As Black Friday and Cyber Monday deliveries landed in thousands of homes this week, for some, buyer regret began.
Our love of bargaining can sometimes mean that we either spend more than we expect or, in search of value, end up with something we neither want nor need.
Big events like Cyber Monday are creating retailers with the simple goal of making money. There is no law against it, but to what extent do they manipulate consumers?
We know there is a science to supermarket design that is designed to make us spend more and buy things we may not have planned. So it is fair to assume that the same is true of online events.
A simple ABC study of cyber psychology would suggest that online marketers know which buttons to press. Experts have studied human behavior in this area and there are certain factors that come into play when we shop online that increase the likelihood that we will buy momentum.
Dr. Nicholas Fox Hamilton is an expert in computer psychology. She believes that retailers have combined all the elements that encourage us to spend more and think less.
Dr Fox Hamilton said: “Around things like Black Friday or Cyber Monday, there are a lot of sales and offers, and prices are something that really encourages people to buy momentum.
“When you have a sale or an offer for a limited time, you also have a shortage and we like things we can’t have.
“Add urgently, and these two things combined really go beyond our rational decision-making.” “It brings confusion, emotion and anxiety to the process, so we may not make the rational decisions we would normally make.”
Wow! That sounds like a great recipe. Let’s separate it.
Price points encourage us to buy – it’s starving for a bargain. Limiting the time period of the sale creates two things, urgency and scarcity.
So, we really want to get a deal, we need to get it fast, and things sell fast, so the human brain shouts “BUY NOW”. When you realize that all these factors in turn create confusion and anxiety, it sounds nice, good, manipulative.
But aren’t we smarter than that? Consumers have been tracking sales for decades. Yes, there used to be sales in January and summer, twice a year you could make a deal – often huge cuts, stores clearing stocks to prepare for the lines for the new season.
But with so many choices about where and how we buy now, it is unlikely that a week will pass when there are no sales. Well, do consumers not develop immunity to excitement?
There is evidence that as people become more aware of the marketing strategies that tire them out and are less likely to fall for them. But the price is our Achilles heel.
It seems we just can’t resist the deal. So while we know that many of the Cyber Monday or Black Friday deals have been available for weeks, if not months, we are still entering.
Dr Fox Hamilton said it was a fairly simple psychology. “People are activated by communications around Black Friday, prices are activated by them, the variety of items is also an attraction and they are still very likely to be drawn in.”
The thesis of regret of that buyer is also based on science. Have you ever stood at an ice cream counter in a movie theater or looked at a line of beer taps in a bar, thinking about your choices, carefully considering your options, to immediately regret your decision as soon as the ice cream or drink hit your lips?
There is a reason for that. Obviously, the more choices we have, the worse choices we make. So, does the wall with 100 TVs in the electronics super store make sense?
Dr Fox Hamilton said: “Six choices are about the optimal range for people and when they reach more than 15, our decision-making processes really fall apart and we make poorer choices and are less satisfied with them.”
What? Is too much choice a bad thing? Obviously, yes.
Dr Fox Hamilton continued: “We will probably regret those choices and feel a sense of loss about the products or things we had to drop to buy what we decided to buy.
“Having access to so many choices, along with the urgency of selling, which is limited in time, can lead to poor decision making.”
Thus, in the case of online sales it has never been more appropriate. “When we make decisions online, there is an unprecedented choice in products. People are designed to make decisions with few choices.”
But retailers see it differently, they say the sector is adapting to a rapidly changing trend in consumer behavior. Our desire to stay safe and avoid crowds, Covid’s restrictions, and other factors mean that far fewer of us visit malls or department stores.
We have adapted to the Internet and clicked and collected culture very, very quickly. Irish online retailers have seen a 130% increase in sales this year.
A few years ago, Black Friday accounted for 70% of retailer sales in the UK or international market. This year it dropped to 60%. People opt for Irish sellers – if Covid did one thing, it gave us more appreciation for what is on our doorstep.
I vividly remember visiting 10 major stores to try to buy a thermometer when the first “lock” started. They were all sold out, there was nothing to have. The small community pharmacy around the corner had dozens of them. We have all had that experience in recent months.
The way we spend is proof of that. It’s a struggle for big chains to deal with. But some may say that it is leveling off the field. But even when we go shopping now, we obviously behave differently. It is a development that hits the bottom line and traders do not want it.
Duncan Graham heads Retail Excellence, which represents thousands of retailers in Ireland. He said consumers are now arriving at stores informed, with research done.
They know what they want, get it and leave. Viewing, it seems, is declining.
He said reducing “living time” was a problem. “The average value of the transaction is affected, the average value of the transaction is slightly lower.
“Because people do not spend time in stores and go for one or two Christmas presents and leave.
“Previously, they would have come in longer and maybe spent more, and it certainly did not help with the fact that cafes and restaurants were not open. “So there was no draw for people to enter the shops.”
So if they can not reach us in the store and encourage more spending, things will have to change, for sure?
Duncan Graham said yes. “Less time is spent in stores, there is a lot more research that consumers do before they go to the store and they have a lot of choice of outlets and ways to shop.
“It has become much more complex for retailers, we need to reach consumers online, we need to use all the social media channels to promote ourselves, as well as all the traditional ways to reach customers.”
Most traders smile when you ask them about the tactics that make us spend. End of track promotions. The fact that certain products that we all love, such as bread and milk, are not just found at the door next to the cash register.
Their strategy of making us spend is well thought out and based on decades of consumer behavior and research. If we do not spend more time wandering around, it becomes inconvenient.
New ways to reach consumers are needed. The brands in front of the stores that we all know are going online in huge numbers. There is even government funding to strengthen your online presence. Save countless businesses in the most difficult period facing retail since the collapse of the economy in the mid-2000s.
Retailing is difficult. Only the hardest survive. But it faces the biggest challenge ever and everyone knows there will be lasting change.
Duncan Graham is very much in advance about that. “It will not go back to 2019, we will change dramatically.”
He is focused on helping his members adapt and survive, but he is thinking of a bigger picture. “We will not go back to where the Internet is now, it will only grow.
“The challenge will be what to do with our city and the city center, because space will inevitably appear in those areas.
“How we get the client back to shop and live in the city centers will be crucial and that should be part of the government’s plan for the next five to ten years.”
If retailers are planning empty retail units in cities, then the future is worrying. This is also a challenge for retailers.
The basic upgrades they relied on are no longer as effective. Large top stores and even supermarkets are designed to make us spend. The environment and the environment in the top stores influence us to buy expensive things.
So if we shop online we avoid it, right? No, oh, wrong! Dr. Fox Hamilton did his homework for that too.
“Having a very seamless online shopping experience, where your credit card details are already entered and your address is saved from your previous shopping experience, makes it extremely fast and hassle-free.”
We like it when it’s simple, but that love of smooth shopping has a deeper psychology. “The less friction there is, the less likely you are to get out of that process and take a moment to think about it.” “There is also the fact that the further away we are from paying in cash, the more likely we are to spend more.”
So, wait, if we do not actually feel the notes slip through our fingers, do we spend more? Yes, said Dr. Fox Hamilton.
“When you hand over real money, there is a pain factor associated with it, you can see the cash coming out of your wallet and it makes people self-regulate their spending.
The further away you are from this, the more you can spend, so if you need to get a credit card to use it, it is one step away from the cash transaction.
“But if you use PayPal or Apple Pay or your credit card details are already saved, you are even further away from the act of handing over cash so that it is easier to spend too much.”
Irish consumers spend around € 10 billion a year online. 90% of us shop online. All research points to that increase.
We can be as careful as we want, most of us are savvy and can notice how they are diminishing from the original. But regardless, we have one big drawback, we are human beings.
We are pre-programmed to fall victim to certain things, especially the bargain!
But there is something more important than saving money or making sure we are not deceived. Although many of us grow up to be taught that material goods are not important, some of them simply know.
Of course, money does not make a man or a woman, but there are good things in the dark that can help us a little.
Many of us use shopping as a means of regulating our mood. Malotherapy is not just a phrase. The last word to the person who knows more about this than most, Dr. Nicholas Fox Hamilton.
“Because people are having a hard time with the pandemic, it is possible to buy more online because of it,” she said.
“People can use shopping to increase their emotions, but they also use it to manage sadness or negative moods sometimes, including getting emotionally involved through shopping.
Afternoon malotherapy? Amen to that!