- 24/12/2022
- Category: Commentaries
Author: Katya Loviana
Editor: M Perdana Karim
Background
The herd mentality, commonly also known as mob mentality, has always been around. The phenomenon shows how wanting-to-be-with-the-crowd strongly affects people’s behaviour, especially with the trending term, the “fear of missing out” (FOMO). Nowadays, as the use of the internet keeps on increasing, herd mentality becomes broader and stronger with information spread more easily. In the case of the digital economy, this phenomenon undoubtedly affects individuals’ economic behaviour which consequently affects businesses both positively and negatively, depending on the purpose of the herd itself.
Herd mentality can be defined as the alignment of thoughts or behaviours of individuals within a group through interaction without coordination[1]. Herding can be defined as a convergence towards similar behaviour[2]. Many works of literature have proven the theory of herd mentality, such as research at Leeds University led by Prof. Jens Krause, who conducted an experiment by instructing volunteers to walk randomly without any clear direction. Ultimately, they blindly follow one or two people who seem to know the direction[3]. In simple, mob mentality can be understood as “everyone does what everyone else is doing.” This mentality can be perceived as rational because other decision-makers may possess information that is valuable to the individual, thus each decision-maker takes into account other decisions made by previous decision-makers [4].
Herd Mentality and Social Media
Globally, 58.7% of the population used social media in April 2022, with an average rate of 10 new users per second. The pandemic contributes significantly to this high social media use, as 43% of internet users spent more time on social media due to Covid-19[v]. In line with high traffic, the broad reach and fast speed of sending messages through social media help magnify the impact. In the case of mob mentality, social media has been proven to have a herd effect on its users. The more people trust messages in social media, the more they will actively join the mob[vi]. Thus, with more people being forced to sharpen their digital skills due to Covid-19, delivering messages through a push-of-a-button has become the favourite strategy to conduct online campaigns and create a herding effect.
Consumers
Over time, social influence has proven to impact consumer behaviour through the herding effect. Even before the internet and social media era, the tendency to get influenced by others already existed. Consumers can ignore any signals from themselves in order to copy the behaviour of the majority. Nowadays, the existence of an online environment enhances the impact of the influence as consumers can now observe others’ buying behaviour more easily, with social media as one of the most used online environments[vii].
The innovation of e-commerce has made buying goods more accessible than ever. However, consumers lose the privilege of physically touching and feeling products. In the case of online shopping, consumers tend to utilize reviews from other people as an essential factor in a buying decision. When the majority reviews positively or negatively, it reduces the uncertainty consumers feel in buying the product[viii]. Through social media platforms, such as Tiktok and Instagram, sharing reviews regarding a product has been popularized as one of the most essential considerations in a buying decision. Especially product reviews stated by influencers who have their own crowd of supporters. Thus, creating a new source of income and go-to marketing strategy called endorsement.
Social influence through social media also affects the brand image as a whole. Mintel classified 7 drivers impacting consumer behaviour in 2022, with identity and value among them. Identity explains how expressing oneself, and the feeling of belonging within the society and value explains how relevance in a company’s value affects consumer behaviour and perception towards the company[ix]. Thus, if the majority perceive that a company’s value is on the negative side, the initially neutral-to-positive consumers might shift their perception towards the majority as it may contradict their identity and question their value, creating a herding effect. Consequently, the business performance of that company might decrease. Social media as the platform that accommodates a share of perception can strengthen the effect.
A well-known global phenomenon of herding mentality in the case of consumer behaviour is Non-Fungible Token (NFT). The hashtag ‘#nft’ on social media increased by 3,566% throughout January—October 2021[x]. Consequently, NFT sales increased from $82.5 million in 2020 to $17.7 billion in 2021[xi]. This depicts how effective social media is in influencing consumer behaviour in a herding way.
Workers
A trend of workers complaining about their work can be widely seen on social media, both using their own accounts or anonymously through specialized accounts, such as @ecommurz, @hrdbacot, and @taktekbum. Those accounts act as a platform to facilitate the online herding of workers in Indonesia. Undoubtedly, the trend starts with few workers and ends up with many more who relate to the situation and feel a sense of belonging in the community. In this case, the herding effect forms a mob that could harm the company’s brand image.
In Indonesia, two of the most famous cases are Campuspedia and Fabelio. In the last quarter of 2021, a crowd of Campuspedia’s former and ongoing interns complained about the unfair pay and workload given to them. The mob started with one anonymous tweet published by @taktekbum that went viral and was followed by many more tweets from individuals that went through the same experience with the same company. The event following that phenomenon is an apology and clarification post from the CEO himself[xii]. Similarly, in the last quarter of 2021, an allegation about Fabelio’s management began circling on social media, triggered by an anonymous message from the FOMO App. The later confirmed allegation stated that Fabelio hasn’t paid their employees since October 2021 and their social security since 2020, along with many other mismanagement issues[xiii]. The two cases illustrated how social media has magnified the herding effect of workers’ complaints, notably with accounts such as @ecommurz, @hrdbacot, and @taktekbum, which accommodates the online mob.
Though cases and accounts like those harm the company, they can help workers get their labour rights. Other than helping with mismanagement reports, those accounts also participated in the recent mass lay-off phenomenon by start-ups that increased unemployment in Indonesia. To help minimize the impact, the @ecommurz account created a Google Spreadsheet for the public to fill out if they are recently laid off, and this document can then be accessed by recruiters from another company. Interestingly, many people are helped by it as they succeed in getting a new job. On that note, these cases also raise questions regarding the human resource department’s performance, the absence of labour unions, and the lack of support from the government during mass layoff cases as factors that trigger the trend of workers complaining on social media.
Conclusion
Herding mentality has always been and will always be within the society. Notably, with the internet and social media, the herd effect on the digital economy can be as impactful as ever. It significantly affects consumers’ and workers’ perceptions along with their behaviour. Consequently, it can create an impact on business performance both positively and negatively. In that case, it can be seen that companies now commonly implement viral-based action, that is to act faster when they are in the spotlight. Thus, though one does have the liberty of expressing oneself on social media, one must still be careful in making a statement, especially regarding a particular product or company, because it can be a powerful tool to lower performance or even cause business failures.
[1] Raafat, R., Chater, N. and Frith, C., 2009. Herding in humans. Trends in Cognitive Sciences, 13(10), pp.420-428.
[2] Bikhchandani, S., Hirshleifer, D. and Welch, I., 1998. Learning from the Behavior of Others: Conformity, Fads, and Informational Cascades. Journal of Economic Perspectives, 12(3), pp.151-170.
[3] Rispo, V., 2022. Understanding The Human Herd Mentality. [online] Available at: <http://www.adsavvy.org/understanding-the-human-herd-mentality/> [Accessed 21 June 2022].
[4] Banerjee, A., 1992. A Simple Model of Herd Behavior. The Quarterly Journal of Economics, 107(3), pp.797-817.
[v] Kepios, 2022. Digital 2022: Global Overview Report. [online] Available at: <https://kepios.com/reports> [Accessed 21 June 2022].
[vi] Lee, Y., Wu, W. and Lee, C., 2021. How COVID-19 Triggers Our Herding Behavior? Risk Perception, State Anxiety, and Trust. Frontiers in Public Health, 9.
[vii] Ali, M., Amir, H. and Shamsi, A., 2021. Consumer Herding Behavior in Online Buying: A Literature Review. International Review of Management and Business Research, 10(1), pp.345-360.
[viii] Ha, J., Park, K. and Park, J., 2016. Which restaurant should I choose? Herd behavior in the restaurant industry. Journal of Foodservice Business Research, 19(4), pp.396-412.
[ix] Mintel, 2021. 2022 GLOBAL CONSUMER TRENDS: SOUTH APAC. Mintel’s 2022 Global Consumer Trends. Mintel.
[x] GlobalData Themes, 2021. NFT mania is being fuelled by social media herd mentality. [online] Available at: <https://electronic-payments.h5mag.com/epi_se_dec21/nft_mania_is_being_fuelled_by_social_media_herd_mentality> [Accessed 23 June 2022].
[xi] Clark, P., 2022. NFT sales exceeded $17B in 2021: report. [online] Available at: <https://www.axios.com/2022/03/10/nft-sales-17b-2021-report> [Accessed 23 June 2022].
[xii] Nugroho, A., 2021. Viral Denda Karyawan Magang yang Resign, Bos Campuspedia Minta Maaf. Bisnis.com, [online] Available at: <https://teknologi.bisnis.com/read/20211029/266/1459624/viral-denda-karyawan-magang-yang-resign-bos-campuspedia-minta-maaf> [Accessed 23 June 2022].
[xiii] The Finery Report, 2021. Former employees, employees and customers of Fabelio speak up. [online] Available at: <https://www.thefineryreport.com/articles/2021/12/6/former-employees-employees-and-customers-of-fabelio-speak-up> [Accessed 23 June 2022].
