Ever pop into a shop to pick up a few things only to leave with twice as much as you intended?
You may not be aware, but the reason for this is not sheer chance, or that you were just feeling frivolous. The retail industry spends hard time and money into creating all sorts of devious little means to make you shop that bit extra.
Every penny you spend in their shop is not being spent at their rivals, and in the high stakes of today’s competitive market, "every little helps".
Here are eight ways that retailers dupe you into buying more.
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1. Scarcity effect
The facts: Have you ever felt pressured to purchase more of the same product simply because it isn’t well stocked and you’re worried you’ll never find it again?
It’s often intentional, and because it’s so effective, even online retailers are at it too – take Amazon.co.uk for instance; when you search for a product you can immediately see how many are left.
This is called the Scarcity Effect, explains Jessica Gillingham, of D-CODED Insights.
“Scarcity has an instinctive effect on humans and it inspires people to obtain something that they feel may be unavailable in the future, and this can be cleverly applied to consumer behaviour and decision making,” she said.
The fix: Scarcity marketing plays on the psychological effects of urgency, low supply and high demand. Resist the urge to panic buy, stock levels will rise and fall – your bank balance doesn’t need to.
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2: Special offers that offer poor value
The facts: Research from Competition and Markets Authority (CMA) found that 40% of groceries in the UK are sold on promotion, but why are supermarkets giving out such good deals?
“Retailers know that people are attracted by special offers, but, occasionally these may be misleading and work out more expensive,” says Natasha Rachel Smith, consumer affairs editor at TopCashback.
“For example, when a washing tablet deal is priced at £7 for a bag containing 50, but a smaller bag containing 20 is £2, a shopper buying three smaller packets would get 60 tablets for £6 – much better value.”
The fix: To ensure you are not paying more than necessary, check the unit price on the sticker (price per 100ml). In most supermarkets, food will be clearly priced by weight or volume across all stores to make it easier for consumers to compare products and spot the best deal.
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3: The compromise price effect
The facts: Research shows that shoppers are more likely to choose the middle option of a selection set rather than the extreme options.
For example, a consumer shopping for a flat-screen television will be given three options - the low-priced basic model, a high-priced top-of-the-line model with all the bells and whistles, and a mid-priced model with some extras - will most likely choose the middle option.
The result? The consumer walks away believing that they got a good deal – and the retailer got your cash.
The fix: Know your budget – and stick to it.
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4: The shopping environment
The facts: Nothing in a supermarket is where it is by accident. Every item on a shelf has been purposefully placed and the goal is to get you to buy – and spend – more.
Research shows that 60–70% of what we buy in the supermarket is entirely unplanned – chances are, the retailer has played its part.
One way that shoppers get sucked into spending more is down to high-margin departments like floral and fresh-baked goods being positioned near the front door, so you encounter them when your trolley is empty and your spirits high.
Similarly, retailers hide essential items such as milk and bread at the back of the shop so that you have no choice but to walk through the shop to get to them. What’s more, studies show that once we start walking through the ‘racetrack’-style aisles, we are conditioned to go up and down each one without deviating.
To make matters worse, just as you’ve mastered the layout of your regular store the displays are re-arranged again – and you are back to wandering aimlessly.
Even the way the shelves are arranged is aimed at making you buy more. Manufacturers pay a premium to place their brand-name products at eye or chest-level. Even children are targeted by retailers; their eye level is where you’ll find sugary cereal, sweets and magazines.
The fix: Shop with a list and allow yourself a maximum of one or two impulse buys. When looking for bargains, look to the top and bottom of shelves as this is where lower-priced stock is hidden.
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5: Same goods, same shop – but different prices
The facts: Supermarkets will also price the same goods at different prices, depending on where they are placed in the store.
If you are buying snacks such as nuts or dried fruit found in the snack area, they will be much more expensive than in the baking products aisle, while cotton buds can much cheaper in the baby aisle. For instance, according to the Sainsbury’s website, the supermarket’s own brand of Cosmetic Cotton Buds cost £1.50 for 200 buds. But a quick peek at the Sainsbury’s Little Ones cotton buds (300) shows they are priced at just 55p.
The fix: Always look at all your options before you hit the checkouts.
6: Free samples to make you spend more
Few of us can say no to free food. In fact, research suggests three-quarters of people who are offered a sample in a supermarket will accept it. But why are retailers literally giving away their goods?
According to The Atlantic, complimentary samples are sure-fire way to boost sales – with cash-and-carry giant Costco reporting a 2,000% increase from the freebies alone.
But the reason behind this is not that the products themselves are irresistible, but rather, because customers feel obligated to reciprocate to the person who has just given us free food.
The fix: If you are offered a sample, say no thank you. Your wallet – and your waistline – will thank you.
7: What a difference a trolley makes
The facts: Much like how a goldfish continues to grow to fill its container, the amount we buy is directly related to the size of our shopping trolley.
In fact, a US study found that when retailers doubled the size of their shopping trolleys, people bought 37% more.
The fix: Grab a basket so you won’t over spend.
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8: Keeping points
The facts: Loyalty cards are marketed as a reward for regular shopping, but there is an ulterior motive behind the retailer’s generosity – they want to collect data on how we shop, then use that information to sell us more products.
For every loyalty point or coupon that you earn at Sainsbury's, Tesco or Boots, the retailer learns about what you buy and when you buy it, where you live, your marital status and whether you have children. All this is compiled to create targeted offers, which entices you to spend more.
The fix: Unfortunately, simply opting out of a loyalty programme isn’t enough to keep your spending secret: retailers also track credit and debit card payment data and till receipts.
But, despite the popularity of loyalty schemes, research from Loyallive shows that a fifth of consumers never actually cash in their points. Make sure take advantage of the rewards on offer – after all, the retailer certainly is.
Next article: How to cut down your household expenses >>>
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