Like most Americans Jill has a new budget. The 44-year-old San Franciscan has been working diligently for the past six months to reduce her credit card debt by skipping Starbucks and car washes, cleaning her own house and getting her hair cut less frequently. She's managed to cut her $6,200 balance almost in half. Last week, however, Jill did something unexpected - she bought a pair of sandals for $140 (reduced from $280) and a satin trench coat for $90 (reduced from $140). "I simply couldn't resist, I don't know what came over me. They were such great deals."
Tanya, 23, of Alexandria, VA was walking through Nordstrom on her way to meet a friend for lunch and spotted a table piled high with handbags. "It called to me! I found the cutest hobo, it was the last one, I had to buy it."
The song of the Shopping Sirens is a sale. Resolve is weakened, thoughts are muddled, impulse takes over and out comes the credit card. Sales work because they hit us at a deep psychological level. We may think it's all about the deal - but there's much more to it than that.
Here are six different ways that sales play on emotions in very cunning ways and often inspire us to make purchases we might otherwise pass up.
Fear: Sales inspire a fear of missing out. Everyone knows sale items are limited and this creates a now-or-never mentality that prompts a purchase. Like Tanya, awareness that it's the "last one" means buy it now or it's gone. Without that fear and with more time to think - a good many sale items would be left behind. This is the same mentality behind 24-hour specials and midnight madness events - when time is limited, emotions are elevated and, well, you know the rest.
Emotional Investment: The time, energy and engagement required to sort though a jumble of markdowns is akin to an investment. Further, finding the right color, right size or perfect brand is like unearthing buried treasure. Our perception of an item's value and our unconscious commitment to purchase gets a boost when we've already made a commitment of time. Plus our sense of good fortune when we find something good after a search rubs off onto the product and increases its emotional value. In other words, the hunt itself contributes to our perception of the value of the product.
Competition: Sales create a sense of competition with other shoppers. Stacy, 33, of Chicago has been getting emails from Neiman Marcus with two-hour mid-day specials. The sales start at 11:30 and last for only two hours or until they're sold out. "I had a few minutes during lunch and checked it out - they had La Mer moisturizer for half off! That never goes on sale. But it was sold out. So now I find myself rushing to check whenever I get the email and I've noticed that most of the things on there get sold out right away. It's like a competition to see who can get it first." Getting the best deal or a great bargain is a badge of honor of many shoppers and the notion that they've won over others through better planning, more effort or expertise is rewarding to many consumers. The competition can overshadow a rational evaluation of the worth of the product in that person's life. We've all seen the worst of this on the news when shoppers stampede retailers during Black Friday sales. A more subtle version of this phenomenon exists whenever shoppers get the sense that they've "won" rather than "bought" an item.
Assumed Value: Sales override the process of considering the value of an item. When full priced merchandise is considered, a price/value equation takes place in the minds of consumers. "Is it worth it? Is that a fair price?" When things go on sale, they're instinctively "a deal" and that process of evaluating the product's worth is often overshadowed by something like, "it used to be $400 and now it's only $200! Wow, what a great deal!" If that same product were full price at $200 - shoppers would go through a more lengthy thought process to determine its value to the individual. Without this process we're also more likely to make hasty, emotional purchases.
Easy Shopping: Many shoppers move right to the sale rack - and not just because they're hungry for a bargain. Sales pare down choices - and today's shoppers are overwhelmed by choice. As Barry Schwartz has taught us all, an abundance of options can be overwhelming and mentally taxing. Research has shown that men in particular will simply leave a store when confronted a robust selection. Sale shopping feels more comfortable to less enthusiastic shoppers.
Saving not Spending: Sales make us feel like we're saving rather than spending. Benjamin, 30, of San Francisco, recalls his wife returning home from a shopping trip positively giddy with delight at the great sales she'd found at the mall. "I kept asking her how much she's spent and she didn't have any idea, but she knew exactly how much she'd ‘saved'." Similarly, coupon clipping has made a big comeback in response to our recent economic woes. While many shoppers are using coupons to take the sting out of their weekly food expenditures, others are stocking up on items they'd otherwise avoid because they're "getting a deal."
While most shoppers are aware of the overt ways they rationalize purchases by taking advantage of sales, many aren't aware of the deeper ways that sales fire up our emotions and consequently override some of good reasoning skills. A great sale can be a lot of fun and a terrific way to buy - as long as you know what you're up against.
Kit Yarrow is the co-author of the forthcoming Gen BuY: How Tweens, Teens and Twenty-Somethings Are Revolutionizing Retail and Chair of the Department of Psychology at Golden Gate University.