Because most philosophies that frown on reproduction don't survive.

Wednesday, October 12, 2011

Online Purity vs. Brick and Mortar Messiness

For a majority of my professional life, I worked at a large company that sold consumer electronics online. I did various types of marketing analytics: analyzing sales to determine how to incent salespeople, building models to pick which customers to pitch which products to, then several different jobs setting prices for different types of products. Then, just over a year ago, I left the company to take a job managing pricing for a moderately large chain of quick service restaurants.

There's been a lot to learn moving from electronics to food service -- but the biggest change, given that I deal with data and prices, has been going from working with a company that sold virtually all its products via the web or phone to a company in which sales depend on what's going on at several thousand individual locations scattered all over the country.

For someone who spends his time trying to figure out how to set prices based on sales data, this takes a lot of getting used to. At my previous company, I could put an item on sale and within hours see the sales pick up. The vast internet, and the ease with which people using shopping portals search out the lowest price on expensive purchases like electronics, made it incredibly easy to measure and predict the effect that setting the price of a given product at different levels would have.

Here things are very different. Not only is making a change harder (changing the price of a product involves getting the crews at hundreds or thousands of locations to all make the right change to their menus on the same day, getting them many materials they need to make that change, making sure they have the supply of the featured items to meet increased demand, etc.), but the results are much harder to read. If the results at a couple dozen locations are terrible in response to a promotion, is that because something was "the wrong price", or because there was construction in the neighborhood making that location hard to get to, or because the assistant manager left and things were run badly for a couple weeks while people scrambled to re-organize the team, etc. Not only can it take a lot of extra work to figure out some of these extraneous factors -- because of scale and the ability of the people at each location to explain what they're running into, you never actually know all of them.

It struck me recently that one of the appeals of the online world is that it presents a sort of streamlined mental universe, in which rivers of data flow smoothly and are little interrupted by local particularities. Having been designed by people who think in numbers, the internet is particularly congenial to those who like the world to be quantifiable. I think at times there's a tendency among those of us who try to understand the world via data to make the rest of the world work "more like the internet" simply because the internet is made to work in ways more easily comprehended by out methods -- a bit like preferring fiction to real life because fiction tends to have a comprehensible plot.


TC said...

First of all, "incent"; I don't care if it is a term of art in your field but it is a crime against English so please don't spread it around.

Back on topic -- preferring the world to be quantifiable as you say, carries it own drawbacks. You cannot browse the aisles of Amazon and find something new that unexpectedly strikes your fancy.

I'm not sure making the real world more like internet is the answer either. I somewhat resent algorithm-driven special offers or recommendations, often wildly wrong because my past purchases were gifts.

Brandon said...

It's hard to know what word could be used in its place; incentivize, the only other alternative, is only about ten years older and is obviously an uglier word.

I suppose that etymologically the verb form of 'incentive' should be 'enchant' (the words come from exactly the same Latin word, the former by way of late Latin and the latter by way of Anglo-French). And now I confess that I am enchanted with the idea of analyzing sales in order to determine how to enchant salespeople, and tickled at the idea of pragmatic business people talking all the time about enchanting other people, and therefore consider this an incentive to start insisting that people use 'enchant' as the verb form of 'incentive'.

Anonymous said...

How do we incent Dubitor to accept a new word?


Foxfier said...

Wouldn't that be a crime against Latin?

Middle English, from Late Latin incentivum, from neuter of incentivus stimulating, from Latin, setting the tune, from incentus, past participle of incinere to play (a tune), from in- + canere to sing — more at chant
First Known Use: 15th century

And on to the topic of the post!

Your theory about folks who like the streamlined form of the net makes sense when you think about the folks who don't especially like the information-net, and the increasingly frequent demands that no-one be allowed any anonymity. Wonder what the correlation point would be? How well folks are at dealing with people face-to-face?
I have a feeling that the folks who really like the information-net also really favor the written word-- which also has a history of being a good place for anonymous promotion of ideas. (Say, the Federalist papers, etc. {yes, the fed. papers are my favorite counter to the 'no anon use of the net'})
(Defining terms:
information-net, the part of the internet that deals with ideas, as opposed to social-net, the part of the internet that deals with socializing. They're not clearly cut differences, but even here it's conversation around ideas, instead of conversation being the main goal.)

AD said...

Ah, complexity. One explanation for the difference (clean, messy) is that perhaps the products that succeed on the Internet are of unambiguous worth, predictable quality--hence price rules. The first big success was (I think) Amazon. The product is known, price matters. The only things I ever buy online are books and electronics.

Now words. I mildly favor efficient insider jargon, especially when it has been nicely streamlined. The alternatives available in our current world don't work well. "Persuade"? No, not quite. "Bribe"? Too cynical. Inside, incent is great. Outside? "how to provide salespeople incentives to pick."

Ken & Carol said...

Re: 'incent' This seems more foreign to my ear than 'incentivize.'

How about 'encourage?'