the business world, to lower margins. For most businesses, the
consumer’s brain is the ultimate buzzkill and competitor. Lincoln was
right about not being able to fool all of the people all of the time—and
a lot of dead companies have regretted trying to do so. Our brains
prevent us from making too many dumb decisions, at least after we
screw up a few times.
A handful of companies address their customers’ brains, appeal to
our rational selves, and manage to win. Take Walmart: millions of
consumers size up their options and shop there. As a value
proposition, “more for less” has been the bomb for a long time. It’s
why our ancestors, when deciding which animals to stampede over
cliffs, chose bison over chipmunks, even though the former presented
a whole lot more risk.
Walmart runs one of the world’s most efficient supply chains at an
unrivaled scale. So, the retailer holds its suppliers (makers of mass-
produced, commodified goods) by the balls. By squeezing them,
Walmart lowers its costs, enabling it to pass the savings to consumers
and expand its market share. Walmart now commands approximately
11 percent of retail in the United States.^2 Despite low margins, its
sheer volume produces gargantuan profits. Walmart’s customers use
their brains well—arguably better than wealthier people who spend
more in exchange for perceived prestige.
There is enormous shareholder value created by the winner in the
fight against the brain, but it’s winner-take-all. Once the brain
determines the rational best choice, it’s decisive, monogamous, and
loyal. The poster children for competing in the battle for the brain are
Walmart, Amazon, and even China (they compete on price). Most
companies are not, and can never be, the low-cost leader. It’s a select
club that demands scale for long-term success.
But what if you’re not, and do not aspire to be, the logistics king?
Then your focus should migrate south, from the cold, rigid calculations
of the brain to the more forgiving heart.