STOP NUDGING ME: Governmental Nudges on the British public and beyond.

A classic Nudge

The government is changing you for the better whether you like it or not

…and the chances are you’re not even aware of it.

For those of you who are unfamiliar with the concept of ‘Nudge’, it encompasses the idea that an individual’s behaviour can be changed (often without them knowing) via the use of ‘nudge’ in the form of a simple stimulus (Thaler & Sunstein, 2009). A classic example of a ‘nudge’ would be to increase children’s intake of healthy food in school meals, by placing healthier foods at eye level (Thaler & Sunstein, 2009), or to illuminate the healthier foods with more light (Wansink, 2010).

The Nudge Bible

One nudge you Welsh residents may be familiar with, is the 5p fee on carrier bags.

Here’s another good example

And Here.

Now, the ability to change an individual’s behaviour with a nudge is a subtle yet powerful tool, and one that the current UK government is using on the British Public to great effect.

This wing was set up by David Cameron’s cabinet office in July 2010 under the name: The Behavioural Insights Team by a Psychology graduate David Halpern, who claimed that BIT could save the government millions of pounds, through comparably VERY low cost nudges.

In the words of BIT “the Coalition Government’s intention is to find ways of encouraging, supporting and enabling people to make better choices for themselves”

And personally, I’m all for it.

…I think.

But should the government be interfering with people’s free will, even if it is for good?

Currently, the areas that the team have focussed on are:

• Fraud, Error and Debt
• Energy Efficiency
• Consumer Affairs
• Health
• Test, Learn and Adapt

With these interventions, BIT aims to save £300million over the next 5 years simply with the use of Nudge.

Here’s a few examples:

Test, learn and adapt essentially refers to the use of BIT’s randomised controlled trials (RCT) to test how effective their interventions are. Whilst this seems nothing new, BIT claim their RCTs to be very successful  and that their how-to guide on RCT is there most downloaded document (as of September 2012).

BIT’s Fraud error and depth policy will lead to an estimated £70million worth of savings per annum. One example of their nudges is the sending of personalised text messages to individuals who owe fines. BIT found that in trials, texts were SIX times more successful than warning letters, saving nearly £30million pounds, 150’000 baliff interventions, and all for the price of simple text (Cabinet office, 2012).

When it comes to energy efficiency, (amongst other things) the unit has found that by offering free loft clearances, they can increase loft insulation purchases four-fold, simply by appealing to the lazy consumer, who can’t be bothered with he hassle of cleaning their loft, (Cabinet office, 2011)

By all accounts, many people in government believe nudge methods too good to be true.

Low cost.

Low risk.

Huge savings.

In a recession. 

But the governmental evidence (and outside research) is stacking up, and as a result, the UK is now at the forefront of using Nudge in government initiatives, to the point where the Behavioural insights team are even being enlisted by the Australian government to aid in policies in New South Wales.

Despite all the good Nudge can bring, how does it make you feel that the government has this very subtle power?

Here I presented only a brief introduction to some of the nudges BIT is involved in, if you want to find out more, check out the website.

Aldi: A Force of Good Against the Evil Empires

I’ve been sitting here for a while now, trying to come up with a topic for this blog, with only one thing on my mind. “When can I stop thinking and have some lunch?” Now I’ve got some choices, either head up the hill to Morrisons, which provides lots of choice at a competitive price.  Maybe head over to Poundland for a cheap sandwich of dubious quality. However there is a much better choice lurking in Bangor, a supermarket which has been voted Britain’s BEST supermarket…which may be a surprise to some of you, to be a German supermarket chain by the name of…

Aldi

(Touch me)

Who as of June 2012, own 2.8% of the UK market share, (TNS global, 2012), and is the 9th largest grocery chain in Europe.

As a student, cost is everything. This not only includes price, offers and discounts, but also the time and effort it takes to go shopping. Students have a reputation for being lazy after all…

With the help of consumer psychology and behavioural economics, supermarkets have perfected the art of ‘aiding’ consumers with their purchases. It’s the inevitable scenario; all you need is milk.

You head into your local shop.

Twenty minutes later, you’re leaving with a carrier bag filled with a haddock, some Red Leicester cheese, a bag of pork scratchings, a trashy magazine, and a pack of gum.

Now after a while, this becomes rather frustrating. You’re being sucked in by the evil empires (cue the music), and part of you knows it. You’ve spent more money, time and effort shopping than previously planned.

Aldi has a different approach. In the most stereotypically German way, they are beyond efficient. Aldi want you in their supermarket, spending your money, and out again, as quickly as possible. This means more customers going through their tills, bringing in more profit for the company.

Some of the ways in which they do this include:

• They only have approximately five staff working in their shops at any one time.
• Their cashiers are the Olympic scanners of the supermarket world (heaven forbid if you can’t sweep your newly bought possessions into the trolley fast enough).
• They even position bar codes on their products which make them quicker to scan.
• The layout of their buildings don’t involve pesky aisles. Instead you have below eye-level aisles in the centre, with refrigerated items stacked around the edges, to make it easy to spot your milk from half way across the store.
• No outside brands, means no outside vouchers. So no fussing at the till.
• HUGE conveyor-belts on their tills to maximise the amount of people per checkout.

The supermarket may look uninteresting, but it’s deliberate. Aldi = efficiency, and believe it or not, it actually helps the consumer to.

In most cases, Aldi offers you just ONE choice. Where in most supermarkets you have to make a choice between 10 different types of baked beans, in Aldi you have just ONE brand to choose from…their own, which also look borderline identical to the brand leaders of that specific product. Some might say this choice is limiting, but it actually makes your shopping experience comparably stress free and speedy. This therefore decreases the cost to the individual, compared to the average consumer decision making process, perhaps making them more likely to return again. The use of own brands also allows the company to increase their own profit margins (Ailawadi, 2001). (Here’s a great link about choice overload)

However, much research has found (Cunnigham et al, 1982 and Hawes et al, 1982) that people generally prefer national brands over in-store brands, as overall quality is can be viewed as less than national brands.

To address peoples qualms with the one brand system, Aldi recently released the (quite British) comparative advertising campaign “Like Brands, Only Cheaper”, whereby ‘average consumers’ compare Aldi products with other known brands. The price of each item is then displayed, thus implying that Aldi is providing essentially the same product, but cheaper. They also included some humour, families, and small children to elicit some emotional engagement with the audience to make them that more appealing. Here’s some examples:

On the Aldi UK website, they even suggest that in blind-tests, the British public like Aldi brands “as much” as normal brands. Suggesting that quality isn’t sacrificed with their low prices.

Aldi have targeted the consumer from a completely different angle to their competitors, and it’s paying off. Providing comparably stress free, speedy, low-cost shopping in their uniquely German way, they’re now Blighty’s (and apparently Jesus’s) favourite supermarket.

For the record, I don’t work for Aldi.