Study Finds 'Retail Therapy' Actually Works

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A customer makes a transaction at an American Eagle Outfitters Inc. store in San Francisco, California, U.S., on Wednesday, March 6, 2013. American Eagle reported adjusted fiscal year 2012 earnings for the 53 weeks ended February 2, 2013 of $1.39 per share, a 43% increase from fiscal year 2011 adjusted earnings. Photographer: David Paul Morris/Bloomberg via Getty Images
David Paul Morris/Bloomberg via Getty Images
Ever find yourself hitting the mall or clicking around on eBay to cheer yourself up after a bad day? A new study suggests that so-called "retail therapy" actually has real psychological benefits.

Two professors and a PhD student at the University of Michigan's Ross School of Business set out to find out why buying stuff tends to cheer us up. In one experiment, the researchers gathered 45 female undergraduates, showed them a movie clip of a bullying incident, gave them the option of buying a snack, then asked how they felt. Those who bought a snack said they felt better than those who skipped the snack.

In another test, subjects viewed another depressing clip, and were then randomly assigned one of two simulated shopping scenarios. The group that had more of an opportunity to choose the products they liked were found to be happier after 'shopping.'

The first test suggests that buying something does indeed lift your spirits. And the second suggests a real explanation for why that might be the case: There's something about the act of choosing that makes you feel better.

"When it comes to alleviating sadness, actively choosing between products is essential, even if those choices are hypothetical," said professor Scott Rick in a press release announcing the results. "Shopping is a natural, easy vehicle for choice. There are other situations that afford opportunities to choose and restore personal control, but they may be less tempting and harder to find than the mall."

That doesn't mean that retail therapy is necessarily healthy -- racking up credit card debt every time you have a bad day could very well lead to even more bad days down the line.

But as Rick notes, the participants in that second study weren't actually buying anything -- it was a simulated shopping scenario -- yet they felt cheered-up all the same. That, he says, suggests that some kind of "imaginary shopping" might be your best bet.

So next time you're in a lousy mood, click around on Amazon for a bit and add some stuff to your shopping cart -- just don't click "buy" until you've had a chance to look at your budget with a clear head.

Matt Brownell is the consumer and retail reporter for DailyFinance. You can reach him at Matt.Brownell@teamaol.com, and follow him on Twitter at @Brownellorama.

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Study Finds 'Retail Therapy' Actually Works

Stores pull together color-coordinated items in matching or complementary hues as part of a thematic display designed to spark impulse purchases and multiple sales.

A retailer will spotlight a spring-themed bathroom display, for example, grouping blue, yellow and green shower curtains, bath towels, a rug and bath mat "so that it makes a really nice statement," Steve Ryman, the former vice president of home for both Sears and Kmart (SHLD), who now runs retail consultancy Ryman Consulting, tells DailyFinance.

The display is so nice that a shopper who's in the department simply to buy some new shower hooks suddenly thinks, "'It's time to refresh my bathroom -- and I can do it for $25!' -- and they throw it all in their cart," he says.

Everything from pineapples and palm trees to owls and peace signs have at one time or another captured the imagination of the American consumer -- prompting them to shell out cash for all manner of merchandise sporting the motif du jour.

Often a trendy motif starts at the high end, "then filters its way down to every store in the nation," Ryman says.

When a look is at the height of its popularity, retailers know shoppers are under its odd spell -- but only for a limited time. So while the going's good, they conjure up store displays that enshrine the motif, often featuring "totally unrelated products," Ryman says.

Accordingly, a shopper might find they've brought home a pineapple-themed wreath, bath accessory, doormat and candle.

Retailers use "punitive pricing promotions" to spark impulse sales, says Mark Cohen, professor of marketing in the retailing studies department of Columbia University's business school, and a longtime retail veteran who was the former CEO of Bradlees and Sears Canada and has held positions at the Gap (GPS) and Lord & Taylor. Such promotions include buy one and save 20%, buy two and save 30%, buy three and save 50% type sales.

Stores trick shoppers into thinking, "'the more you buy, the more you save' -- without regard to how much you actually need," Cohen says. "Consumers love these deals, which in fact reward their impulsive behavior."

Call it retail theater: Stores hire well trained and bubbly marketing experts to draw you to their product demonstrations by staging tempting, multi-sensory experiences.

The seduction begins with the overall look and feel of the demo area, with a display that "catches your eye," Ryman says.

Then stores further hook shoppers with food and drink. So a browser sampling, say, a new cheese cutter, is also fed "cheese and sausage, and at the same time they're selling you the cheese cutter, they're selling you knives, six new wine glasses and a bottle of wine," Ryman says. "Retailers maximize the sale by putting together as much related product as they can."

So the now semi-tipsy shopper who didn't even think he needed a cheese cutter has not only purchased that implement, but all the other accouterments, too.

Out with the old, in with the new: Stores send this message to shoppers by playing up new merchandise -- even when its newness is dubious -- by showcasing the goods in a fresh setting, prompting shoppers to make an unplanned purchase.

Retailers highlight presentations of current-season clothing, for example, "which by virtue of fashion, silhouette, or features and benefits, makes last season's merchandise appear to be dated or obsolete," Cohen says. "It plays to a customer who doesn't want to be considered behind the times, without regard to whether or not this new merchandise is actually better or truly different. This is why new season merchandise is invariably different in the way it's colored/packaged and presented so as to make last year's version less attractive." Retailers know that "new and engaging, if only by way of packaging, promotes impulsive buying," Cohen says.

And with consumer packaged goods like cereal, stores can accomplish the same thing "merely through the use of the word 'new' on a package, insinuating the importance of what is typically an insignificant reformulation."

Stores will also try to coax an unplanned purchase from a shopper's planned purchase, a common ploy at electronics chains. Brent Shelton, a spokesman for money saving shopping site FatWallet.com, tells DailyFinance, "Electronic accessories such as cables, as well as extended warranties, are two common up-sells."

"At many electronics stores, if you're purchasing a big-ticket audio-visual item like an HDTV, computer or home theater system, one retail tactic is to try to get you to buy over-priced audio-visual cables -- HDMI, USB adapters, connectors, Monstercables, etc. -- [as well as] speakers, remotes," he says.

These stores also push shoppers to buy extended warranties, which consumer advocates say are mostly a waste of money for a variety of reasons. For one, products rarely break within the extended warranty period, but instead after they've long expired.

What's more, "many credit cards will extend the warranty just for using their card," Shelton says. "And you should find out before swiping a big ticket item at the register."

These displays, featured in prominent areas on a store's selling floor, scream: Buy this merchandise!

Strike zones are "in-your-face, impossible-to-miss displays of merchandise that [the retailer] wants you to notice whether you're looking for something or not," Cohen says. The implicit message is, "It's new, it's special and you've got to check it out, and hopefully, [buy] it."

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