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Effects: Hawthorne, scarcity and showroom

February 6, 2012
by seth godin

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The Hawthorne effect describes how people react to changes in their environment–particularly to the knowledge that they are being paid attention to. Turn up the lights in the factory and productivity goes up. Turn them down and productivity goes up.

It turns out that the Hawthorne effect works at retail too. Tell the buyer at the store that you have a new edition, or a new format, or a new cover or a new pricing strategy and you have a new chance at shelf space. Here‘s an example of this very effort around Truman Capote’s books.

The scarcity effect is surprisingly powerful in a world that’s suddenly filled with abundance. We’ve been trained to expect that every book will be available everywhere, forever. When I had 600 copies of a book that I no longer wanted to warehouse, I blogged that I just had a few left. Sold them all in twenty minutes–and (alas) disappointed more people than I would have liked to. The interesting takeaway for me is that the book has been available for over a year, so it’s not like it was hiding. Only when it became scarce did the rush happen.

The showroom effect is something we’re seeing again and again online. Having your product in a store makes your online sales go up, sometimes significantly. It certainly has a huge impact on ebooks, because, at least for now, ebooks are seen as a shadow of the real book–so if the “real” book is right there, before your eyes, it prompts you to go online and get the digital replacement.

As retail shifts within the book world, some of these effects are going to wane, but right now they matter a lot.

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