Don't Be Fooled by These 3 Retail Sales Tricks

Minyanville |

Shoppers, Retail, Personal FinanceDo you find yourself going into a store to browse, only to leave the store an hour later with an armful of merchandise you never intended to buy? You’re not alone. Competition is fierce in retail, and you’ve likely fallen prey to ”retailer sales tricks” that marketers use to build brand experiences and perceptions that persuade you to buy. There’s a science behind retail strategy, and the more you understand, the more you can stop being fooled by retailer sales tricks.

1. Timed sales

Were you one of the 226 million shoppers who braved the Black Friday crowds this year? According to National Retail Federation President and CEO Matthew Shay, “early morning openings appear to have been well worth it for both retailers and holiday shoppers, with many Americans believing that deals were too good to pass up regardless of who they were shopping for.” (Then again, the NRF's early sales numbers were exaggerated, we recently learned.)

Online search was buzzing, too, especially at Amazon (AMZN), Wal-Mart (WMT), Best Buy (BBY), Target (TGT), and Apple (AAPL), the five retailers whose sites attracted the most Black Friday online traffic, according to comScore.

Black Friday media coverage and advertising runs rampant in the days leading up to Thanksgiving. Not surprisingly, retailers also increased their investment in both paid search and display advertising, compared to the fourth quarter of 2010, according to an analysis by digital marketing firm IgnitionOne.

As it turns out, however, our response to the advertising may be driven less by messaging and phrases like “lowest price of the season” and “door buster” and more by our evolutionary need to belong and be a part of the crowd. Dr. Gad Saad, author of The Consuming Instinct: What Juicy Burgers, Ferraris, Pornography, and Gift Giving Reveal About Human Nature, theorizes that the foundations of consumerism date back to Darwinism, and that “advertisers are effective to the extent that they provide you with information consistent with your human nature.” Other scientists theorize that it taps into our biological needs to “hunt and gather.” How do we combat the urge to buy on impulse when we’re sold into a sense of urgency?

Paul J. Zak , founding director of the Center for Neuroeconomics Studies and professor of economics at Claremont Graduate University, explains that when we evaluate a purchase, an area in the prefrontal cortex undergoes a cost-benefit calculation to determine price and value. Therefore, an easy way to resist the barrage of “buy now” messaging is to make buying “hurt” more by using cash (which provides a tangible view of your loss after a purchase) instead of credit cards.

2. Free Shipping

Are you a sucker for free shipping? You’re in good company. In fact, there’s an entire day devoted to it, called Free Shipping Day (which will take place on December 16). The event gives shoppers the opportunity to save on shipping when they buy from participating retailers like Bed Bath & Beyond (BBBY).

Why is free shipping such a draw? Blake Shipley, founder & CEO of CoupSmart, a data and social coupon-focused tech company, explains that “free shipping can be one of the most powerful discounts offered (especially as a limited time offer). Even if it's not that much extra, consumers place an extremely high perceived cost on having to pay for shipping, when they could technically drive to a store and buy the same item.”

Your best bet for knowing whether free shipping is a good deal? Do a quick online product search for the item you are about to buy and see what other retailers are selling it for. (It is not uncommon for retailers to offer free shipping and bump up the prices of other items to cover their costs).

3. Scent Marketing

Playing with mood music, lighting effect, and store layouts is a known way to draw shoppers into a store and, hopefully, keep them there. But major retailers have started to take branding a step further through a practice called “neuromarketing,” which taps into your senses to deepen your experience at the point of sale.

ScentAir is a company based in Charlotte, NC, that provides brands with custom aromas for “scent marketing.” Its client list includes Sony Style Retail Stores (SNE), which use a “signature fragrance combining subtle notes of citrus, vanilla, and other secret ingredients” to create a unique brand experience. Bloomingdale’s (M), another ScentAir client, uses baby powder aromas in the infant department, soothes intimate apparel shoppers with lilac scents, and “spikes” the swimsuit department’s air with a hint of coconut to get customers in the island spirit. According to the ScentAir blog, Bloomingdale’s sales figures within the trim-a-tree area and the candy area have risen over the past four years, since it started incorporating scents.

Bonus Strategy: Man up!

Are all shoppers simply helpless victims to their own evolutionary impulses? Not necessarily. One way to stack the deck in your favor may be by sending the gender least likely to fall prey to the tactics to do at least some of the shopping. According to research by NeuroFocus, a Nielsen company (NLSN), conventional advertising strategies treat the instinct to be desired as a female phenomenon, but miss “a potentially very valuable source of motivation towards purchase intent” for males in the health and beauty, beverage, and automotive categories. If any of those items are on your list -- send the Mr.!

by Stephanie Taylor Christensen

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DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
AAPL Apple Inc. 112.98 0.80 0.71 18,462,732
AF.P.C Astoria Financial Corporation Depositary Shs Repst 26.36 -0.02 -0.08 1,534
AMZN Amazon.com Inc. 838.52 9.47 1.14 2,148,888
BBBY Bed Bath & Beyond Inc. 42.78 0.60 1.42 608,174
BBY Best Buy Co. Inc. 38.21 0.80 2.14 1,788,382
M Macys Inc. 37.13 1.08 2.98 2,001,682
NLSN Nielsen N.V. 53.58 0.11 0.20 1,081,536
SNE Sony Corporation 33.33 0.09 0.27 637,840
TGT Target Corporation 68.74 1.02 1.51 1,603,920
WMT Wal-Mart Stores Inc. 72.35 1.62 2.29 4,362,971

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