Have you ever gone into a store and spent way more than you’d planned? Chances are it wasn’t that your money was burning a hole in your pocket. It’s more likely that the store employed one or more marketing techniques to get you to part with your money. Here are ten ways stores trick you into overspending.
10. Store Layout
There’s a reason why dairy products sit at the back of the grocery store. These items are considered to be “essentials”–you know, the stuff that most people have on their shopping list. The same goes for bread and produce. They usually sit at one end of the store or the other. In between are the aisles with nonessential items–those things we buy impulsively. In order to get to the products you need, you have to walk past the aisles with the stuff you don’t need, which causes you to (impulsively) buy items that aren’t on your list.
Some stores also have layouts that intentionally disorient shoppers. This layout, known as the Gruen transfer, is aimed at slowing you down in the hopes of getting you to make some impulsive buys. What basically happens is that you get so confused by the store’s layout that you forget what you came there for in the first place and end up buying a bunch of stuff you don’t need.
9. Pricing Strategies
There are quite a few of these, so we’ll just jump right in.
Decoy Pricing: This tactic boosts the sale of more expensive items by making them seem economical. An example of this is when you order a medium drink and the cashier asks you if you want to get the large drink instead because it’s only a few cents more.
The “Baby Bear” Effect: This is actually similar to decoy pricing. Here’s how it works. Companies will place expensive items next to similar but slightly cheaper items. Obviously, you choose the less expensive item, thinking you’ve just scored a good deal. But, what you don’t know is that the retailer has inflated the price of the more expensive item to make you think the less expensive item is discounted.
The Overpriced Item That No One Buys: Also similar to decoy pricing, this tactic involves creating an overpriced item to make everything else look cheaper. This technique is often used in restaurants.
Instant Markdowns: Also known as anchoring, this tactic involves setting an “anchor” price and marking it down significantly. For example, you’d be more willing to buy a shirt that’s been marked down from $90 to $45. Even if you wouldn’t normally pay $45 for a shirt, you’d still be willing to pay $45 in this instance because you think you’re getting a good deal.
Odd-Even Pricing: According to this strategy, consumers are more likely to purchase a product with a price ending in an odd number that’s just below an even whole number. For example, consumers find a product more appealing at $9.99 than at $10.00. That’s because we have a tendency to round prices down, so $9.99 feels closer to $9.00 than it does to $10.00.
Dropping the Dollar Sign: Restaurants do this to get you to spend more. In fact, a Cornell University study found that leaving dollar signs off restaurant menus gets people to spend 8 percent more.
BOGO Sales: The “buy one, get one free” tactic is pretty powerful. In fact, companies use it to get you to buy more than you intended. “Tracking down a second item of equal or lesser value can be a chore, often leading you to buy something more expensive than what you’d actually wanted,” wrote Adweek.com.
8. Free Stuff
According to the Journal of Consumer Research, when shoppers are given free treats, their desire for nonfood luxuries increases. For example, if a store is handing out free chocolate, your desire for high-profit electronics, expensive watches and designer clothing increases right after you eat said chocolate.
Free trials get us to spend more, too. But, it has nothing to do with a desire for luxury items. It has more to do with laziness and indebtedness. We often don’t want to go through the hassle of switching off a new service we got up and running via a free trial, so we just decide to continue it. We also feel indebted to the company who gave us the free trial. Since they let us use their service for free, we feel that we owe it them to buy their service.
7. Store Ambiance
Many stores use sensory marketing to get you to overspend. Researcher Martin Lindstrom tried this technique in an appliance store. He pumped the smell of apple pie into the store and sales of ovens and refrigerators went up 23 percent. He also tried sensory marketing in a wine shop. He alternated between German and French music and found that the music influenced which bottles customers bought.
Another researcher found that just about any noise, not just music, made people overspend. For example, noise distraction made people more likely to buy fancier sneakers.
6. Limited-Time Offers
Have you ever wondered why, despite its success, the McRib is available for only a limited time? Limited-time offers create a sense of urgency and cause buyers to make impulsive purchases. Retail stores do this by offering sales prices that last for a week. Appliance stores and car dealerships do this by offering short-term deep discounts or financing plans. In addition to selling you a heavily discounted item, they’ll also try to push a bunch of upsells. For example, a shoe store salesperson might also try to get you to buy socks, lanyards and other items in addition to the sneakers you’ve just purchased.
5. Rude Salespeople
You’d think that an encounter with a rude salesperson would make a person want to hang on to their money–or at least spend it somewhere else. But, this tactic actually works in high-end stores. According to Time magazine, a study found that customers are more likely to buy expensive products after interacting with a snooty salesperson. “It appears that snobbiness might actually be a qualification worth considering for luxury brands like Louis Vuitton or Gucci,” Darren Dahl, a marketing professor at The University of British Columbia’s Sauder School of Business, said in an article published by the university. “Our research indicates they can end up having a similar effect to an ‘in-group’ in high school that others aspire to join.”
Taking a survey can make us more likely to buy–and less hesitant to buy–a product from a company afterwards. According to Harvard Business Review, there are a number of theories that could offer a possible explanation. One, satisfaction surveys appeal to our desire to be coddled and reinforces positive feelings we may already have about a particular company or product. Two, surveys increase our awareness of a company’s products, and that can encourage future purchases. Three, being asked for our opinions can cause us to form judgments that otherwise wouldn’t occur to us. These judgments can influence buying behavior later on.
3. Gestures and Physical Contact
According to a study published in the journal Psychological Science, when a saleswoman touches a customer, on the shoulder for example, the customer may unwittingly end up spending more money. This includes both male and female customers. “Minimal physical contact can increase people’s sense of security and consequently lead them to increased risk-taking behavior” like impulse buying, the study read.
Also, mimicking the gestures of others, a.k.a. mirroring, can help create powerful connections with others. That’s why skilled salespeople do it. Mirroring helps them engage quickly and more deeply in conversation with customers. It helps them understand the customers a little more as well. In fact, a 2011 study found that retail salespeople who mimicked their customers’ behavior sold more products and left customers feeling more positive about the store.
When someone does something for you, you feel obligated to do something in return. Like the free trial example mentioned earlier, restaurant customers are also more likely to want to do something in return for generous servers. For example, research done by psychologist Robert Cialdini found that when a restaurant server brings a mint along with the check, people will tip higher–3.3 percent higher, to be exact. And, the more mints they leave, the bigger the tip. Two mints got the server a 20 percent bigger tip than they would have gotten with no mints at all!
1. Gift Cards
While gift cards might seem like free money, they’re actually yet another way for stores to get you to spend more than you intended. According to Investopedia, half of consumers spend more than the card is worth. Not to mention that at least one-third of consumers never even use the gift cards they receive. Either way, the retailer makes a profit–whether it’s consumers spending more than the card’s value or consumers spending money to purchase a gift card in the first place, it’s a win-win situation for them.
Now that you know what your favorite stores have been up to, defend yourself against these sneaky tactics by taking the time think about what you’re buying before you buy it. Thanks for reading, and happy shopping!