Shopping Mindgames: Tricks Retailers Use to Make You Overspend and How to Beat ThemNov 16, 2018
Most shoppers know that buying cut up fruit in the produce department costs way more than just buying the fruit and cutting it up yourself. Did you know, however, that where items are placed in the store make a difference, too? Not only where they are placed but the price of items strategically placed around and in reference to similar items can trigger a shopper’s “buy” button. It’s meant to. Here are a few clever tricks retailers are going to use to get you into their stores and spending more money this holiday season.
Leaders: Leaders are used all year round but are extremely effective during Black Friday and the Holiday Shopping Season. A leader is a low-priced item that is advertised prominently to draw you into the store. Most often, there are only a few of these items available (see limited quantities) but their extremely low price draws you in.
“Door Buster” items are usually leaders and usually have a very limited quantity. Sometimes, a store is willing to take a loss on a leader because they know that if they just get you into their store, you’ll spend more elsewhere. If a store fears you may not buy enough, a minimum purchase may be required. This time of year, though, you’re likely to see another tactic thrown in with the doorbuster: anchor pricing.
Anchor Prices: Anchor Prices trigger your psychological “buy” button by making you feel as if you’re getting a great deal. Stores often do this by placing a high ticket item first with a lower ticket item next to it. The high ticket item becomes your reference point or your anchor. Your brain will see anything less expensive as a bargain. This is because our brains must have a reference in order to place a value on anything. We need something to compare it to in order to make any decision. We shop this way. We even drive this way. You are your own anchor. Anyone who drives faster than you is a mad man and anyone who drives slower is a slowpoke. It’s just the way our brains work.
In the above ad, the anchor is the $798 television. The one we would most likely buy would be the $448 one, even if our budget was only $300. We would talk ourselves into the “value” of an extra 15-inch screen because it’s only 10 inches less than a television priced $350 more. Retailers know this. Notice, however, that the price difference is about $80 between the three lowest-priced televisions. I would guess that there’s only about an $80 difference between the $248 one and the $448 one in value, too. They most likely set the price so they make $100 more knowing that we would buy it anyway, seeing the relative value with that anchor. The real profit is most likely to be highest on that television.
Limited Quantity or Time: This will get a shopper every time. If there is a limited quantity, our minds go crazy! We have to buy it now. It won’t be available after this. The fear of lack and the fear of missing out keep our brains so busy that we don’t even have time to contemplate whether or not we need the item. We go straight to a zombified “must get now” mentality. Beware! You’ll see this tactic used on purpose throughout the Christmas season and this is when you’ll see people paying hundreds of dollars more for a Tickle-Me-Elmo type item on e-Bay. Ridiculous! Mainly because the limited quantity was usually done on purpose to create just this type of frenzied buying. Shoppers will justify their spending more for the item, too, simply because of a limited quantity. After Christmas, quantities miraculously reappear. (Note: Webinars have a ticking clock and sellers use the “for the first 10 buyers” tactics because this works like a charm.)
Placement: The placement of items, especially in regards to anchors, is important. Stores want to draw you deeper into the store and keep you there longer, so placement of items is crucial. The longer shoppers stay in a store, the more they spend. Every single display and every single placement of an item is on purpose. Items on endcaps and at eye level are placed there for a reason. Be aware and be on task.
How do you overcome store tactics? Obviously, there are many other things that affect shoppers, including smells and lighting, but the tactics I listed are the ones you’ll mostly encounter while holiday shopping. Now, it’s time to learn how to beat these tactics. While just being aware of them is half the battle, it’s easy to forget when you are in the throws of battle (out there shopping).
Follow These Rules
My number one rule when Christmas shopping is “No Shopping for Yourself.” I know. It’s harsh. However, that is exactly where most people overspend. That big-screen TV looks amazing but the fact is – you don’t need a big-screen TV and you are supposed to be shopping for others, not yourself.
Ask yourself, “Is this on my list?” If the answer is “no,” don’t even look at all the features: just walk on by. We make our list at home and we stick to only what is on the list. Be a disciplined shopper.
Stick to your list and stick to the price point you decided on BEFORE you went shopping. Knowing what you want and how much it usually costs is more than half the battle. You’ll be walking in the store fully armed with knowledge and it’s a dangerous thing…for retailers. You will know if an item is over-priced or marked up just to be knocked down. I love using the app “Honey” online to see exactly what the price of an item has been in the last 90 days. It helps me be a smarter shopper and it also teaches me to wait for it. That price will be low again. Do I really need it now? It’s doubtful. Research prices before you buy.
One last thing: Keep receipts for everything. Why? Because you will make a few purchases you regret later or you might overspend or go over your budget. Whatever the reason, keep your receipts and take the items back. Return anything you don't want or need before Christmas because the lines are incredibly long afterward. Keep receipts. Take it back.
Now you are way ahead of all the other shoppers! No need to thank me. Just be diligent and make me proud. Merry Christmas!
Michelle R Russell
© The Prosperity Process, LLC
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