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Consumed
Re-establishing quality in a discount culture
Decision based on price and short-term benefits




There is a discount culture in America. People are programmed to shop at mass
retailers, wait for sales to make purchases, and find thrill in hunting down knock-
offs. Consumers generally make decisions based on price and short-term benefits.
However, it hasn’t always been this way. Which brings us to our project, Consumed.
Decision based on phsycial attributes and long-term value




Historically, retail originates in the bazaar culture, where there was a reciprocity
between buyer and seller, so both had equal power. Consumers determined quality
by examining the physical attributes of a good. Decisions were made based on the
inherent long-term value of a product.
Quality Culture                             Discount Culture




We became interested in why there is such a difference in these two cultures and
mindsets. There is a fundamental historical pattern that people are able to make
decisions based on quality but many times they don’t. We believe that both quality and
discount decisions are based on the same visceral responses, but the evolution of our
culture has caused the discount response to prevail.
Statement
By addressing the psychological behaviors associated with consumer decision-
making and the environments created to promote short-term thinking, design can
create support for quality goods to re-emerge in the consumer goods market,
resulting in improvements in personal long-term spending and the local economy.
History
Mass production resulted in retail advancements including development of the
department store, the price tag and catalog shopping. A broader array of people
had access to goods once reserved for the elite.
History
During the Great Depression, retailers broadcasted
sales to urge spending. Consumers translated
this to mean high initial mark ups. Vicious
competition was brewing, but fixed prices and
codes of conduct were established to save the
local retailer.
History
The catalyst of our discount culture
was when Eugene Ferkauf founded
Korvette’s. He proved that cutting the
traditional 40% markup on goods in
half would make profits soar well above
the loss. By circumventing anti-price-
cutting laws through a “membership
only” loophole, he created the discount
store model.
How
With the discount model, price control was passed from the makers to consumers.




Take this example of milk. Two clearly differentiated products with pricing structures
based on quality can coexist, until the consumer demand for higher quality product
at lower cost is met.
How
Retailers like Wal-Mart followed Ferkauf’s model and became the norm. They
learned that they could tap into psychological behaviors associated with consumer
decision-making by masking low quality with perceived value. Hence, the market
became flooded with meaningless information.
How
Without the consumer being able to differentiate products, the discount visceral
reaction prevailed. Quality retailers could compete for price and compromise
quality, or go out of business. Consumer demand for cheaper goods had eliminated
choice from the market and the discount culture emerged.
How
                   Consumer Demand
                    for Cheap Goods


                                      Low Quality is Masked,
                                       Encouraging Impulse
                                       Decisions and Short-
                                          Term Thinking




More Cheap Goods
 Are Purchased



                                                 Discount Goods
                                                Rise to Prominence
Effects
                       Consumer Demand
                        for Cheap Goods


                                                     Low Quality is Masked,
                                                      Encouraging Impulse
                                                      Decisions and Short-
                                                         Term Thinking




    More Cheap Goods
     Are Purchased
                                  Personal
                                                                 Discount Goods
                                                                Rise to Prominence




              Workers Have Less
               Spending Power
                                          Consumer Falls Into
                                          Personal Long-Term
                                           Spending Habits
Effects
                       Consumer Demand
                        for Cheap Goods


                                                     Low Quality is Masked,
                                                      Encouraging Impulse
                                                      Decisions and Short-
                                                         Term Thinking




    More Cheap Goods
     Are Purchased



                                                                      Discount Goods
                                                                     Rise to Prominence




             Workers Have Less
              Spending Power
                                          Consumer Falls Into
                                          Personal Long-Term
                                           Spending Habits


                                            Economic

                                                 Workers are Paid
                                                 Less and Benefits
                                                      are Cut
Intent
We hypothesize that all consumers are able to make decisions based on quality or
on discount, but some people are more inclined to one reaction. We will co-design
with consumers at either end of this scale to understand the environments which
provoke these decisions. Using the Socratic method we will draw on the quality
visceral reaction of consumers who are more inclined to purchase at a discount.




                                       e     Qua
                                 P ri c          lity




              lity                               lity              P ri c
          Qua                                Qua                         e
Intent




                                                                                 ry




                                                                                                                                            ch
                                                                               ua




                                                                                                                                          ar
                                                     Analyze Data                                                 Analyze Data




                                                                             br




                                                                                                                                        M
                                                                           Fe
                               Observe   Interview                    Develop a Prototype   Observe + Interview                    Refine Prototype   Observe +
      Research



         Organize Test Groups



                                                     Test Prototype                                               Test Prototype
                 Find Opportunity




To begin our project, we will focus on research. This will involve observing and
interviewing consumers, identifying opportunities, consulting with experts, and
organizing focus groups to verify our findings. From here, we will begin developing
a prototype that will encourage consumers to make decisions based on quality in real
life scenarios, which will be tested and evaluated several times by a test group.
Intent
How we differentiate quality goods from discount goods will be important
to the development of our project. Some factors we have identified include
functionality, durability, usefulness, responsible production, and services
and support. Expert and user opinion will further inform this definition.
Intent
Our prototype is yet to be determined, but may take one of several different
forms. Examples include a business classification and certification system,
a product labeling system, a guide for consumers, a personal or economic
barometer, or a business model, such as a co-op.
ril
       Intent


                                             Ap
nalyze Data

                  ch




                                                                      ril
                ar




                                                                      Ap
ta                                                  Analyze Data
              M




                                                  Complete Protocol                        Package and Document
         Refine Prototype   Observe + Interview                        Complete Protocol         Package and Document




                                                                                                               Consumer
                                                                                             Businesses
                                                                                                            Advocacy Groups

ype
                                                                                                               Consumer
                                                                                  Businesses
                                                                                                            Advocacy Groups




      After finalizing our prototype, we will then package and document our work.
      Depending on the final direction of our prototype, we will collaborate with either local
      businesses to develop new plans and strategies or with consumer advocacy groups to
      help consumers to make decisions based on quality and more accurately understand
      the environments that retailers create to manipulate their decision process.

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"Consumed" Pecha Kucha Presentation

  • 2. Decision based on price and short-term benefits There is a discount culture in America. People are programmed to shop at mass retailers, wait for sales to make purchases, and find thrill in hunting down knock- offs. Consumers generally make decisions based on price and short-term benefits. However, it hasn’t always been this way. Which brings us to our project, Consumed.
  • 3. Decision based on phsycial attributes and long-term value Historically, retail originates in the bazaar culture, where there was a reciprocity between buyer and seller, so both had equal power. Consumers determined quality by examining the physical attributes of a good. Decisions were made based on the inherent long-term value of a product.
  • 4. Quality Culture Discount Culture We became interested in why there is such a difference in these two cultures and mindsets. There is a fundamental historical pattern that people are able to make decisions based on quality but many times they don’t. We believe that both quality and discount decisions are based on the same visceral responses, but the evolution of our culture has caused the discount response to prevail.
  • 5. Statement By addressing the psychological behaviors associated with consumer decision- making and the environments created to promote short-term thinking, design can create support for quality goods to re-emerge in the consumer goods market, resulting in improvements in personal long-term spending and the local economy.
  • 6. History Mass production resulted in retail advancements including development of the department store, the price tag and catalog shopping. A broader array of people had access to goods once reserved for the elite.
  • 7. History During the Great Depression, retailers broadcasted sales to urge spending. Consumers translated this to mean high initial mark ups. Vicious competition was brewing, but fixed prices and codes of conduct were established to save the local retailer.
  • 8. History The catalyst of our discount culture was when Eugene Ferkauf founded Korvette’s. He proved that cutting the traditional 40% markup on goods in half would make profits soar well above the loss. By circumventing anti-price- cutting laws through a “membership only” loophole, he created the discount store model.
  • 9. How With the discount model, price control was passed from the makers to consumers. Take this example of milk. Two clearly differentiated products with pricing structures based on quality can coexist, until the consumer demand for higher quality product at lower cost is met.
  • 10. How Retailers like Wal-Mart followed Ferkauf’s model and became the norm. They learned that they could tap into psychological behaviors associated with consumer decision-making by masking low quality with perceived value. Hence, the market became flooded with meaningless information.
  • 11. How Without the consumer being able to differentiate products, the discount visceral reaction prevailed. Quality retailers could compete for price and compromise quality, or go out of business. Consumer demand for cheaper goods had eliminated choice from the market and the discount culture emerged.
  • 12. How Consumer Demand for Cheap Goods Low Quality is Masked, Encouraging Impulse Decisions and Short- Term Thinking More Cheap Goods Are Purchased Discount Goods Rise to Prominence
  • 13. Effects Consumer Demand for Cheap Goods Low Quality is Masked, Encouraging Impulse Decisions and Short- Term Thinking More Cheap Goods Are Purchased Personal Discount Goods Rise to Prominence Workers Have Less Spending Power Consumer Falls Into Personal Long-Term Spending Habits
  • 14. Effects Consumer Demand for Cheap Goods Low Quality is Masked, Encouraging Impulse Decisions and Short- Term Thinking More Cheap Goods Are Purchased Discount Goods Rise to Prominence Workers Have Less Spending Power Consumer Falls Into Personal Long-Term Spending Habits Economic Workers are Paid Less and Benefits are Cut
  • 15. Intent We hypothesize that all consumers are able to make decisions based on quality or on discount, but some people are more inclined to one reaction. We will co-design with consumers at either end of this scale to understand the environments which provoke these decisions. Using the Socratic method we will draw on the quality visceral reaction of consumers who are more inclined to purchase at a discount. e Qua P ri c lity lity lity P ri c Qua Qua e
  • 16. Intent ry ch ua ar Analyze Data Analyze Data br M Fe Observe Interview Develop a Prototype Observe + Interview Refine Prototype Observe + Research Organize Test Groups Test Prototype Test Prototype Find Opportunity To begin our project, we will focus on research. This will involve observing and interviewing consumers, identifying opportunities, consulting with experts, and organizing focus groups to verify our findings. From here, we will begin developing a prototype that will encourage consumers to make decisions based on quality in real life scenarios, which will be tested and evaluated several times by a test group.
  • 17. Intent How we differentiate quality goods from discount goods will be important to the development of our project. Some factors we have identified include functionality, durability, usefulness, responsible production, and services and support. Expert and user opinion will further inform this definition.
  • 18. Intent Our prototype is yet to be determined, but may take one of several different forms. Examples include a business classification and certification system, a product labeling system, a guide for consumers, a personal or economic barometer, or a business model, such as a co-op.
  • 19. ril Intent Ap nalyze Data ch ril ar Ap ta Analyze Data M Complete Protocol Package and Document Refine Prototype Observe + Interview Complete Protocol Package and Document Consumer Businesses Advocacy Groups ype Consumer Businesses Advocacy Groups After finalizing our prototype, we will then package and document our work. Depending on the final direction of our prototype, we will collaborate with either local businesses to develop new plans and strategies or with consumer advocacy groups to help consumers to make decisions based on quality and more accurately understand the environments that retailers create to manipulate their decision process.