RAB Insights

RAB Research Archive

The Diderot Effect

You ever buy something, and because of that purchase, you make several more? For example, you buy a house, now suddenly you need furniture, appliances and decorative items. Buy a dress or suit, and suddenly you need shoes, jewelry, a tie or other accessories? It happens to all of us.

It’s a social phenomenon related to consumer goods known as the Diderot effect. It’s named after French philosopher Denis Diderot, who first described the phenomenon in an essay he wrote.

Why is this important to you?

Large national retailers know this effect and arrange their merchandise accordingly. Go into a large furniture store, and rather than random couches and chairs, they are arranged by rooms. Go into a sporting goods store, and you’ll find items arranged by sport, and so on. The question is, do your local retailers know this and practice this?

Stanford research suggests that in-store layout is the number-one driver of profitability in a store. It is more profitable at driving sales than even advertising. In our quest to be a source of business intelligence and a resource to our local clients, sharing the Diderot effect and helping them organize their stores accordingly could be of great help.

McDonald’s simple question: “Do you want fries with that?” increased their annual revenue by 15-40%. This is why fast-food chains now all sell bundled meal packages now rather than just the burger – the Diderot effect.

Our local retailers need all the help they can get. Sharing the Diderot effect with them, helping them organize their store lay-out and bundle or group similar items can may dramatically increase the profitability of their stores. And they would have you to thank for it.

Tomorrow, we’ll share another retail concept known as Dwell time.

Jeff Schmidt is the SVP of Professional Development. You can reach him at Jeff.Schmidt@RAB.com. You can also connect with him on Twitter and LinkedIn.

Source: Jeff Schmidt, RAB