Science of spending

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Science of spending
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Hundreds of people in a mob trying to enter a store

Is this mob about to enter retail hell or retail heaven?

Christmas is pending, and it’s time for spending! Even if you flunked Black Friday and missed Cyber Monday, we expect you’ll be watching cashiers ring up stuff you want. Stuff you believe others want.

And stuff nobody in their right mind would want.

Marketing is focused on getting us to spend money. So how do marketers find new ways to poke holes in your wallet?

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man works on computer behind window that has a sign saying-Today is...I bought a bunch of useless junk Tuesday.

Courtesy Peter Kleppin
Feeling overwhelmed by marketing? So is the cynic lurking in the background.

One standby mechanism is simply the level of overall hype that attends the Christmas season, and if you’ve noticed an outsize share of retail hype this year, that may reflect our parlous times, says Lars Perner, an assistant professor of marketing at the University of Southern California. “This may be an extreme year. A lot of retailers probably banked on greater economic recovery than we had, so they brought in more goods than they did last year, when they anticipated the weak economy.”

Stocked with merchandise that will quickly de-value after Christmas, “They basically have become more aggressive,” says Perner. “We are even seeing pre-Thanksgiving sales, and many retailers have joined the trend of being open Thanksgiving day.”

DISCLAIMER:

The journalistic product contained herein does not satisfy all nutritional requirements about the science of sales. Instead, it is a nosher’s guide to what’s new and tasty in the everyday art of marketing.

The shopping compulsion

We asked Perner about Black Friday fever, and he agreed that compulsive bargain hunters do exist. “Some people get a psychological benefit from getting something on sale, quite aside from the product. They can end up buying things they do not need, that will end up in storage, just to get the good deal.”

Crowd of people in store isles with carts filled with boxes, well-stocked shelves and racks scattered about

1st photo: Cracker and Cheese. Rollover image: Just_[von]Bernard.
Attention Black Friday shoppers! We have deals to satisfy all your senses. Roll over to see store employees (in dark blue) guarding video games against desperate Black Friday shoppers.

That urge may be ancient, Perner added. “Some people get their arousal, enjoyment from sports. Some compete based on the best bargain, on getting something that is in short supply.” In the distant past, he says, “life was more difficult, we had to compete to get food. Now, when we live in a society where things are more affluent, they have retained much of the same instinct.”

Aggressive shopping, he says, “is a way to compete with other people, to get the satisfaction of getting these great deals, independent of any actual use you may have for the product.”

A touching moment

Cardboard Samsonite luggage package with image of backpack with hole and black mesh padding showing through

The Why Files
This manufacturer wants to show off the soft strap material; but touching also increases sales by creating a sense of ownership.

In their quest to stimulate the shopping imperative, scientists are turning to the five senses. Joann Peck, an associate professor of business at University of Wisconsin-Madison, noticed that little research had been devoted to the sense of touch in marketing, and she made that her specialty.

Obviously, touching conveys information about function, Peck acknowledges. “With a sweater, you get information on weight and texture.”

But touch does much more, Peck avers. In lab experiments, Peck asked student subjects to either play with a Slinky or simply touch its box, and then decide how much to pay for it. We figured playing with this classic toy would increase its value, but were surprised to learn that touching the box did likewise. Playing produced the biggest effect, says Peck, “but even if they just touched the box, that did more than not touching.”

Touching, Peck says, creates “psychological ownership, even if there are no product attributes related to touch. So you have to be careful what you touch.” The touch does not even need to occur, Peck says. “If you close your eyes and imagine touching a product, that can be as good as actually touching.”

Cultural differences affect the retail touchy-feelies, Peck adds. “In England, people are used to touching sheets, but here we use the thread count to measure softness. People who come over from England may rip open the package; they can’t believe they can’t touch the sheets.”

Package designers are busy putting tactile treats on razors, pens, pencils, even backpacks.

Touch can even operate through the mail, Peck says, noting that when a children’s museum solicited memberships using two versions of the same flier, the ones that carried a swatch of soft material elicited a better response.

L.L. Bean catalog with orange fleece jacket on cover, circular hole with orange fleece showing through

The Why Files
Mail-order giant L.L. Bean had enough faith in the power of touch to paste a disk of touchy-feely material on a catalog last fall.

Because touching a soft object can improve mood, some stores place goods like sweaters near the entrance, with a placard encouraging customers to “Feel the softness.” But our touching tendency can result in finger smudges on fine clothes, so some stores have altered traffic patterns to fight unconscious product fondling en route to the kitchen or shoe departments.

The song of Christmas

You’re wandering, dazed but dogged, through retaildom, and the familiar holiday music hounds you through the aisles: Jingle Bells, Silent Night, O Come All Ye Faithful. The question of exactly how this music affects you fascinates Lisa Cavanaugh, an associate professor of marketing at the University of Southern California. “We often hear music but don’t know much about how it influence behavior,” she says.

Admittedly, minor-key music makes people sad and major-key music makes them happy. Because a rapid tempo causes us to move faster, Cavanaugh says fast-food restaurants like it, “because they need your chair for the next customer.”

Music can even be a defensive measure, Cavanaugh adds, describing a 24-hour convenience store that was worried that loitering teenagers would offend customers. “They started playing classical music in the parking lot, and the kids were annoyed: ‘This is not our music; this is not us.’ And they left.”

But Cavanaugh wanted to go deeper. For example, does in-store holiday music affect us differently if it’s religious (Joy to the World) or secular (Frosty the Snowman)? “Retailers often don’t distinguish religious from non-religious music, they just put it on,” she says. “I was interested in what type of music is playing, and how that may shape what people buy.”

Three walls of store shelves packed with food and household items, cash register in front left corner

Courtesy Lisa Cavanaugh.
Honey, would you snag a bottle of mouthwash and some soap — er, body wash — on your way home? Cavanaugh used this mock store to study consumer choices in the presence of different holiday music.

Cavanaugh found that secular music shifted people, particularly non-Christians, toward pricier brands: “They would buy Advil, or Dixie paper plates, over the store brand.” Why? Perhaps non-Christians are responding to holiday music because “even if you are not Christian and don’t celebrate the holiday, it’s as if knowing the script is enough, you know what you are supposed to do.”

When Cavanaugh allowed the subjects to donate money to a charity after the experiment, religious music increased donations by both Christians and non-Christians.

Sweet scent of spending success

We’ve known for years that the scent of fresh bread will boost home sales, but odor can also affect retail spending:

* A 1995 study in Las Vegas found a 45 percent boost in slot-machine take when odors were piped into the one-armed bandit section of a casino.

* A study from 2000 showed that a pleasant geranium scent made it easier to remember unfamiliar brands.

* A restaurant study from 20061 associated the odor of lavender, but not lemon, with a longer stay and a higher bill. The authors speculated that lavender works through relaxation.

spray can with warning label and 'Spend-scent' brand on it

Many studies show that pleasant scents improve attention, relaxation and generosity. But scents can also increase the all-important buying behavior.

Speaking of restaurants, a 2010 study2 in France showed that waitresses got tips from a higher percentage of male customers if they wore makeup. Although women’s tipping behavior did not change significantly, the average men’s tip rose from 1.1 euros to 1.4 euros. With appropriate academic caution, the authors speculated that “perhaps” the explanation lay in the “greater physical or sexual attractiveness of waitresses when they wore makeup.”

How grand is my brand?

In marketing, brands are the shots heard around the world. Coca-Cola, McDonald’s, Apple. The brand — and its representation in a logo — may be a firm’s most cherished possessions. A brand “gives an image of a product or company,” and it creates a relationship with a potential buyer, explains Ira Kalb, an assistant professor of marketing at the University of Southern California.

Ceramic man with gifts in arms and a woman and man arm-in-arm, all in old-fashioned clothes and walking together

Do these ceramic shoppers have favorite brands?

Kalb says a good brand can make life easier for buyers: When you walk into a store with a strong brand, he says, “You trust it, so you don’t have to think so hard about what you are going to buy.”

Product brands can be equally effective at stimulating the buying decision, Kalb says, because it “creates a shortcut for the buyer and inoculates the product against the competition.” iPhone buyers, he says, “Are very loyal, and most would not look at an Android phone.”

If used incautiously, a strong brand can backfire, Kalb says. The Clorox Company, for example, produces salad dressing, “but it would be totally insane to brand the salad dressing as Clorox. The company has identified itself with a product line [chlorinated cleansers] that is so far from salad dressing. This is a clear case where separate is better.”

A strong brand can also confuse, Kalb says. IBM, the computer company, went into the copier business, and Xerox, the copier company, sold computers, but both efforts staggered. Although IBM and Xerox both dominated their original markets, “but the brand identity prevented them from succeeding in other areas.”

Large white sign with black and pink polka dots, says 'Shop til the cards won't swipe'

On your mark, get set, shop! How do marketers put your spending in overdrive?

Thus it sometimes makes sense to abandon a good brand, Kalb says, noting that Toyota, Nissan and Honda all created luxury spin-offs as their market aged and grew more affluent. In the 1980s, Kalb says, “Japanese cars were good, but ugly. As baby boomers got wealthier, the Japanese auto manufacturer knew they could not use those corporate names, and they came up with Lexis, Infinity and Acura.”

“Brand carries both baggage and positives,” Kalb says, “and smart marketing people know when to use the corporate brand and when to use a separate one.”

Death is my brand

Brands can convey unconscious negative associations, according to research3 from Holland, which found that the brand of an insurance company “may (unintentionally) induce the fear of death under various conditions.”

Black book cover with The Hidden Persuaders in orange text and author's name in green at top left corner

Vance Packard wrote about “the large-scale efforts being made, often with impressive success, to channel our unthinking habits, our purchasing decisions, and our thought processes by the use of insights gleaned from psychiatry and the social sciences.” Although Packard argued that consumers were putty in the hands of science-enabled marketers, many now doubt that marketing’s “awesome tools” attain anything approaching absolute autonomy on our spending.

Ouch!

After seeing the insurance logo, the subjects “had more mortality-related thoughts than participants in the no-brand control condition,” the authors wrote. We would not predict this, but the participants then spent more on entertainment and food, and had a higher regard for products produced domestically.

Those intimations of mortality caused terror, the authors believe. “Individuals confronted with an insurance brand, are unconsciously reminded of their mortality and use spending as a means to regulate their experienced terror. The current research shows that brands can sometimes automatically trigger unconscious, hidden motives, desires, and fears that have a significant impact on consumer behavior.”

If that isn’t disturbing enough, the researchers added that “these findings empirically verify that reducing existential anxiety is conceivable through lavish consumption.”

Modern marketing = manipulation?

The prospect that we can be ruled by things we don’t even notice was raised in 1957 ago by journalist Vance Packard, who warned that unethical, coercive tactics based on science could turn Americans into free-spending robots. In The Hidden Persuaders, Packard argued that the unconscious mind could seize control of behavior.

A second event in 1957, at a New Jersey drive-in theater, raised further alarms about persuasion run amok. This “experiment” supposedly proved that on-screen text, flashed faster than the conscious mind could register, increased purchases of Coca-Cola and popcorn. The study was considered proof that marketers could beam messages directly into our unconscious minds.

But many observers now consider the experiment a fraud that could never be replicated, and many doubt that it was even performed.

To those who believe the planet is being consumed by consumption, the annual X-mas spend-a-thon amounts to a Shopocalypse.

Lines of people at a dozen registers waiting to purchase armsful and cartsful of merchandise

Maybe we aren’t shopping automatons, but something awful persuasive seems to be going on here.

Ask a marketer, and he’ll tell you that modern marketers do not have the power to unconsciously manipulate us. “A marketer’s job is to get people to want to buy the product,” acknowledges Kalb, “in order to convince people to buy their’s versus another’s. I don’t think anything is wrong with that. If I am marketing a product, it’s because I think it’s better than the others. If I don’t feel mine is better, I would not sell the product.”

This does leave a gray area, as Kalb admits. “You are going to have good and bad marketers. But the bad ones won’t last long, people will find out about anything. The market is a harsh critic, and you may deceive others for a little while, but not for very long.”

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Terry Devitt, editor; S.V. Medaris, designer/illustrator; Jenny Seifert, project assistant; David J. Tenenbaum, feature writer; Amy Toburen, content development executive