Social Effects in the In-Flight Marketplace: Characterization and Managerial Implications

Abstract

This article investigates the in-flight marketplace, using detailed data of in-flight purchases to understand social effects in purchase behavior and determine their potential for designing marketing promotions. On average, a passenger is approximately 30% more likely to buy an item after being exposed to a lateral purchase. Analyses on the underlying mechanisms reveal that the classical social influence theories do not suffice to explain all the patterns in the data. The author proposes omission neglect, product contagion, and goal balancing as complementary theories. Finally, consumers' willingness to buy is shown to be positively correlated with responsiveness to social influence. This finding indicates that homophily and social feedback effects-classically viewed in the literature as nuisances-can provide targeting value for the firm. By taking these factors into account during behavior-based targeting, firms can double the social spillovers of marketing actions.

A contemporary review of three types of social influence in consumer psychology

“…Although a passive social presence might intentionally try to be influential (e.g., a salesperson who keeps her eyes on consumers to dissuade them from shoplifting), often times the influence is unintentional and even unknown to the social presence. For example, in the context of in‐flight purchases, one passenger's purchase decision can unknowingly influence a second consumer's purchase behavior (Gardete, ). In particular, a second consumer is up to 30% more likely to purchase from an in‐flight catalog if another passenger located in close proximity (i.e., in a lateral seat) makes the purchase first.…”

“…In particular, a second consumer is up to 30% more likely to purchase from an in‐flight catalog if another passenger located in close proximity (i.e., in a lateral seat) makes the purchase first. Furthermore, a fellow passenger's purchase in one product category can negatively influence a second consumer's purchase in a different category (Gardete, ). In this example, the behavior of a social presence (i.e., a fellow passenger) can serve as an informational cue for a second consumer making a product choice.…”

Behavioral biases in marketing

“…Next, we consider social pressure, more specifically social contagion and how it affects consumer behavior. Gardete (2015) studies social effects in the in-flight marketplace. This distribution channel is particularly suitable for the analysis of social effects, as the seating arrangements provide useful information on which passengers' activities can be seen by other passengers and because all purchases on the entertainment system are recorded with a time stamp.…”

How Context Affects Choice

“…Habits form as consumers repeat responses and learn mental associations between features of the performance context and rewards [88]. Decisions of others might shape ones' decisions [10,27], or the presence of default options may affect ones' choices [38]. Taking a wider perspective leads us to define contexts as follows:…”

“…For example, Huang et al [34] use variation in activities, social settings, and other factors to identify context effects. Gardete [27] identifies social context effects by observing airline purchases of individuals who are in the line of sight of those making choices.…”