How merchants get you to (over)spend on holiday gifts.
You walked into the store with every intention of sticking to your budget. You walked out with three overstuffed bags of goodies.
How did this happen? Not by accident. Here are a few common (and effective) holiday tactics used by retailers.
Make Everything Sparkle
Why it works: Razzle-dazzle metallics, like silver and gold, inspire people to open their wallets. How? “Those colors make even something simple seem special and luxurious,” says Kate Smith, the president of Sensational Color, a consulting firm in Newport, Rhode Island. That’s why the shopping center is packed with tinselly decor and glitzy products, like party dresses with sequins or shimmery fabrics.
Limit What’s in Stock
Why it works: When you’re trolling for gifts, your brain releases the neurotransmitter dopamine, which reduces rational thought and lessens your ability to resist impulse purchases. Retailers exploit this chemical surge by turning a shopping trip into a competitive sport: By limiting stock for many Black Friday deals and running in-store and online sales that last only a few hours, they instill a sense of fear that you’ll miss out on a great discount if you don’t buy something, stat. “For most shoppers, the thought of someone else getting a better deal is unbearable,” says Martin Lindstrom, the author of Brandwashed ($18, amazon.com). This year, Lindstrom says, it’s probable that many online retailers will increase the pressure by using countdown clocks that inform you of how much time you have before a deal disappears.
Turn on Some Nat King Cole
Why it works: You may not be very festive after looping through the parking garage looking for a spot. But marketers hope that hearing “chestnuts roasting on an open fire” will perk you back up. Stores play traditional holiday music because the tunes make people nostalgic. In turn, “we buy things in an effort to re-create the past and relive our youth,” says Lindstrom. Psychologists call this phenomenon “rosy retrospection.”
Much like music, certain fragrances can evoke happy memories. So savvy retailers burn candles and use electronic aromatherapy diffusers that spread scents such as mulled wine, pine, cinnamon, fresh-baked cookies, and orange to put consumers at ease and to increase sales. The proof is in the (figgy) pudding: A 2005 study published in the Journal of Business Research found that consumers rated a store more favorably when it was scented with a Christmas-related aroma and playing holiday tunes.
Why it works: Hungry? Merchants figure that you are, and that’s why so many now offer on-the-house beverages and noshes in an effort to get you to browse longer. “Putting out a plate of cookies helps set the tone that shopping is an experience, not a transaction,” says Donna Sturgess, the president of Buyology Inc., a New York City–based marketing consultancy and research firm. This small gesture translates into dollar signs: A 2011 Columbia Business School study found that shoppers are willing to spend more when they’re relaxed. This month, also keep an eye out for in-store cooking demonstrations, which are growing in popularity. Sturgess notes that demos are especially effective as they allow the merchant to demonstrate and talk about the product while injecting savory aromas into the air.
Please the Tykes
Why it works: Make the kids happy; make Mom and Dad happy. That’s the thinking behind retailers’ offers of children’s cooking classes, scavenger hunts, interactive displays, and meet and greets with Saint Nick. These kid-friendly activities transform shopping from a dutiful activity into entertainment. But those good times aren’t free: Because your family is having fun, says Lindstrom, your critical-thinking skills are reduced, and you may spend up to 29 percent more than what you had intended.