A musing after a long week buying, shopping, and returning various and sundry items at various and sundry brick’n’mortal establishments:

You run a large chain of clothing retailers – say, HC Annstrom’s. You decide you aren’t using enough data in designing your stores and incentivizing your employees and customers, so you hire a team of data analysts to report back on what works and what doesn’t.

The findings are returned, with great news – there are certain things that, when your employees or customers do them, result in more sales or more profit. So you begin to implement them post-haste:

When a customer touches an item, they are 27.4% more likely to purchase it, so employees are incentivized to hand items to customers.

When a customer tries an item on, they are 17.1% more likely to purchase it, so employees are incentivized to encourage customers into the dressing rooms.

When small, inexpensive items are placed strategically around the register and queue, overall sales volume increase 7.2%, so placed they are.

When clerks recommend signing up for the HC Annstrom’s store credit card, customers are 21.9% more likely to sign up for a card; when they ask again after an initial refusal, this time stressing the discounts, they are still 9.3% more likely to sign up for it. Cashiers are duly incentivized.

This is going to be great!, you think. But there is one thing you didn’t realize: everyone else is doing this too. And not just that, but each of these were measured in isolation, not in tandem.

So what you and every other brick’n’morter clothing retailer is collectively make shopping a miserable, pressure-filled, harrowing experience.

Your homework assignment: explain what this story tells us about:

-The future of internet retail

-The future of Big Data

-The quest to establish “microfoundations” for macroeconomics.

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