When it comes to holiday shopping, we all have a clear-eyed view of how much we’re spending, and why, right?
Not always, says Luke Kachersky, Ph.D., a Gabelli School of Business marketing professor who studies pricing, brands, and consumer behavior. As Black Friday approaches, he shared tips for staying aware of the factors that influence our buying behavior, drawing on research he teaches in class.
1. Keep the true price in mind.
Sometimes it’s hard to look past that great price that catches your eye—even after you learn about add-on costs. A $190 Bluetooth speaker, for instance, might really cost $210 because of shipping and other fees, but the lower price is the one that sticks in the mind. The strategy is called partitioned pricing, Kachersky said.
“People tend to anchor on the first bit of information about something, and then when they get the new information, it’s not like they replace their initial impression. It still feels like that price before fees,” he said.
2. Do the math.
When faced with complex numbers, like a 15% discount on a $229 product, people often skip the math. “People tend to underestimate what they’re actually paying” when they use mental shortcuts instead of working through the actual numbers, Kachersky said.
3. Be honest with yourself: Will you really jump through the hoops to get that rebate?
Rebates offered with a purchase “make you feel like you’re getting a discount, but you may never follow up to actually get that discount,” Kachersky said. It’s a cost/benefit thing, he said—having made a purchase, shoppers often come to feel the savings benefit isn’t worth the cost in tedium. “You’re uploading pictures of a receipt, and you’re taking a specific eight digits off of that receipt that you have to type into a field … people are just like, ‘Whatever, I already got the item.’”
His suggestion? “Check the rules and the effort that’s involved in actually securing that rebate and ask yourself if you’re really going to do it.”
4. Take a breath.
Limited-time Black Friday deals and a perception of dwindling supplies can tax your ability to think clearly, often resulting in suboptimal decisions. If you’re shopping online, he said, the time-running-out perception might even be reinforced by an image of a clock ticking down, or a number showing the dwindling stocks. “Essentially, when your brain is occupied, your impulsive side is more free to do its thing, which is not always OK,” Kachersky said.
His advice? Slow down, even in the face of such “limited-time” circumstances. “Very rarely will a deal be so time-sensitive that you can’t take one minute to give it at least a little thoughtful consideration,” he said.
5. Be aware of your state of mind.
People often project their own personalities, or their current state of mind, onto their spending decisions, according to recent research articles Kachersky co-authored. For example, there’s a tendency for people who value authenticity to overinflate their perception of how authentic a given brand is. “When you’re thinking about buying something, consider whether the brand is bringing you authenticity, or if it’s just you bringing your authenticity to the brand,” Kachersky said.
Another project revealed how feeling lucky can distort your perceptions. When customers win token prizes or discount offers from a company, they feel special—and also get an inflated idea of how unique the company’s brand is, making it more likely they’ll reach for that credit card.
And when you receive a gift, your feelings toward the giver—good or bad—may affect how you feel about the gift’s brand. “In a romantic relationship, if it goes bad, that could actually damage the person’s perceptions of the brand,” Kachersky said.
6. Bigger isn’t always a better deal.
When shopping for holiday meals, don’t automatically reach for that bigger package of butter or jar of gravy. “People tend to assume that when you buy a larger package, you’re going to pay less per ounce,” he said. “Sometimes it’s actually more per ounce,” a practice called a quantity surcharge, which is based on the rationale that the larger package offers customers more convenience, he said.
