly based on claims of repression and so-called derepression.

Is it possible to tell the difference between a true and a false memory?

We haven't had very much luck doing that. I mean, we've tried looking at emotional ratings. Maybe people are more emotional about their true ratings, but that doesn't make a difference. Maybe you see different brain images if you did put people in an FMRI machine, and you'd see differences between true and false memories, but there are barely any differences. Maybe true memories and false memories would persist differentially. Maybe true memories persist longer, but we don't see any evidence for that.

Basic Concept: Placement

The third P is placement. This aspect of the marketing mix focuses on making a product conveniently accessible to potential customers. 

For most products, placement involves the physical movement of a product for manufacturer through a series of marketing channel intermediaries ending typically with an independent retailer. 

The retailer then provides a number of important functions, such as displaying the product upon the shelves and educating its staff about the product's features so they can help sell it to potential customers. 

Coke is a great example of a firm that has effectively employed this aspect of the marketing mix. Coke distributes its product, essentially its formula, to a network of over 250 bottling partners around the globe. These distributors mix the coke formula with water, bottle it, then ship these bottles or cans to a collection of warehouses, which in turn distribute this product to over 16 million retailers around the world across more than 180 countries. These retailers include, not only grocery stores, but also convenience stores, restaurants, movie theaters, and even vending machines. 

Indeed it is almost impossible to walk into a store in most parts of the world and not be able to buy a bottle of Coke. That's good placement. Now let's discuss a few key concepts about the placement part of the marketing mix. 

Placement has a number of key concepts, including inventory management, logistics, and salesforce management. 

In this module we'll focus on two fundamental concepts, distribution and retailing. 

First let's discuss distribution. The distribution channel used by most firms is typically outsourced to a series of independent firms, such as an importer, a wholesaler, and a retailer. For example take a look at the distribution channel for imported flowers. 

As you can see the distribution process is often lengthy and requires substantial resources in terms of both time and money to properly manage. 

Each member of this channel is typically independent from the other members, thus each participant is trying to maximum their revenues and minimize their cost. As a result, conflicts and misunderstandings among channel members often arise. 

So in order to properly manage this channel, a manufacturer needs to carefully select and closely monitor each of his channel partners. 

This is a difficult and costly endeavor and typically drives up the price of its products. Now let's take a look at retail. 

The retailer is typically the final step in the distribution chain. 

Selecting the number and type of retailers is an important decision because it affects the number and type of customers that a firm can acquire for its products. 

For example, firms that produce luxury goods such as Louis V Tagne, employ intensive strategy by making their products available at only a small, exclusive set of retailers. In contrast, lower priced consumer goods such as toothpaste and shampoo typically employ a more extensive placement strategy by making their products available as many different retailers as possible. 

Retailers also vary considerably in terms of degree of customer service. 

Some retailers such as convenience stores are largely self-service operations where customers locate and select products with nearly no assistance from the retailer. 

In contrast, full-service retailers such as high-end department stores take a more active role in assessing a customer's needs and locating the right product to satisfy those needs. 

Now let's talk about what's changing. 

With a few exceptions such as Dell Computers, most physical products are sold for an extensive network of distributors and retailers. These firms play important functions by helping get this product in the hands of customers. However these functions are not free. Typically a manufacturer only receives about 60-70% of a product's final retail price. 

Thus, traditional product placement is an expensive proposition for both firms and consumers. This traditional approach is starting to break down due to the rise of digital tools. Most firms are supplementing or even bypassing physical retailers by making their products directly available at either an online retailer, such as Amazon.com, or on their own website. This trend has been going on for some time and online sales are growing rapidly. 

In 2014 there was nearly $300 billion spent on e commerce in the US alone. 

Even products that we traditionally want to touch or try out at the store, are now being sold online. 

A great example of this is Casper, which is a very innovative new firm that sells mattresses exclusively online. So the first time that a customer gets to try out this mattress is after it's delivered in their home. 

If a mattress can be sold online, just about any product can bypass traditional physical stores. This growth of online retailing is probably not surprising to most participants in this course. However, what is probably surprising is the fact that digital tools are not only capable of replacing the retailer, but the entire distribution channel. 

Today, even large online retailers, such as Amazon.com, have to physically ship products from the manufacturer to the customer. 

However, newly emerging digital tools, such as 3D printers and scanners, make it possible to eliminate the distributor by allowing firms to ship a digital design rather than a physical product. A nice example of this is Nokia, which recently uploaded the design for a case for its Lumia Smartphone on the digital file sharing website, thingiverse.com. 

Anyone in the world can easily access this design and print it out for free using affordable 3D desk top printer. 

Thus, in this new digital marketing environment, we are now moving from long distribution channels that transport physical goods to short distribution channels that transport digital goods. In this module we'll discuss how new digital tools such as 3D printers are starting to change how products are being distributed. 

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Professor Alan Craig

Image from I-CHASS, University of Illinois at Urbana Champaign

Professor Craig is the Senior Associate Director for Human-Computer Interaction at the Institute for Computing in Humanities, Arts, and Social Sciences (I-CHASS) and a Research Scientist at the National Center for Supercomputing Applications (NCSA). He is also the Humanities, Arts, and Social Science‘s specialist for the Extreme Science and Engineering Discovery Environment (XSEDE).

Professor Craig holds Ph.D., M.S and B.S from the University of Illinois at Urbana-Champaign. His paramount career focus has been on the interface between humans and machines. He is involved in many cutting-edge capacities related to scientific visualization, virtual reality, data mining, multi-modal representation of information, and collaborative systems. In his continued association with NCSA for the past twenty-five years, he has underpinned and aided scientists in adopting high performance computing technologies to advance their research. Alan has also been instrumental in developing next generation tools and techniques in high performance computing. With his new role at I-CHASS, he is bringing HPC methodology, tools, and techniques to researchers and educators in humanities, arts, and social science. He has recently authored Developing Virtual Reality Applications, from Elsevier Publishing, and co-authored Understanding Virtual Reality, published by Morgan Kaufmann Publishing.