How Retailers Manipulate You Into Spending
We tend to think of shopping as a fairly simple process. You decide you need to purchase something, visit either a brick-and-mortar store or an online retailer that carries the object in question, pick one out among their selection, exchange some money, and go along your merry way.
Oh, if only it were that straightforward.
You see, retailers have a much more insidious role in your purchasing decisions than simply offering you a selection of goods. Both malls and online retailers have several nefarious ways of controlling your behavior. And while their subliminal methods of mind control may not make you quack like a duck, they will make you do something even worse — spend money you can't spare on items you don't really want.
So before you decide to cruise the mall or do a little window (ahem) shopping on Amazon, know what tricks you'll encounter that are engineered to surgically remove your money from your wallet. (See also: 9 Simple Ways to Stop Impulse Buying)
At the Mall
When you go shopping in person, retailers can appeal to much more than just your sense of sight.
1. The Cinnabon Effect
If you've ever wondered why malls all seem to have some sort of baked-good outlet stationed at every single entrance, you can thank the science of scent marketing. (Yes, that's really a thing.)
You see, catching the alluring aroma of those famous cinnamon buns, a mouth-watering whiff of some chocolate chip cookies at the Mrs. Fields, or even the scent of fresh-baked bagels wafting from Panera Bread can all work to put you in a better mood. According to a 1997 study on the effect of ambient odors on behavior, "pleasant odors improve mood and make a person more likely to volunteer for a boring task."
But, of course, there's more to it than that. Odor is also the sense most closely tied to both emotion and memory. This is why you can find yourself inexplicably angry when someone wearing your ex's aftershave sits next to you on a bus, or why smelling pipe smoke can make you keenly remember the time you made that ship in a bottle with your grandfather.
Retailers have found that pleasant scents — and particularly those of baked goods — not only keep people shopping for longer (because of how nice it is to be there), but it also entices them to spend more. According to Mark Gatti, the executive director of marketing at the National Retail Federation,
A lot of retail companies use [scent marketing], and its purpose really is to keep customers in your store, to create this welcoming environment — and it works; it does keep people in your store longer. It helps people feel better in their shopping, and in a lot of cases causes them to spend more money.
The takeaway is that the safest way to visit the mall is by holding your nose the whole time.
2. The Importance of the Food Court
Of course, the other vital aspect of the aroma of baked goods is what effect it has on your stomach. Even if you're not hungry when you smell a fresh-from-the-oven big ol' pretzel, you may find yourself craving one anyway.
And you can hardly walk 20 feet in a mall without tripping over a place to get a snack or a meal. This is a practical tactic on the part of the mall. According to Michael Niemira, vice president of research and chief economist for the International Council of Shopping Malls, "if people aren't rushing home for lunch or can get a snack for a screaming child and stay in the mall, they'll stick around longer. And obviously the longer people stay the more likely they will spend money."
This is also why supermarkets have become home to coffee shops over the past 20 years. When we were children, if we had a hunger-fueled tantrum while Mom was grocery shopping, she had to take us home and abandon her shopping. Today's parents don't have to.
The quality of the food court can also help or hurt a mall's sales. If given the choice between several local malls, how often do you decide to go to the one with the "good" food court — even if you're not specifically planning on eating there?
3. Walking Your Feet Off
Anyone who has gone to the mall in the quest of something specific — a new pair of boots, a rain slicker for an 8-year-old, a wallet for your dad — has felt the frustration of having to go from one end of the mall to the other in order to visit every store with the correct type of merchandise. That's not an accident. If all of the children's clothing stores or shoe stores were grouped together, you wouldn't have an opportunity to walk past every other store in the place and "realize" that you need a new calendar, a new dress, the latest bestseller, and a big ol' pretzel, too.
In terms of working off the calorie-bombs that most food courts offer, this isn't such a bad deal — but, of course, your wallet will also get skinnier.
It's also important to note that department stores can have a great deal of power over where other stores are located in the same mall. These anchor stores often have clauses in their leases dictating what kinds of retail neighbors they can have, including which specific brands they want for their neighbors. So you're not just up against the mall designer's ideas of what store placement will result in maximum profits, you're also dealing with major department stores — and their multi-million dollar marketing departments. You can assume that those folks have a pretty good idea of what set up will most likely part you from your money.
As pernicious as these in-store marketing tactics may be, they are becoming less and less relevant as malls succumb to the era of internet shopping. These days, unless you are a bored teenager or a character in a particularly bad Kevin Smith movie, you're unlikely to be spending a great deal of time at your local mall. However, you will find that marketers are still enticing you to spend money at your favorite online retailers.
1. Free Shipping
How many times have you put an item in your cart at Amazon only to have the site helpfully tell you that adding $X to your order will qualify you for FREE shipping? And how many times have you found yourself purchasing a $12 item you're not sure you want to save yourself about $4 in shipping costs?
Online retailers are taking advantage of the fact that the word "free" seems to short-circuit our brains. We'll take on a greater cost in order to be eligible for something that's free, even though just putting it in those terms is enough to show how completely ridiculous such behavior is.
Dan Ariely, in his book "Predictably Irrational," indicated one possible way of combating the effect of free on our brains. When Amazon launched their free shipping over $25 program, they offered a slightly different bargain in their French market — one franc shipping on orders over a certain threshold. Even though one franc was about the equivalent of 20 cents, it wasn't enough of an enticement to make the French lose their focus on what they really wanted to buy. When Amazon changed the program in France to the same free shipping everyone else was enjoying, "France joined all the other countries in a dramatic sales increase."
This suggests that thinking of free shipping as costing you 50 cents might be enough to make you rethink whether you really need to add that Dr. Who mug to your book order.
2. You Don't Have to Reach for Your Wallet
Every online retailer offers you the helpful option of remembering your credit card information for you, so there's no need for you to pull out your wallet next time you're shopping with them.
Of course, taking the time to get up and walk to your purse — or even reaching into your pocket for your wallet — is time that you can spend thinking about whether or not this purchase is really a good idea. Also, opening up your wallet is an opportunity for you to see you've got all of two bucks in there and remember that it's a long couple of days until payday. That can really take the wind out of the sails of an impulse purchase.
Some retailers (notably Amazon) take ease-of-purchase one step further by offering one-click ordering. This program allows you to go from discovering a product to wanting a product to purchasing a product in a matter of seconds. And while you can reverse these instant purchases, it's a pain in the rear to do so and it can seem easier to just let your credit card be charged.
3. Speed Is of the Essence
There are two ways that online retailers harness the power of speed: by making your shopping experience quick and smooth, and by presenting you with a limited time availability. Both of these tactics make it hard for you to take a moment to think about what you're doing.
When you can easily navigate a shopping site, moving effortlessly from one page of goods to the next, you're caught up in the fun of shopping. Even a longer loading time of a few seconds is enough to let your more frugal nature take over. According to the Most Wanted blog, "cutting page load times from 6-9 seconds to under 2 seconds increased Shopzilla's revenue 5-12%."
The other side of the speed issue is making offers time limited. This is why Groupon and other daily deal sites only offer limited availability for their deals, and why Ticketmaster.com only leaves your potential purchase open for a ridiculously short two minutes. They are counting on your inability to think rationally about a purchase when you feel as though time is ticking away.
But those limited timelines are artificial. Waiting 24 hours to make a decision to buy is not going to make a difference in the majority of purchases, and as Mikelann Valterra of Forbes puts it, "in the space between thought and action resides judgment. Give yourself some space to consciously think."
Online shopping sites want you to react, rather than think.
Get Out of My Brain
Retailers have been working on tactics to get you to spend for years, so in many ways the deck is stacked against the average shopper. The surest way to make sure you don't spend more than you intend is to make your decisions before you set foot in a store on turn on the computer. Then you'll have the time to think through your decisions and you can more easily see through the retail manipulations.