Cyber Monday. That is correct, holiday buying season is upon us.
Retailers have one objective this week–for you to shell out as much money in their retail/online stores as possible. Retailers use science, or even the study of human behavior, to change your spending decisions, to achieve this objective. Are retailers?
Create a sense of urgency
Folks are currently currently looking for good deals and the limited-time character of retailers’ discounts generates a sense of urgency in their opinion. We may be told that the huge sale is ending. Or that there’s a limited supply of a product which we are interested in. This works as nobody likes to miss out on an opportunityand that’s why time-limited discounts work. It’s human nature to seek out pleasure (reductions) and avoid discomfort (missing out on reductions).
Elicit favorable feelings of excitement
“Holiday Shopping Ads Are Geared Toward Brain’s Reward Center,” says Camelia Kuhnen, a behavioral economist at the University of North Carolina. These offers appeal to both the “fear anxiety centre” and the “reward center”–the part that’s a trigger once we’re happy, says Kuhnen. She asserts that our “happy-frenzied” state drives us to strongly enjoy immediate benefits and take on greater financial risk. Sales, coupons, and markdowns–legitimate just for a short period of time–help to construct excitement within our “reward center”. And thus sales soar.
“FREE!” Effectively to frame the “profits” for consumers
Daniel Kahneman, the Nobel Prize-winning author of Believing, Fast and Slow, has written about the psychology of both gains and losses. This topic applies to how retailers are currently utilizing science. OfferCraft’s CEO, Aron Ezra gives an extremely simple example to show.
Scenario 1: Sales associate # 1 is currently selling pants and then try to up-sell the customer on a belt that is 15.
Scenario two: Sales associate #2 sells the trousers at $75 and gifts the buckle as a free gift.
Not surprisingly, the “free gift with purchase” can create enterprising sales partner #2 transfer a great deal more belts than his counterpart. Why? Kahneman states that psychologically, declines are felt by us twice as mathematically as we feel profits. A gift that was free could be seen as a gain for the user; departure up a free gift will feel like a loss. We like receiving gifts. It seems good–and retailers know this.
This is just a brief list of all the ways we could be influenced–even if this is being looked for by us. Before you hit that ‘Buy’ button during cyber ask yourself how you were nabbed by them.
Within the next episode, we’ll look at examples of pricing approaches that work and why.
More information about this topic (and supply material to this article):