There’s no denying that Black Friday and the January sales are perceived to be the best time to get your hands on a discount, but don’t forget that these sales bonanzas are also a great opportunity for retailers to take advantage.
For many us, the fear of missing out on a good deal means that we panic buy – but how can you blame us? Stores and websites are covered with hard-to-avoid advertising designed to push us to purchase, and deciding when to put our hands in our pockets is often a matter of impulse.
If you’ve ever popped into a shop to pick up a few things only to leave with twice as much as you intended, you might assume that you were just feeling frivolous. But the reason for your over spending is not always sheer chance or a lack of self-control, it turns out that there is science behind why you spend more.
Here is how retailers use consumer psychology to encourage us to hand over our hard-earned cash. And importantly, how you can ensure that you don’t fall for their tricks this holiday season.
1 THE SCARCITY EFFECT
The trick: Are you fed up with shops urging you to ‘act quickly’ before ‘unmissable deals’ on ‘must-have’ products end – especially during the Black Friday and the January sales? Have you ever felt pressured to purchase more of the same product, simply because it isn’t well stocked and you’re worried you’ll never find it again? I know I sure have: Aldi Jo Malone candle dupes, I’m looking at you.
The shops do it on purpose and its easy to see why: take Amazon.co.uk, for instance. It uses a stock notice to alert use when the product we are browsing gets low on stock. What’s more, its Lightning Deals all feature countdowns, which create a sense of urgency for us shoppers.
This is called the Scarcity Effect, and means that when we think that something is running out, we want it more.
The fix: Scarcity marketing plays on the psychological effects of urgency, low supply and high demand. Resist the urge to panic buy, stock levels will rise and fall – your bank balance doesn’t need to.
2 SHOP LAYOUTS ARE A SCIENCE
The trick: Nothing in a shop is where it is by accident. Every item on a shelf has been purposefully placed and the goal is to get you to buy – and spend – more. Research shows that 60–70% of what we buy in the supermarket is entirely unplanned – chances are, the retailer has played its part.
One way that we get sucked into spending more is down to high-margin departments like floral and fresh-baked goods being positioned near the front door, so you encounter them when your trolley is empty and your spirits high.
Similarly, retailers hide essential items such as milk and bread at the back of the store so that you have no choice but to walk through the entire place to get to them. What’s more studies, show that once we start walking through the ‘racetrack’-style aisles, we are conditioned to go up and down each one without stopping.
To make matters worse, just as you’ve mastered the layout of your regular store, the displays are re-arranged again – and you are back to wandering aimlessly.
Some stores even vary the size of the floor tiles, smaller ones will make the trolley wheels click more often, so we are fooled into thinking we’re moving more quickly than we really are, and as a result, we slow our pace to a browse – usually in the aisle with the most expensive products.
Even the way the shelves are arranged is aimed at making you buy more. Manufacturers pay a premium to place their brand-name products at eye or chest-level. Even our kids are targeted; their eye level is where you’ll find sugary cereal, sweets and children’s magazines.
The fix: Start your shop at the ‘wrong’ end of a supermarket or department store, or in the midst of the more bland central aisles, you are likely to spend less. When looking for deals, look to the top and bottom of shelves as this is where lower-priced stock is hidden. Always head out with a list and allow yourself a maximum of one or two impulse buys that you can afford. You are only human after all.
3 WHAT A DIFFERENCE A TROLLEY MAKES
The trick: Much like how a goldfish continues to grow to fill its container, the amount we buy is directly related to the size of our shopping trolley. In fact, a US study found that when retailers doubled the size of their shopping trolleys, people bought 37% more. Yikes.
The fix: Grab a basket so you won’t over spend.
4 SPECIAL OFFERS THAT DON’T ADD UP
The trick: Around 40% of groceries in the UK are sold on promotion, according to research from Competition and Markets Authority (CMA), but there are many times where these deals are a case of “too good to be true”.
Multibuys, for instance, can be misleading when shops increase the price of a single item just as the offer begins. This means shoppers end up spending more per item than they would have done before the offer. Or if, something is advertised as ‘was £5, now £3’ you’d expect the ‘was’ price to be most recent or regular previous price, but that isn’t always the case, so it is crucial to do your maths carefully.
The fix: To ensure you are not paying more than necessary, check the unit price on the sticker (price per 100ml). In most supermarkets, food will be clearly priced by weight or volume across all stores to make it easier for consumers to compare products and spot the best deal.
5 THE COMPROMISE PRICE EFFECT
The trick: Research shows that shoppers are more likely to choose the middle option of a selection set rather than the extreme options. For example, if you are shopping for a nice bottle of wine or a flat-screen television, few of us actually buy the most costly on offer, or the very cheapest. We tend to go for something the middle of the price range and the retailers know this, and stack shelves accordingly putting the items that are most profitable lines at eye-height. The result? We walk away believing that we got a good deal – and the retailer got your cash, most likely more than you planned on spending.
The fix: Know your budget – and stick to it.
6 SAME GOODS, SAME SHOP – BUT DIFFERENT PRICES
The trick: Some retailers will price the same goods at different prices, depending on where they are placed in the store. If you are buying snacks such as nuts or dried fruit found in the snack area, they will be much more expensive than in the baking products aisle, while cotton buds can much cheaper in the baby aisle. A quick look on the Boots website, for instance, shows that their own brand of Cosmetic Tip Buds cost £1.45 for 80. But a quick peek at the Boots Baby Cotton Buds (200 Pack) shows they are priced at just 59p.
The fix: Always look at all your options before you hit the checkouts.
7 FREE SAMPLES COME WITH A CATCH
The trick: Few of us can say no to free food. In fact, research suggests three-quarters of people who are offered a sample will accept it. But why are retailers literally giving away their goods?
According to The Atlantic, free samples are sure-fire way to boost sales – with cash-and-carry giant Costco reporting a 2,000% increase from the freebies alone.
But the reason behind this is not that the products themselves are irresistible, but rather, we feel obligated to reciprocate to the employee who has just given us free food.
The fix: If you are offered a sample, say no thank you. Your wallet – and your waistline – will thank you.