Retailers use 3 psychological tricks to get you to spend more money

How Big-Box Stores Get You to Spend More

The retail landscape is more competitive than ever as consumers spend on experiences like restaurants and vacations more than material possessions.

This shift in consumer habits has led to a wave of discounting from retailers.

Aron Ezra, CEO of marketing software company OfferCraft, recently published a list of common psychological tricks retailers use to drive sales.

His piece, first published on industry newsletter Retail Touch Points, offers a glimpse into how brands get you to spend more money.

1. The "decoy effect"

High-end kitchen retailer Williams-Sonoma once struggled to sell a $275 "bread bakery" machine, finding that consumers were choosing to buy cheaper appliances instead.

To drive sales of the bread machine, Williams-Sonoma started offering it alongside a larger — and more expensive — version. Once consumers saw the more costly option, they began to believe the $275 version was a steal.

"This is a classic example of the 'decoy effect,' a marketing principle first demonstrated by Duke University researchers in 1982," Ezra writes. "They found that a product will be perceived as more valuable if the buyer can compare it to a less desirable model on the shelf or a web page."

2. Giving you a "gift"

Retailers use "gift psychology' to get you to spend more.

Ezra uses a story about belts to illustrate the point:

"Now say you're buying a pair of pants at this store. Typically the sales associate might try to upsell you by saying something like, "Would you also like to buy a $15 belt with your $60 pants?" That will work for some people, but not most of us.

But now imagine a different sales associate says, "These $75 pants come with a thank you gift: Your choice of one of these belts. You can take any of these, or you can give back the belt to reduce the price a little."

Instead of deciding to make an additional purchase, you're now asked to actively give back a gift. This enterprising sales associate will generally sell a lot more belts than his counterpart."

3. The illusion of choice

Choice can be a powerful factor in getting consumers to spend more money.

Ezra cites one company that ran a promotion offering customers a $100 credit toward specific products. Then, they offered them the choice of a $50 credit toward a different product.

One of our retail clients offers a fascinating example of the power of choice.

"The results were startling: more than one third (34.9%) of the customers swapped the higher value prize for the lower value prize on a different product," Ezra writes. "The customers were happier, while the retailer cut promotional costs significantly and generated invaluable insights about the preferences of their best customers."

Now check out the best money-saving online shopping hacks:

Money-saving online shopping hacks
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Money-saving online shopping hacks

1. Clear your browser history

Some retailers might sneakily increase prices based on your browsing patterns and demand - so make sure to always clear your history and cookies before shopping! 

Photo credit: Shutterstock

2. Use an alternate email address

When you log in to a retailer's site with a new email address, retailers will often welcome you as a new customer with exciting new promotions and discounts. 

Photo credit: Shutterstock

3. Note price changes throughout the week

Another pro tip: Prices and deals can fluctuate based on the day of the week. For instance, if you're purchasing a flight, monitor prices for around a week to see if they take a dip on any particular day before purchasing. 

Photo credit: Shutterstock

4. Let items linger in your cart

Here's a hack: Add items to your cart, but let them sit for 24 hours before purchasing. The retailer might attempt to lure you back with additional discounts.

Photo credit: Shutterstock

5. Check out multiple sites

Do some research! Don't settle for the first price you see - poke around on a search engine and find the best deal. 

Photo credit: Shutterstock

6. Bargain with customer service

Use customer service to your advantage. If you ask (politely!) about an expired coupon, you'll often find yourself pleasantly surprised by an extension or new code! 

Photo credit: Shutterstock

7. Don't purchase impulsively

Try this shopping hack - don't buy that shiny, new toy right away. Step away for a few hours, and if you find yourself itching to go back and click 'purchase', then you know you won't regret your investment!

Photo credit: FogStock

8. Avoid shipping fees

Take advantage of free shipping! If you are a few dollars below the free shipping price point, add a low-cost filler item you need anyway (like socks!) and make the math work out in your favor. 

Photo credit: Alamy


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