Bulk discounts, door-buster deals, two-fers, red-tag clearances,
members-only events -- sales tactics or legalized pickpocketing?
That depends on which side of the cash register you're on.
Even when you're the one leaving the store with a lighter
wallet, it's hard to feel like you've been had when you just scored
a "Super Saver! Lowest-Price-EVER! Today-Only!" bargain.
But did you really snag a bona fide deal? Or were you just
played? The difference between steering your own shopping cart and
having it pulled into an irresistible sales pitch is so subtle you
may never know.
The science of temptation
Your relations may be good at pushing your buttons, but they're
amateurs compared to "consumer/shopper insight specialists." It
started with Paco Underhill -- a shaman of shopping behavior -- who
in the late 1970s applied the science of city planning to the
retail trade. (His best-selling book,
Why We Buy: The Science of Shopping,
is the playbook for the field.)
Years of studying the hunter-shopper in its natural habitat have
enabled these retail anthropologists to play shoppers like chess
grand masters. For example, they know:
- Which way you'll turn after stepping inside the entrance (to
- How to get you to notice a new product (by placing it on the
shelf near a preferred brand).
- That touching leads to buying (which is why they leave out
samples and demo models).
- That simply putting a promotional sign announcing a "Bargain
Buy!" "Hot Deal!" or "wholesale price" near an item -- but not
actually reducing the price at all -- will convince us we're
getting a great deal.
Every single detail of your shopping experience -- the placement
of every shelf, box, sign, and restroom; the background music;
color of paint on the wall; words the staff use to greet you -- is
a precisely orchestrated merchant-customer dance designed to
achieve maximum sales results.
Deal or no deal? Can you tell the difference?
Even the savviest shoppers can get sucked in by the siren song of
. "No matter how much smarter or more experienced we have become,
there's still something called 'retail magic,' where someone is
able to put something out there in a way that makes us fall in love
with it and have to have it."
Consider the following five scientifically proven sales tactics.
Have you ever been hooked by any of these?
1. Welcome to temptation aisle
You know those Rolexes, designer handbags, and flat-screen TVs
displayed near the entrance of every Costco store? Is anyone really
going to walk in and buy a watch that costs as much as an economy
car on impulse? Probably not. But that's not really why store
designers place shiny, fancy stuff in the warehouse store's
All those tempting wares are there to trigger the pleasure
center of our brain. In other words, we walk into Costco and the
shopping high sets in before we've even put anything in our cart.
It's a subtle psychological sales trick to lower our spending
inhibitions and wine and dine us into reckless spending.
How We Decide
author Jonah Lehrer explains how merchandising tricks like these
actually alter our brain chemistry -- with the nucleus accumbens
(which pumps good-vibe dopamine into our brains) overcoming the
insula and prefrontal cortex (which fire up our rational,
number-crunching thoughts). "Whichever emotion you feel the most
intensely tends to dictate your shopping decisions," he writes.
You might hate yourself in the morning, but the only thing on
your mind at that moment is satisfying your covetous consumer
2. Spend more and save! (Or so you think.)
"Free" is a four-letter word that, once planted in our heads,
is hard to ignore. The moment our brains register that a bargain
can be had -- "Buy 3 and Get 2 for Free!" -- our willpower melts
away. We're hooked because, really, it's stupid to pay $3 a bottle
for two hand sanitizers when if we buy just one more, we can get
two extra bottles for
What a deal, right? Not really, says William Poundstone, author
Priceless: The Myth of Fair Value (and How to Take Advantage of
You just fell for a classic ploy pricing consultants call
"nonlinear pricing," whereby the more you buy the less you pay per
Most customers walk out the door with five bottles (at $1.80
each instead of $3, of course we do!). The store knows that we
will, so it prices that fact into the product before the sale is
even announced. "In many cases, the thriftiest shopper can be
persuaded to spend more -- all in the name of 'saving money,'"
3. New look, same price, more profit!
When a company needs to boost its bottom line, it often uses what
pricing expert Rags Srinivasan calls "price realization through
creative packaging." In other words, it unveils a "New Look!" to
disguise the fact that you're about to pay the old price for less
That's because shoppers are more attuned to price increases than
product volume decreases. Be particularly wary if the new container
is taller than the previous version -- there's visual trickery at
work. Changes in height are more perceptible than changes in girth.
We'll notice that the newly designed carton of Tropicana is taller,
but not that the package is also skinnier (and contains 10% less
juice than its predecessor at the same price). In fact, we might
even think we're getting more for the money!
4. How much is that Snuggie in the window? Who
The Snuggie, pet rocks, the Segway, Amazon's Kindle -- they're a
marketer's dream because there's nothing else out there like them.
With no peer products to use for comparison shopping -- or, in the
language of pricing pros, no existing "reference price" -- shoppers
have no idea if the price is right.
That gives marketers free rein to tell you what the product is
worth. They know that once a price is suggested (if it's not too
out of whack), it is forever ingrained in our brains that $29.95 is
a fair price to pay for an alarmingly unflattering house coat, so
when it's marked $19.99 we must be getting a great deal, or at
least that's what we've been led to assume.
5. Markdown mania ... these deals are really
Manipulating pricing perceptions is a robust business -- so much so
that companies hire "price consultants" to mess with our math.
Is a $1,049 flat-screen TV marked down to $899 a better deal
than the $879 one because it used to cost more? Most people think
so; we assume higher price is another way of saying "better
quality," Poundstone says.
If you're not convinced that TV is actually a good deal, you
will be after you browse a little longer. To get your rational
brain to put its guard down, retailers use store signage and other
cues to repeatedly assure you (and that guard dog in your brain
known as the insula) that, yes, indeed, you are getting an awesome
So relax. Your brain has just been lulled into believing it got
Don't buy the hype
Back away from the checkout counter with no regrets -- and a fatter
wallet. Here's how:
True to its name, The Motley Fool is made up of a motley
assortment of writers and analysts, each with a unique
perspective; sometimes we agree, sometimes we disagree, but we
all believe in the power of learning from each other through our
Fool.com writer Dayana Yochim is a recovering bargain shopper
who still occasionally falls off the wagon. The Fool's
is a bargain at twice the price.
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