Shopper Psychology – System 1 and System 2 Thinking

For shopper marketing to be effective we need to understand shoppers. In our shopper marketing and shopper communication training programs we cover a wide range of shopper behaviors and shopper psychology models that can be used to better understand shoppers. But the one that I find most useful is the concept of System 1 and System 2 thinking. In fact it’s impossible to understand shoppers properly without this important concept. If we are ever to understand shoppers and influence them (which is, after all the definition of shopper marketing), then we need to understand a fundamental concept in how humans process information: System 1 and System 2 thinking.

Shopper Psychology – System 1 and System 2 thinking explained

The labels ‘System 1’ and ‘System 2’ have been used in behavioral science since the turn of the century but were popularized when used by Daniel Kahneman in his 2011 book, ‘Thinking Fast and Slow’. In simple terms System 1 and System 2 thinking can be described as follows:

System 1: In System 1 mode, the brain processes information rapidly, intuitively, subconsciously. We do it all the time. Our System 1 processing helps us recognize familiar objects, and process ‘automatically’.

System 2: In System 2 mode, the brain processes much more slowly and deliberately. We move into a more analytical mode. We process more consciously, with more reason.

As human beings, we use System 1 thinking a LOT. The world around us is jammed with information. If we had to process all of this slowly, analytically, the time and energy required would be huge. Imagine how you might drive a car if you had to consciously note every single piece of information around you all the time (the tree, the sign, the other car, the next tree, the sun, the next tree, etc. and so on). It would be exhausting! System 1 processing allows our brains to shortcut a lot of information that is perceived as not relevant to the job at hand (in this case, driving safely).

There are lots of ways of illustrating this: one that I’ve used from time to time is this. You’ll need to try and come up with the answer quickly (use your System One brain!). Think about the sentence below and come up with an answer QUICKLY!

A bat and a ball together cost $1.10. If the bat costs $1 more than the ball, how much does the ball cost?

If you do this rapidly, most people will come up with the answer of 10 cents. With a bit of thought, it is clear that this is wrong. The ball costs 5 cents. But our System 1 brain often gets the answer wrong.

System 1 and System 2 lie at the heart of understanding shopper psychology

So what has all this System 1 and System 2 thinking got to do with shoppers and Shopper Marketing? As we learn more about shopper psychology, It turns out that when we’re shopping, we use a LOT of System 1 thinking!

A lot of shopping environments are complicated, crowded places. A supermarket may have tens of thousands of products. Thousands of promotions. Thousands of pieces of point of sale material. From this mass of information, a shopper needs to find a handful of products. How do they cut through the clutter? System 1 thinking. Again. Imagine if, in a supermarket, you had to consciously process every product and message to find those that are relevant to you? It would take forever! Fortunately, we have System 1 thinking to help us.

The shopper marketing myths about System 1 and System 2 thinking

Before we go much further it’s probably worth dispelling a couple of myths that I’ve seen and heard about shopper psychology and System 1 and System 2 processing.

Firstly, it isn’t true that ‘consumers use System 2, and shoppers use System 1’. As human beings we are using both modes all of the time. Its just that, given the complexity of many shopping environments, shoppers seem to use System 1 thinking a lot.

Secondly, it isn’t true that shopping is always dominated by System 1 thinking. Shoppers use both systems in pretty much every shopping trip I’ve evaluated. The extent to which each is used varies dramatically however. Some shopping trips appear to be almost exclusively System 1 as the shopper grabs a product with barely a glance at it. Other shopping trips clearly involve a lot of thinking and analysis. In almost all shopping situations, there is a bit of both System 1 and System 2 going on.

The implications of System 1 & System 2 processing for consumer brands and retailers

So what does this mean for retailers and brand owners and the efforts they make to influence shoppers? The truth is that System 1 and System 2 thinking affects everything you do in front of a shopper (both online and offline).

The bad news and the good news from System 1 & System 2 thinking

Shopper psychology shows us that as a shopper shops, they use System 1 processing to help them cut through the clutter of the store and find what is relevant to their mission. It’s a sobering thought that a shopper typically notices only a fraction of the products, messages and activations that we put so much time, energy and money into developing and implementing. But if we spend some time understanding how shoppers process information, we can create shopper marketing strategies and activities that navigate the complexity of System 1 and System 2 thinking.

Shopper Psychology: System 1 and System 2 processing impacts everything we do instore

The implications for brands, retailers and marketers of this simple idea are quite profound. The concept of System 1 and System 2 thinking affects everything you put in front of a shopper, both online and offline. Not an exhaustive list, but here are a few to get you going!

• How the shopper navigates the store, where they go and what they focus on
• How the shopper navigates a category, how they search and find products
• How they evaluate prices and price points
• How they respond to promotions
• Whether they switch brands or stick with their favorites
• Whether they even notice your brand, your sign, your display – anything you do!

Shopper Psychology: Just because your marketing works for consumers doesn’t mean it will work for the shopper

One of the most important implications of the System 1 and System 2 processes is that things that work for consumers, might not work for shoppers. It’s one of the key reasons that we need to consider consumers and shoppers differently. That messaging, pack design, point of sale material, shelf layout: whatever it is you’ve done.  If people look at your pack design in a focus group and they like it, it means that they like the pack design. It doesn’t mean that the pack will stand out on the shelf (even if the respondents say it will). The message that you’ve carefully crafted to describe your brands USP? Just because it resonated with consumers when you tested it at their homes, doesn’t mean they will even notice it in a store.

Shopper Psychology: The shopper doesn’t notice most of what happens in a store

Perhaps the most profound and shocking implication of this is that shoppers simply don’t notice most of what we put in a store. Shoppers use System 1 processing to filter out things that aren’t relevant to their mission. So you might have a super display at the front of the store, with a  fantastic visual of the product and a great deal. But if the shopper’s System 1 brain doesn’t think that it is relevant, then your brilliant display isn’t noticed.

The listing that you paid for? The extra facings on the shelf? Could be powerful, but if the shopper doesn’t perceive that it is relevant to their mission, they simple filter it out. It’s like the shopper doesn’t actually see it at all!

Shopper Psychology:  Shopper Marketing is about recognizing how people respond differently in a different context

So if you are ever asked why do we need shopper marketing or why do we need to think about shoppers as distinct from consumers one useful answer is this. People respond different in a different context. And when we’re shopping, its different. If we assume that the response to our marketing will be the same regardless of the situation, we fail. If we fail to adapt our marketing to shoppers to reflect the cognitive differences between a human being in consumer-mode and in shopper-mode, how can we hope to optimize our marketing?

If you’d like to learn more about shopper psychology, System 1 and System 2 thinking, or how to use this understanding to develop better shopper marketing, shopper communication, promotions and omnichannel marketing, check out our training programs now or get in touch.

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