Consumer Psychology: Why You Buy What You Buy
Grocery stores and shoppers have fundamentally different goals. Your goal is to get what you want at a good price. The store has something else in mind. Grocers want you to wander endlessly through the store, maximizing their opportunity to capture your money. They employ a variety of techniques to do this.
“The shopper's goal is to pop in and pop out, buying what you need but spending as little time as possible in a store,” says Dr. James Intrilligator, a Senior Lecturer of Consumer Psychology at Bangor University in North Wales, UK, quoted by BBC Watchdog. The supermarket's goal, he says, is “to keep you in their store for as long as possible, ideally lost and wandering the aisles.”
Remember the basic rules of smart shopping. Take a shopping list and stick to it. Don't shop when hungry. Don't shop when your mood is decidedly up or down, as this can cause you to go home with items such as alcohol or chocolate that you didn't intend to buy.
Defining Your Goals
A shopper's goals are often ill-defined as he enters a store, and they become more defined as shopping progresses, as explained in “The Psychology of Shopping”, by Vlad Tarko on Softpedia. Because of this, shoppers can be manipulated more strongly if given coupons at the entrance to a store. They are much less likely to use coupons given to them inside the store. A coupon given to a customer at the entrance can cue him to spend more or less, depending on the purchase amount required by the coupon.
Shoppers are also affected by the paradox of choice: they want as many options as possible while also desiring to decide what to buy as easily as possible. We deal with this problem by shopping for an item in two stages, according to a study performed by Northwestern University researchers and published in the Journal of Consumer Research. We first select an assortment, and then we pick a specific option from that assortment.
The study's ironic conclusion is that a large store may draw more customers due to its broad selection, but shoppers may buy less than from a smaller store's more limited choices. There may be an optimal size for many stores, balancing selection with ease of deciding what to buy.
Why do prices often end in 99 Cents? It works.
We're smart. Right? We know that $1.99 is a retailer's way of saying $2. Nevertheless, we still fall prey to it. Writing in SmartMoney, Ryan Sager cited a study in the Journal of Consumer Research that says we might be wrong. Given the choice between pens priced at $1.99 and $4.00, 18 percent of participants chose the higher-priced pen. When the prices were $2.00 and $3.99, 44 percent chose the $3.99 pen.
Most people read from left to right in the United States, making the leftmost numbers in a price most important to busy shoppers, who may see $9.99 as a much better price than $10.00. Looking just at the first digit in the price makes decisions easier for shoppers.
Walmart, on the other hand, is known for value, and reinforces that with unusual prices such as $12.46 that send the message that they have reduced the price by every possible penny, notes consumer psychologist Bruce D. Sanders.
Stores often end a price with zeros to connote quality, notes Aaron Crowe in dealnews. (Incidentally, Gucci just came out with a $14,000 bicycle. No nines in that price tag. I wonder if the price includes someone to ride it for you. And before you ask, the helmet is an additional $960, reports Gizmodo.)
Breaking Down the Price of a Frozen Dinner
Who makes how much on that frozen dinner you bought the other day? Forbes breaks down the price of a Healthy Choice frozen dinner, made by ConAgra Foods. The food that goes into a $4.19 frozen dinner costs just 67 cents, or 16 percent of the retail price. ConAgra makes 54 cents profit, which is 13 percent of the retail price and 20 percent of the wholesale price. The retailer makes 34 percent gross profit, or $1.42. The remaining 37 percent of the retail price, or 56 percent of the wholesale price, goes toward wages, packaging, shipping and other expenses.
Adding zeros, or even adding a comma, can make a price look more expensive. For example, people often perceive $5,000 as more expensive than $5000, without the comma. Changing $5,000 to $5,000.00 can add yet more perceived value.
People can remember exact dollar amounts better than dollars and cents, making them more likely to compare such prices to those at other stores.
Free Gifts May Not Be Free
Stores sometimes offer a free gift with the purchase of an item. Think about the items separately. Is the free gift useful to you? If not, then you're getting a gift with no value, which isn't a gift at all. If it is useful, then how much do the two items cost, and what would you be willing to pay for them separately?
Grocery stores commonly price post prices for multiple items, such as oranges at three for $2, and customers often buy in those multiples. That's okay if you'll go through them in a reasonable time. Think about how many you actually need, and buy that many.
Consumers are also suckers for purchase limits. If there's a sale on an item and you can buy no more than three, then a lot of people are going to buy three. Again, buy only the quantity you need.
People assume that multipacks cost less per unit than smaller packages. This isn't always the case, and shoppers don't always compare. Supermarkets generally post unit prices on shelf tags. For example, a 32-oz bottle of detergent might cost 9.3 cents per ounce while a 20-oz size might be 11.5 cents per ounce.
Sometimes unit prices aren't comparable. This seems to be common with paper goods, in this writer's experience, with paper towel prices being fiendishly difficult to compare.
The shelf tag for one package of paper towels might show the cost per sheet—and sheets vary in size between products—and another the cost per square foot. You're on your own in this case, with your best option probably being to bring this to the attention of store management.
It can also be difficult to compare produce prices. Loose oranges might be priced individually, and bagged oranges by the pound. In this case you will need to compute the unit price in the bag, compare the size of those oranges to the loose ones and take your best guess at which is the better price. Bring a calculator if you're not good at math. If a bag of 9 oranges costs $3.99, then the price of each orange is $3.99 divided by 9, or about 44 cents.
Mobile Shopping Apps
A variety of apps can make smartphone and tablet computer owners more savvy shoppers. You can use some apps to build a shopping list by scanning items at the store or at home. Apps also make it possible to compare prices, share shopping lists and back them up to your computer.
An iPhone app called Coupon Sherpa helps you find coupons on the internet. OurGroceries enables you to sync shopping lists with your roommate or family. If you buy an item on a roommate's list, check it off and it will check off on that person's list as well.
These are just a few of many shopping apps available for the iPhone and other smartphones. You can also buy apps that provide nutritional information upon scanning an item's barcode.
Think before you buy an item at a sale price. Does it still cost more than a comparable item? Consider the quality of the sale item and compare it to products of the same type. If its quality is better, is that useful to you? If it doesn't matter, then you might do better with a regularly priced item that costs less. Do you need the item at all? If not, then keep walking.
Capturing the Senses
Supermarkets can appeal to various senses. Think about these cues and use your mind to decide, rather than your eyes or nose.
You often encounter mouthwatering smells, such as those of freshly baked bread, spices or chocolate, for example. Stores with kitchens may entice you with the look and scent of rotisserie chicken or other prepared foods.
Popular products and those with premium prices or fat margins will frequently be displayed at eye level. Merchants often display three items in a triangular formation. The product in the center is usually the most expensive, and in this display it usually looks more appealing than the other two. Look at the products above and below eye level and you might find something that works well for you and costs less.
Large stores almost always play music. The type of music can affect the way we shop. Faster music tends to cause shoppers to make selections and finish shopping more quickly, notes Sanders in his blog, RIMtailing. Music with lyrics causes us to rely more on habit and shop more mindlessly. More noticeable music dissuades shoppers from arguing themselves out of a purchase. Customers are more likely to try new brands or products if music is unobtrusive or is not played. Certain types of music can establish a personality that will draw a desired type of customer to a store.