Herds in Pressurized Steel Tubes? Social Effects in the In-Flight Marketplace

This paper investigates the in-flight marketplace. It uses detailed data of inflight purchases to understand social effects in purchase behavior, and determine their potential for designing marketing promotions. We find that on average a passenger is approximately 30% more likely to buy after being exposed to a lateral purchase. Analyses on the underlying mechanisms reveal that the classical social influence theories do not suffice to explain all the patterns in the data. Omission neglect, product contagion, and goal balancing are proposed as complementary theories. Finally, we find that consumers’ willingness-to-buy is positively correlated with responsiveness to social influence. Because of this homophily and social feedback effects, classically seen as nuisances, can provide targeting value for the firm. Taking them into account in behavioral-based targeting can up to double the social spillovers of marketing actions.

That is Stanford GSB professor Pedro Gardete in a forthcoming paper in the Journal of Marketing Research. Gardete examined the purchase data of up to 2,000 flights from a major US airline during January and February 2012 – totaling 257,000 passengers with a combined 65,525 purchases. Since these transactions were made via credit card, he got information on “buyers’ flight numbers, seat numbers, what they bought, and what time they bought it.”

I wouldn’t be surprised if airlines were already in the habit of maximizing revenue via strategic seating of prolific shoppers to ensure an even distribution on any given flight.

More on the future of air travel here.

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