And how to prevent them turning into transactions.
According to Adweek, retailers have a smorgasbord of “mind games” they play on consumers every time they shop. Knowing these tricks, and more importantly, knowing how to avoid falling for them, can help you save more and make less impulse purchases. Of course if you own a retail business and aren’t using any of these strategies, test them out and see if they boost your sales!
1.The Instant Markdown
In essence, this occurs when retailers claim a hefty markdown from the retail or original price. Consumers would rush to purchase a good claiming to be 60% without considering whether they really are making a 60% saving. It is possible the retailers stepped up the price beforehand to make the illusion of a great saving.
Solution: The best way to ensure you don’t fall for this is to price spy. Although it is not possible to keep mental tabs on every good in stock, it is possible to have a general idea of basic goods prices.
2. Decoy Pricing
If you upsized a meal, or purchased a large drink just because it only cost $1 more, it is likely you have fallen prey to decoy pricing. As claimed by Redditor Chrisfrat, “If there is a small and a large size and the small is $2 and the large is $8, most people will buy the small. However, if you add a medium at $7, most people will buy the large because they say, “Oh, It’s only a dollar more than the medium.”
Solution: An economics rule of thumb claims that rational consumers only purchase goods until they are satisfied- ask yourself whether you truly want an upsized meal or whether you just want the satisfaction of a decoy saving.
3. The One Overpriced Option on the Menu
By having one or two items on the menu expensive, all other items will appear affordable in comparison. Consumers will believe that just by purchasing any item except the overpriced one, they will be making a saving.
Solution: For overpriced options often the best solution is simply being aware of it.
4. False Sense of Urgency
This typically appears in one of two ways:
- The product appears to have a very limited stock
- The product is only available for a limited time
The consumer would be coerced into a sense of urgency and feel obliged to make a purchase then and there for fear of missing out.
Solution: Because retail stock is often limited, this trick can be difficult to spot offline. However when online, say on a travel booking site claiming 20 other people are on the page now, precautions can be taken. By refreshing semi frequently, you can typically tell whether this number is genuine.
5.The Loss Leader
According to a 1987 research paper, consumers will purchase a loss leader because it’s rational, however while in store they will make many other purchases which make up for the stores loss on the loss leader. And when two thirds of purchases are impulse buys, having one reduced item to get consumers in the store is very clever marketing.
Solution: Try and get in and out of the outlet as soon as possible with only the loss leader in mind.