How social influence effects buying behaviour

If the passenger sitting next to you on a flight buys a snack or a movie, does that make it more likely that you, too, will buy something? Yes, says Stanford Graduate School of Business professor Pedro M Gardete. He examined what's known as social effect - when our behaviour is influenced by the behaviour of others - by studying items for sale on an airplane during a flight. Our friends and peers, Gardete says, have plenty of sway over what we buy and when we buy it, but there is still much that marketers and advertisers don't know about the magnitude of that influence. His new research found that when we see someone near us make a purchase, we're 30 per cent more likely to buy something ourselves. Gardete chose the in-flight setting because it is a confined environment and has recorded transaction information.

The next step, says Gardete, is to look at ways companies can take advantage of social effects. "We know now people are prone to social influence. I've documented the features that are necessary for value to exist for companies, but how do they take advantage of that?" he asks. Airlines, for instance, might want to reward its passengers who have made in-flight purchases by sending them vouchers before their next flight or even right after they make a purchase, in real time, says Gardete.

"Implementation is a whole side of this that we don't know much about yet. But it will be an interesting problem to tackle."