As Black Friday and Cyber Monday deliveries have hit thousands of homes this week, buyer’s regrets have begun for some.
Our love of a bargain can sometimes mean that we either spend more than we expected, or that in the pursuit of value, we end up with something we don’t want or need.
Big events like Cyber Monday are the creation of retailers with one goal only: to make money. There is no law against that, but to what extent do they manipulate consumers?
We know there’s a science in grocery store layout, designed to make us spend more and buy things we might not have planned. So it is reasonable to assume that the same is true for online events.
A simple ABC study of cyber psychology would suggest that online retailers know which buttons to press. Experts have studied human behavior in this field and there are certain factors that come into play when we shop online that increase the likelihood of us making impulse purchases.
Dr. Nicola Fox Hamilton is an expert in cyber psychology. She thinks retailers have brought together all the elements that encourage us to spend more and think less.
Dr. Fox Hamilton said, “Around things like Black Friday or Cyber Monday, there are a lot of sales and offers and price points are something that really encourages people to buy.
“When you have a sale or offer for a limited period of time, you also have scarcity and we like things we can’t have.
“Add in urgency, and those two things together really take precedence over our rational decision-making. It brings confusion, emotions, and fear into the process, so we may not make the rational decisions that we normally would.”
Wow! That sounds like an extraordinary recipe. Let’s take it apart.
Price points encourage us to buy – that’s the hunger for a bargain. By limiting the duration of the sale, two things arise: urgency and scarcity.
So we’re really looking forward to a bargain, we need to get it fast, and things are selling fast, so the human brain is screaming “BUY NOW”. When you realize that all of these factors, in turn, cause confusion and fear, it sounds quite manipulative.
But aren’t we smarter than that? Consumers have been looking at sales for decades. Yes, there used to be sales in January and summer, the two times of the year when you could get a bargain – often massive discounts, stores clearing stock to prepare for new seasonal lines.
But with multiple choices of where and how we shop now, hardly a week goes by where there is no sale anywhere. So don’t consumers develop immunity from the hype?
There is some evidence that as people become more aware of marketing strategies, they tire and are less likely to fall for them. But price is our Achilles heel.
Looks like we just can’t resist a bargain. So while we know that many of the Cyber Monday or Black Friday deals were available for weeks, if not months, we still jump in.
Dr. Fox Hamilton said it’s pretty simple psychology. “People are triggered by the Black Friday communication, the pricing also triggers them, the diversity of items is also an attraction, and they are still likely to be sucked in.”
That buyer’s regret thesis is also based on science. Have you ever stood at the ice cream stand in the cinema, or watched a row of beer taps in a bar, considered your choices, carefully considered your options, only to immediately regret your decision as soon as the ice cream or drink hit you? lips?
There is a reason for that. Apparently, the more choice we have, the worse the choice we actually make. So, does the wall of 100 TVs featured in the electronics superstore make sense now?
Dr. Fox Hamilton said, “Six choices are about optimal for people and when it gets over 15, our decision-making processes really start to fall apart and we make worse choices and we are less happy with them.”
What? So too much choice is a bad thing? Apparently so.
Dr. Fox Hamilton continued, “We are more likely to regret those choices and feel a sense of loss about the products or the things we had to let go of in the trade-off to buy the thing we decided to buy.
“Having access to so many choices, along with the urgency of a sale, which is limited in time, can lead to bad decision making.”
So in the case of online sales, it was never so appropriate. “When we make decisions online, there is an unprecedented amount of choice in products. People are designed to make decisions with few choices.”
But the retailers see it differently, they say the industry is adapting to a rapidly changing trend in consumer behavior. Our desire to stay safe and avoid crowds, the Covid restrictions and other factors mean that far fewer of us visit malls or major stores.
We adapted very, very quickly to the online and click and collect culture. Irish online retailers have seen a 130% increase in sales this year.
A few years ago, Black Friday saw 70% of sales go to UK or international sellers. This year it has dropped to 60%. People choose Irish sellers – if Covid has done one thing, it has made us more appreciative of what’s on the doorstep.
I well remember visiting about 10 major stores trying to buy a thermometer when the first “lockdown” started. They were all sold out, nothing to get. The small community pharmacy around the corner had dozens of them. We have all had that experience in recent months.
The way we spend is proof of that. It’s a struggle for big chains to deal with. But some might say it’s leveling the playing field. But even when we visit stores now, apparently we behave differently. It’s a development that hits the bottom line and retailers don’t like it.
Duncan Graham heads Retail Excellence, which represents thousands of retailers in Ireland. He said consumers are now coming to the stores informed, with research done.
They know what they want, get it and go. Browsing seems to be on the decline.
He said shortening the “residence time” is a problem. “The average transaction value is affected, the average transaction value is slightly lower.
‘Because people don’t spend time in stores and they go get one or two Christmas presents and they leave.
“In the past they would have stayed longer and maybe spent more, and of course it didn’t help that cafe and restaurants weren’t open. So there hasn’t been the pull of getting people to shops.”
So if they can’t reach us in the store and spend more money, aren’t things going to have to change?
Duncan Graham said yes. “Less time is spent in stores, much more research is done by consumers before entering the store, and they have a wide choice of outlets and ways to buy.
“It’s gotten a lot more complex for retailers, we have to go online to our customers, we have to use all the social media channels to promote ourselves, as well as all the traditional ways of reaching customers.”
Most retailers smile when you ask them about the tactics of making us spend money. Promotions at the end of the aisle. The fact that certain products that we all want, such as bread and milk, are not just in the door next to the till.
Their strategy for making us spend money is well thought out and based on decades of consumer behavior and research. When we stop spending time wandering around, it gets tricky.
New ways to reach consumers are essential. The storefront brands we all know go online in large numbers. There is even government funding to boost your online presence. It has saved countless businesses during the toughest period retail has seen since the economic collapse in the mid-2000s.
Retail is difficult. Only the fittest survive. But it faces its greatest challenge yet and everyone knows it will have lasting change.
Duncan Graham is very candid about that. “We are not going back to 2019, we are going to change drastically”.
He’s focused on helping his members adapt and survive, but he’s thinking about a whole bigger picture. “We are not going back to where online is now, it will only grow.
“The challenge will be what we do with our city and city centers, because space will inevitably be created in those areas.
“How we bring the customer back in to shop and live in the city centers will be crucial and should be part of the government’s plan for the next five to ten years”.
When retailers plan for empty retail units in cities, the future is worrying. This also poses a challenge for retailers.
The basic benefits they have relied on are no longer as effective. Large luxury stores and even supermarkets are designed to make us spend money. The environment and environment in luxury stores influence us to buy expensive things.
So when we shop online we avoid that, right? No, uh, wrong! Dr. Fox Hamilton also did the homework on that.
“With a very seamless online shopping experience, where your credit card information has already been entered and your address saved from previous shopping experience, this is extremely fast and hassle-free”.
We like it when it’s simple, but that love for seamless shopping has a deeper psychology. “The less friction there is, the less likely you are to get out of that process and think about it for a moment. There is also the fact that the further away we get from paying in cash, the more likely we are to spend more. to give. “
So wait, if we don’t really feel the nuts slip through our fingers, are we spending more? Yes, said Dr. Fox Hamilton.
“When you hand over real money, there is a pain factor to that, you can see that the money is going out of your wallet and that makes people regulate their spending themselves.
The farther you get from there, the more you can spend, so if you have to take a credit card to use it, that’s a step away from the cash transaction.
“But if you’re using PayPal or Apple Pay, or your credit card information has already been saved, you’re even further away from handing over cash, so it can be easier to overspend.”
Irish consumers spend about EUR 10 billion a year online. 90% of us buy online. All research indicates that this is increasing.
We can be as careful as we want to, most of us are smart and can see an apparent diminution from a real one. Regardless, we have one major drawback: we are human.
We are pre-programmed to fall victim to certain things, especially the love of a bargain!
But there is one more thing that is more important than saving money or making sure we don’t get cheated. While many of us growing up have learned that material goods don’t matter, for some of us they just do.
Of course, money doesn’t make the man or woman good, but it can help us a little bit to have fun in dark times.
Many of us use shopping as a means of regulating our mood. Retail therapy is not just an expression. The last word for the person who knows more about this than most, Dr. Nicola Fox Hamilton.
“Because people have been going through a rough time with the pandemic, it is possible that they are shopping more online as a result,” she said.
“People can use shopping to boost their emotions, but they also sometimes use it to deal with sadness or negative moods, applying emotional regulation through shopping.”
An afternoon of retail therapy? Amen!