- Business and Employment
Marketing Ploys Retailers Use to Get You to Spend More Money
These days retailers are doing everything they can to increase their profit margins. However, stiff competition in the marketplace has resulted in the use of cutthroat tactics and advertising gimmicks as the movements of choice on the retail battlefield. Retailers will stop at nothing to get you to spend more money. Some companies have even been known to consult with psychologists to advise them on how to get into our heads. For the uninformed shopper, this could mean disaster. While we've all seen casualties in this battle for your dollar, don't let yourself become another victim. Here are six common marketing ploys that retailers use to get you to spend more money. Go ahead, arm yourself with some knowledge. You won't regret it.
The Aisle of Temptation
The aisle of temptation is a rather new thing that many big box stores are starting to use to get you to buy more stuff. If you haven't seen or experienced the aisle of temptation, then let me explain. The aisle of temptation is a long and winding aisle or system of aisles used to funnel shoppers through the front of the store towards the checkout registers. Before you can spend your hard earned cash on what you originally entered the store for, you have to walk through (and wait in) this aisle. The shelves are stocked with cheap novelty items meant to invoke an impulse purchase from the people waiting in line.
It's been said that the average American will spend up to $200 a month on impulse purchases. That is to say, $200 per month goes to purchase things that the average a person had no intention of buying when they entered the store. That's no insignificant amount of money! Retailers know that we love a good impulse purchase and so they invented the aisle of temptation to cash in. What's interesting to note is that 71% of consumers who were polled regarding impulse purchases stated that they often regret it.
Constantly Rearranging Merchandise
One of the most frustrating things you can experience is going to your favorite store only to find that the employees have moved all of the stuff that you actually liked buying. This is when a 10 minute trip to the grocery store can easily become a 20 minute one....and that's precisely what the retailer wants. The retailers knows that the more time you spend in a store the more money that you will likely spend.
By constantly rearranging merchandise it forces the customer to either spend more time searching for what they want (thus being exposed to more advertising and more products etc) or to ask a sales associate for help. Whenever a customer asks for help, the retailer has an opportunity to sell more things to them. This could include the worker attempting to up-sell you (i.e. "this more expensive brand is better than that one") or recommend items that pair well with your intended purchase (i.e. "this dip would go great with those chips").
I could write a whole series of articles on the subject of product placement in a retail setting. There is so much science that goes into how a store is arranged that it would probably literally blow your mind. In any case, I'd just like to touch on a few things in this article. First, most stores keep their essential items like milk and eggs in the back of the building so that you have to walk past everything else in the store before you reach what you actually need. Retailers also use the arrangement of products on the shelves to their advantage as well. More often than not, the most expensive items are placed on the shelves right at eye level. The cheapest products are often placed on the bottom shelves causing you to have to bend over to get them less you miss them completely. It sounds so silly, but it's surprising how much this tactic actually works.
Long Checkout Lines
Ever wonder why your favorite big box retailer has up to thirty check out registers but never uses them all? There are really only two reasons why retailers under-utilize the availability of registers and it has a direct impact on their bottom line. First, and most obvious, is that the retailer is attempting to spend less on payroll and employee benefits. The second reason is to force you to spend more time in the store. As discussed earlier, the more time that you spend in a store the more money you will end up spending. If a retailer can keep you standing in a line longer (better yet in an aisle of temptation) they can almost guarantee that spending will increase. But this only works up to a certain point. If the lines are too long, customers may get frustrated and leave the store. A good store manager will recognize the balancing point between the amount of customers and available cashiers and staff appropriately to maximize profits.
Many retailers today still use the old "loss leader" tactic for increasing sales. This tactic can actually be pretty good for the customer, as long as they are aware of what's actually going on. This is how the ploy works: The retailer typically picks one or two items to be their loss leaders. Those items get marked down to an unusually low price that no other retailer can match. This may result in the store actually losing money on those particular items (hence the name, "loss leader"). The idea is to attract customers to the store with the low prices of the loss leader items in an effort to get people to purchase other things as well. It sounds risky, but the tactic does work well for many businesses. This is how most convenience stores (which have to compete with grocery stores, etc) make a profit in today's marketplace.
Selling Out of Your First Choice
This ploy is another frustrating one for me. It's frustrating when you arrive at the store only to find that they are completely sold out of your favorite item. Initially you might chalk it up to simple economics (increased demand) or even a lazy staff who forgot to stock or order more. In some cases you may be correct, however, this could also be another marketing ploy.
Retailers know that people tend to favor less expensive brands over more expensive ones given the same characteristics of a product. This is especially true when product branding is not a significant factor. So in an effort to get you to purchase the more expensive items, a retailer may deliberately let the stock of cheaper items run dry. When faced with little choices the customer can either spend more money for the same thing or not buy anything at all. Again, as with the long lines tactic, retailers have to be careful how about how often they let products run out.
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