4 research outputs found

    Exogenous cognition and cognitive state theory: the plexus of consumer analytics and decision-making

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    We develop the concept of exogenous cognition (ExC) as a specific manifestation of an external cognitive system (ECS). Exogenous cognition describes the technological and algorithmic extension of (and annexation of) cognition in a consumption context. ExC provides a framework to enhance understanding of the impact of pervasive computing and smart technology on consumer decision-making and the behavioural impacts of consumer analytics. To this end, the paper provides commentary and structures to outline the impact of ExC and to elaborate the definition and reach of ExC. The logic of ExC culminates in a theory of cognitive states comprising of three potential decision states; endogenous cognition (EnC), symbiotic cognition (SymC) and surrogate cognition (SurC). These states are posited as transient (consumers might move between them during a purchase episode) and determined by individual propensities and situational antecedents. The paper latterly provides various potential empirical avenues and issues for consideration and debate

    Behavioral entropy and profitability in retail

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    Human behavior is predictable in principle: people are systematic in their everyday choices. This predictability can be used to plan events and infrastructure, both for the public good and for private gains. In this paper we investigate the largely unexplored relationship between the systematic behavior of a customer and its profitability for a retail company. We estimate a customer's behavioral entropy over two dimensions: the basket entropy is the variety of what customers buy, and the spatio-temporal entropy is the spatial and temporal variety of their shopping sessions. To estimate the basket and the spatio-temporal entropy we use data mining and information theoretic techniques. We find that predictable systematic customers are more profitable for a supermarket: their average per capita expenditures are higher than non systematic customers and they visit the shops more often. However, this higher individual profitability is masked by its overall level. The highly systematic customers are a minority of the customer set. As a consequence, the total amount of revenues they generate is small. We suggest that favoring a systematic behavior in their customers might be a good strategy for supermarkets to increase revenue. These results are based on data coming from a large Italian supermarket chain, including more than 50 thousand customers visiting 23 shops to purchase more than 80 thousand distinct products
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