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The Neuroscience of Holiday Shopping

How Retailers Light Up Our Brains Like Those Sparkly Holiday Luxe Displays

'Tis that time of year again. The smell of pumpkin, cinnamon spice and peppermint frost mochas is in the air. The luxury department stores are rolling out their latest UGG boots, Jand pastel cashmere scarves in an array of soft, soothing pastel colors. Macy's is having their one-day sales while Bloomies has their Friends and Family discounts and Target is rolling in the cash with electronics, holiday videos, and designer originals made out of cheaper fabrics. Costco aisles are full with those extra-gigantic shopping carts containing an array of bulk value items, both utilitarian and hedonic. Luxury Belgian chocolates, sparkly girls' dresses, giant santas, and family holiday video sets are piled high upon the ginormous bulk packages of toilet paper and diapers. Oh, how we all love the holiday season!

In the interests of full disclosure I am a full-on holiday aficionado. Give me a steaming hot gingerbread, pumpkin spice, cinnamon latte with cream and a drizzle of toffee and a warm, cozy soft, luxury throw in a pastel color and I reach a state of pure, relaxed bliss. Warm feelings towards friends and family emanate from my being and my heart glows with pleasant anticipation of fun and restful family time. Oxytocin, the "bonding" hormone secretes from my pores as I send off those holiday cards and all is good with the world. Amidt all this emotional bliss, however, I know deep down that advertisers and retailers are playing a merry orchestral tune with my brain and that, if I'm not careful, I will end up with buyers remorse come January bill season.

Your Brain on Shopping

To enlighten myself (and you) about exactly how our brains work when we shop, I decided to become a shopping neuroscience detective, poring through the scientific literature for the requisite studies. Immediately, a 2007 article in the journal Neuron piqued my interest. Researcher Brian Knutson, a Stanford neuroscientist and his colleagues scanned the brains of 26 volunteers in real-time while they made decisions whether to purchase displayed items. The technology, known as functional magnetic resonance imaging (fMRI) can show which brain regions light up with activity when potential shoppers anticipate, deliberate about, and ultimately decide whether to buy. Wow! What deep dark secrets would be revealed?

The research design was as follows: A potential purchase item, such as a box of Godiva chocolates or holiday video was displayed on the screen, followed 4 seconds later by a price. Four seconds later, two boxes appeared and the shopper had the opportunity to check "yes" or "no." The order was alternated randomly so that position of the box wouldn't influence decisions. The entire exercise used pretend money, with the exception of two purchases selected at random. On these, shoppers actually spent $20.00 they had been given and could receive the items. Immediately the desirable products were displayed, participants showed increased activity in the nucleus accumbens, a brain area associated with dopamine release, reward circuitry and new learning. It seemed that participants were pleasantly anticipating the upcoming purchase. Interestingly, other animal studies have shown that with repeated trials, birds given fruit juice will begin releasing dopamine prior to actually tasting the juice. Anticipation of receiving a rewarding object becomes pleasurable in itself! Hence the anticipatory pre-shopping rush!

It turns out, though, that our brains have built-in mechanisms for rational decision-making and inhibition as well. When the price was displayed, the mesial prefrontal cortex lit up. This is an area responsible for executive functioning and higher-level decision-making. Finally, during the decision-making phase, there was activity in the insula, a section of the cortex associated with response to negative or distressing stimuli. When subjects decided not to buy, there was a significant increase in insula activity.

Purchase decisions then, seem to be complex brain activities involving coordination between different networks involved in motivation and decision-making. We consider both the reward value and the cost of using our limited resources on this opportunity and thereby foregoing future opportunities for reward or depleting our stockpiles. In fact, research on choice in animals by behavioral psychologists has shown that animals will choose to expend their energy so as to maximize reward for effort. If there are two levers to peck with different rewards cycles associated with each, (e.g., food after every 10 pecks on average versus every 4 pecks) pigeons will lawfully distribute their pecks according to a formula based on these reward contingencies. This makes sense in evolutionary terms. Animals (or people) who use their energy and resources most efficiently have the greatest chance of surviving and passing on their genes. In the wild, there is a certain unpredictability and danger associated with going out and getting food. It is not just a matter of picking up a reward for free. And there's real danger lurking in those 3:00 am bargain stampedes as well!

Purchasing decisions and amygdala neurons

We are not purely rational beings, however. A very recent study showed that decisions about purchasing and pricing involve neuronal activity in the amygdala, a part of the brain's limbic system associated with emotional activation and response to threat. While the cortex is uniquely human, other mammals have amygdalas as well. In this January, 2011 Journal of Neuroscience study by Rick Jenison and colleagues at the University of Wisconsin-Madison, researchers had the opportunity to study individual brain neurons in real time using electrode technology with volunteers who were already undergoing a diagnostic procedure for seizures. Research participants viewed 50 pictures of high-salt, high-sugar junk foods and had one second to decide what they would pay for each item (ranging from 0 to 3 dollars). In this way, subjective preferences were taken into account. Of the 51 amygdala neurons studied, 16 showed precise activation synchronized with price decisions. In other words, their activity increased systematically as assigned value went up. A couple of other neurons showed an inverse effect, decreasing activation with increased pricing.

How retailers try to fool your brain

At the neuronal level, our brains weigh options and assign value to different choices based on our tastes and preferences. Higher-order decision-making is involved and we have brain centers that light up to stop us from paying too much or wasting valuable resources on overpriced items. How then, do our brains get fooled to overspend? The research remains to be done in a formal way using brain scanning, but below are some possibilities:

Coupons and discounts

Perhaps these fool our insulas into thinking that we're getting a better deal than we actually are. All stores need to do is charge an outrageous price to begin with, then give you a coupon for a discount off the total purchase. This may cause shoppers to defocus from the total amount to the savings relative to what they would have paid, had they paid full price. According to research by Baba Shiv, a neuroscientist at Stanford, we tend to devalue things that cost less, and these expectations may result in our actually experiencing the the products as less pleasurable or satisfying. Because coupons are taken off the total amount, they may not devalue any particular purchase. Gifts with purchase are another strategy often used by makeup brands to make shoppers feel they are getting something for nothing without devaluing the product by discounting.

Credit cards

Buying on credit defers the pain of paying until later but allows us to consume the purchase immediately, perhaps fooling the brain's control mechanisms. No wonder department stores offer so many attractive deals to shoppers, such as points with purchases, free shipping, and so on.

Soothing and distracting sensory inputs

Our brains are primed to respond to negative signals so as to protect us from pain, it Therefore, stores often prime the environment to be as soothing and relaxing as possible so as to divert attention from the pain of paying and encourage us to stick around longer and perhaps buy more. Supermarkets may be filled with the smells of freshly baked bread, baby powder may be wafted through the air conditioning vents, snowflakes, sparkles, and soft purple cashmere wraps and scarves may adorn the displays. Relaxing music and holiday tunes are piped through the speakers and warm lattes and hot apple ciders are everywhere for sale. Is it any wonder that our brains become distracted? With all our reward circuits piping out dopamine and serotonin with each pleasantly anticipated treat, the pain/value centers may be hard pressed to keep up and do their jobs.

So, happy holidays everyone. But to avoid overspending, shop with a frugal companion who can keep you honest, decide what you want in advance and make a list, bring cash not credit cards, and forego the specials and discounts in favor of things you really need that offer value for money and fill unique niches in your closet or household.

Read my new post on the retail tricks of grocery stores here

Melanie Greenberg is a Clinical Psychologist in private practice in Mill Valley, Marin County, CA. She is also a life coach and national speaker with expertise in mind-body health, stress-management, trauma recovery, weight & eating disorders, psychological aspects of physical illness, mood and anxiety disorders.

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