Shopping Psych 101: Look, Don't Touch
For many of us, the holiday season is when we go from being “human beings” to
something called “consumers” — slack-jawed robots with one purpose: to buy stuff. We
pour into stores and onto the web to buy gifts for friends and family (and, heck, while
we’re there, a little something for ourselves). To stores, we’re just walking, talking,
browsing cash piñatas.
With that in mind, here are a few things you should know about your consumer brain
before retailers start whacking at you with plastic bats:
Look, but Don’t Try On
Shopping for a new sweater? A new jacket? A new pair of jeans? Beware the dressing
room — because once you’re trying on an item of clothing, something called the
endowment effect may start to set in.
The endowment effect is when a person’s ownership of an object (real or imagined)
makes it suddenly worth much more to them. Take, for example, a study conducted by
economist Dan Ariely, and recounted in his book, "Predictably Irrational." At Duke,
people are fanatical about their basketball team, and especially about tickets to games in
the university’s small basketball stadium. During the Final Four, Ariely’s research team,
posing as scalpers, called up students who had been in a ticket raffle. For students who
had not won tickets, they asked what the most was the students would pay for a ticket;
the average was $170. For students who had won tickets, they asked what was the
smallest amount for which the students would sell the tickets; the average was $2,400.
The lesson: Once we own something, it becomes much more valuable to us. The
students who had won the tickets valued them 14 times more than those who wanted to
buy them. We grow attached to things quickly — thinking about them, imagining
ourselves enjoying them, and focusing on the pain we’d feel if we lost them.
The second you try on that sweater — or take that car for a test drive or start using that
trial version of an expensive piece of software — you start to feel ownership of it. And
it’s that much harder to give it back.
In Fact, Don’t Even Touch
What’s more, recent research shows that it doesn’t even take an interaction as intense as
“trying on” to make you begin to feel the endowment effect. A paper by Joann Peck of
the Wisconsin School of Business, published this year in the Journal of Consumer
Research, shows that merely touching an object can induce feelings of ownership and
make a person willing to pay more for the object in question. No wonder Apple wants to
give you every chance to play with the iPhone in their stores.
For online retailers, Peck found that encouraging “ownership imagery” — basically,
having people imagine owning and touching something — can have a similar effect to
actually touching. So, don’t fondle the goods in your mind too much either.
Are You a Man? Beware of Shopping Near Women
The most important thing we do, biologically, is reproduce. So, it’s no wonder that sex
factors into shopping. In 2007, a study in the Journal of Personality and Social
Psychology reported that “romantically primed” men (that is, men induced to think
about sex by means of being shown pictures of attractive women) were more likely to
splurge on items of conspicuous consumption, like a new car, a fancy watch or a new
cellphone. At the same time, romantically primed men were not likely to increase their
spending on inconspicuous items like an alarm clock or household cleaners.
The researchers’ conclusion: Men use purchases as a signal to potential mates, to show
that they’re fit and have access to resources.
(Do women display the same behavior when romantically primed? At least in this study,
no. Instead, women responded to romantic priming by reporting more willingness to
spend time volunteering.)
So, guys, watch out for that cute salesgirl. And if she touches you on the arm, be
especially careful — human touch releases a brain chemical called oxytocin, which is
important to social bonding and trust. In the lab, oxytocin has been shown to make
people more generous with their money.
The 99-Cent Effect
So, will knowing about these biases will help us act more rationally? Hopefully, but
maybe not. After all, look at the “and-ninety-nine-cents” effect. You already knew
about this one, right? Who do these retailers think they’re kidding with a price like
$99.99 or $199.99?
But if everyone gets it, why do retailers keep doing it? Because it still works.
A recent study in the Journal of Consumer Research found that when pens were priced
at $1.99 and $4.00, only 18% of the participants chose the higher-priced pen; but when
the pens were priced at $2.00 and $3.99, 44% of the participants selected the higher-
priced pen. That one-cent price drop makes the $4 pen seem a lot cheaper.
For whatever reason, we can’t take our eye off that leftmost digit. But we can at least
try.
Supermarket Tricks
Here's a list of commonly used sales tactics printed in the Sept. 2004 issue of The
Ecologist magazine. Some are just good business sense, others are more dubious....
1) GIVING YOU A BASKET If they hand you a basket it's not necessarily
because they think you are swell, it's so you will buy more. 75% of basket carriers buy
something as compared to only 34% without a basket.
2) "RIPE AND READY" FRUIT Now that the public is conditioned to accept
green-picked, flavorless fruit they now can charge a premium for ripe
fruit.
3) IRRATIONAL PRICING When your brain sees $4.99 it doesn't register $5 it
"sees" $4.
4) BUY ONE GET ONE FREE Has been shown to increase purchases up to
150%. We buy more than we really need and they unload excess stock that's not selling.
5) CHILDREN From kiddie carts to give-away products, it works. They now have
"cooking" classes for kids (for which you pay) where the kids are taught to recognize
special child brands which are healthier versions of junk food like chicken nuggets and
pizza. The kids are also taught which deli and ready-made foods to ask for.
6) "EYE LEVEL IS BUY LEVEL" Products at eye level sell 2X as well. Guess
where they put the most expensive, most profitable stuff? Except for CHILDREN'S
snacks and junk (pester food) which is at their eye level.
7) HARD TO COMPARE WEIGHTS Notice that some things are by the
pound, some by the ounce, and some are even in grams. You don't notice
price bumps that can be 10X that of the normal stuff. Many fruits are
pre-packaged in plastic trays making it hard to compare.
8) CELEBRITY ENDORSEMENT Particularly famous chefs. They lend
credibility to store claims.
9) KNOWN-VALUE ITEMS such as bread, butter, milk and sugar are sold
below-cost to lure customers in to beat the competition. Loss leaders
enable them to raise the prices on other items we can't remember the prices of.
10) NEW BOX, OLD PRODUCT The same "Chicken massala" becomes
"Keralan Massala chicken" but it's still the same bad chicken.
11) FREE SAMPLES It's not to get you to buy that product, it gets your
gastric juices flowing, you feel more hungry and buy more, especially expensive "eat-
in-the-car" deli stuff
12) READING HABITS People who read left to right also scan shelves left to right.
The expensive stuff is on the left.
13) MUSIC has an unbelievable power on shopping. Since we walk at about 90 paces
per minute, slowing the tempo below 90 slows us down in the store. Tests show that if
they played German music people bought German wine, when they switch to French
music they bought French wine.
14) FAKE BARGAINS Note the huge mountain of product at a reduced price
right next to the same product at the "original" and higher price. It was never really that
high price but you think it was and pick up the "bargain".
15) VALUE ADDED PRODUCTS A sliced apple sells for 7X what an apple
sells for. Who is really so busy they can't slice an apple?
16) WALKING DISTANCES The most popular items are in the middle of the
aisles and the essential foods like bread and milk are always in the very back of the
store so you have to walk by all the tempting stuff.
17) SAVINGS SCHEMES Such as the computers for schools programs
would require you to buy over $10K in groceries to get one computer.
18) FRESHLY BAKED BREAD (THE SMELL OF) They really don't bake
bread in the stores but they haul out, defrost and heat up a few loaves to get the smell
going.
19) LOYALTY CARDS Are supposed to give you a discount but they never
cost the chains a penny. Card holders buy 42% more groceries. The discount vouchers
cause you to merely buy products you don't normally buy.
20) ZONE SPECIFIC TELEVISION Since 75% of shopping decisions are
made in the 10' before the product, this new technique will be quite
powerful.
21) PESTER POWER What do you find when you get to the checkout line?
Huge rows of sweets and toys. Not only are adults tempted but children can begin the
whining and pestering and it usually works on the parents who are frazzled from the
long journey through the store.
