Monday, February 22, 2010

Want to do something fun? Sorry, not today.

We’re a few snowy days from February 27, otherwise known as Open That Bottle Night. The night was invented by the two Wall Street Journal wine columnists -- in their words, “You know that bottle of wine you've been keeping around for that special occasion that never arrives or because the wine is always going to be better tomorrow? Open that bottle!”

Curious, because you might think we wouldn’t need to be prodded into taking part in something as pleasurable as a bottle of wine.

A recent New York Times article by John Tierney explored the surprisingly widespread human tendency to procrastinate pleasure. We wait to use gift cards, wait to redeem frequent flier miles, and endlessly put off visiting our own hometown tourist attractions. According to a study conducted by Suzanne B. Shu and Ayelet Gneezy, professors of marketing at the University of California, Los Angeles, and the University of California, San Diego, people who have moved to Chicago, Dallas and London visit fewer local landmarks during their first year than the typical tourist visits during a short stay. The only time Chicagoans run around visiting local attractions is just before they are about to move out of town. The same professors gave people gift certificates for movie tickets and French pastries. Some of the certificates expired in a few weeks, while others didn’t expire for two months. The people who got the longer term certificates were more confident they would redeem the gifts, but less likely to actually pull the trigger. It turns out we overestimate how much free time we’ll have in the future. And we become overly focused on imagining idealized scenarios, in which we paint pictures of achieving maximum value and pleasure from miles, gift cards, or bottles of red—without acting to turn these “magical thinking” thought processes into realities.

The Times suggests consumers learn from this research and quickly cash in gift certificates and miles, and that we stop procrastinating pleasure. There might be a few lessons for retailers as well – while customers (and legislators) say they want gift cards that don’t expire, deadlines are actually in the customer’s best interest. Also, this counter-intuitive behavior among gift card holders suggests there might be new, interesting information to be discovered in how shoppers use gift cards. Interesting insights could be well be found in a study using video analytics and shop alongs among gift card users vs. other shoppers to determine particular shopping styles, store penetration, freneticism, overbuying, and more.
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