How retailers are making you spend more money than you planned and how to avoid it
With Singapore being one of the most popular shopping destinations in Southeast Asia and the fourth most expensive city to live in, especially for expatriates, it’s not hard to spend a lot of money here.
The Department of Statistics in Singapore released a report stating that in March of 2017, retail sales decreased 0.3% since the month of February. Why is this? Are consumers finally realizing that their favorite stores may be exploiting them and their wallets? Most importantly, how can we avoid it?
Whether they realize it or not, customers are constantly being swindled by retail stores and they have been for ages. With inventions like the shopping cart, which allows them to carry more items, consumers are being encouraged that, in this case, less is not more.
In fact, stores all over have developed numerous strategies on how to get customers to spend more of their money.
They manipulate your five senses
Have you ever noticed on a trip to your local grocery store or supermarket that there were freshly baked goods waiting for you right as you entered? Maybe you did really well at the gym that morning, and then you walk inside and suddenly smelt a batch of freshly baked cookies. You think to yourself, “OK, one cookie won’t hurt”, but you end up buying the entire box instead. Don’t worry, you are not alone and this is no coincidence.
These stores actually want you to rely on your five senses instead of your grocery list that you compiled that morning. They strategically place these items towards the front so that your parietal lobe (the part of your brain that controls your senses) and salivary glands are stimulated.
And it’s not only grocery stores that have picked up on this tactic, regular retail stores have as well. By placing colorful and exciting items at the entrance or near the check-out line, retailers have created a visual playground for the consumer to immerse themselves in.
They limit your options
Going to a store and seeing millions of options for one type of item can be overwhelming. This is why retailers try to limit the number of choices a customer has. In this case, less really is more, but unfortunately not for the consumer. According to a study done by Columbia University, customers are actually more willing to buy an item that has fewer options. The experiment entailed setting up a table with various types of jams outside of a local Californian grocery store. Two researchers disguised themselves as employees and held one tray of 6 and one tray of 24 flavors of jams, offering them to people who would pass by. To the researchers’ surprise, only 3% of the customers who sampled the 24 flavors actually purchased the item. Meanwhile, 40% of the ones who sampled the 6 flavors decided to buy it.
They try to put you on cloud nine, literally
$1.99, $4.89, $99, even $free.99. Nine has become the magic number of retail. Why are most items priced with the number nine? It’s because, believe it or not, the left-most digit of the price affects our perception, making us believe the product that is under sale looks cheaper than it actually is. This has since been known as “the left digit effect”. In a famous experiment conducted by The Massachusetts Institute of Technology and The University of Chicago, three different versions of a dress were put up for sale at the prices of $34, $39, and $44. The dress that sold the most units was the one that was priced at $39.
They trick you into shopping online
With the consistent rise of technology, many people have resulted to online shopping to find better deals. However, what these people might not know is that, here too, they are being taken advantage of financially.
“Free shipping”, we all get excited when we see those two words pop up on our screens, but how free is it really? According to The Walker Sands Future of Retail report, 9 out of 10 consumers say free shipping is their number one incentive to shop online. On most websites free shipping requires a minimum amount of money to be spent before it is applied. On average, an online customer has to spend at least US$82 on products or merchandise in order to receive free shipping.
How can you avoid this?
You might be asking yourself, “So, how do I stop myself from falling into these retailers’ traps?”. Don’t worry, the solution is very simple and there are many ways to do it.
First you might want to make a list of what you intend to buy from that store. Once you arrive at the store, ask a salesperson where those specific items are located. This will prevent you from browsing through random isles, distracting you from your original task.
Another solution may be to check the store’s website or download their app (if they have one) to see if they have coupons or if you are eligible for a discount. There are also retail apps and websites such as Fave and RetailMeNot that give you coupon codes for free.
The trick isn’t necessarily to outsmart the retailer, but rather to be a smart consumer.