We’ve been told over and over (and over) again that “‘tis the season to be jolly.” But you know what? That’s not easy to do if you wander into a store during the holidays, because there’s a good chance that you’ll be walking out with a heavier bag and a lighter wallet than you intended.
So, how do stores (with their hearts that are two sizes too small) get us to buy and spend more at Christmas? Behold the playbook.
The Scarcity Effect
Most people think that something ominously dubbed “The Scarcity Effect” can only refer to supply. Well, most people are wrong.
The Scarcity Effect also refers to dates — i.e. if we feel that there is a limited amount of time to buy something (or do something), then we short-circuit our clear-thinking faculties and tend to make rash and, alas, regrettable decisions.
There are a couple of common ways that this tactic manifests in both the retail and e-commerce landscape. The first is “one day” or “48-hour” or “one week” sales that outright state, or at least strongly imply, that the products or services in question will never be this cheap again during the holidays. The other is to offer Christmas-only bundles.
Either way, what happens is we notice products and services that we otherwise would have (wisely) ignored, and once our attention is fixated and we start to feel the vice grip of the Scarcity Effect, we are that much more vulnerable to making an unwise purchase.
You don’t have to have a Ph.D. in Consumer Psychology to know that stores pipe in endless streams of holiday music, because it puts people in a festive — and hence, spending — mood. Frankly, stores do this throughout the year.
However, during the holidays, stores take stimulation overload to a whole new level, and it’s not because Buddy the Elf happens to be working there. It’s because the more festive stuff we’re exposed to — lights, decorations, music, salespeople forced to wear Santa hats, and so on — the more vulnerable we are to reacting to social norms (i.e. following the herd), and the more anxiety we feel about missing out on a “something big”; especially when this is combined with the Scarcity Effect as discussed above.
The end result, again, is that we are more reactive and less deliberative, which is exactly how we shouldn’t be when we’re buying things.
Lack Of Perception
Last but certainly not least: all of us have walked into a store during the holidays with the explicit intent of buying specific items, only to come home with all kinds of wacky stuff (like a singing rubber fish). What’s the deal?
It’s this: according to psychologists (and you might add prudent financial advisors to that mix), people tend to overestimate their talent for predicting our future needs. In other words, we think we need 10 things when we really only need a few.
It’s easy (and unfortunate) to see how this plays out in the holiday shopping context. People head to stores or online, and end up buying much more than they need — because they just plain suck at forecasting. Nowhere is this tactic more vividly illustrated than places like Costco, where you see people putting stuff in their carts as if a nuclear apocalypse was nigh.
The Bottom Line
Stores play their games to get us to buy more and spend more. It may in some cases be unethical, but it’s not illegal. There’s no law against piping “All I Want for Christmas” into a store non-stop (though perhaps there ought to be).
In light of this, the best — and really, the only — way we can protect our sanity and our money is to be aware of what’s going on. By doing this, you’ll be able to save so much money on gifts that you can buy yourself something sweet (because you’ve been good all year, right?), like a set of VenomRex 20” VR 601 wheels.
In fact, once you know about these games, it becomes amusing to see how they work. You’ll be standing in the check-out line with precisely what you came in to buy, while the person next to you will have more singing rubber fishes in their cart than they’ll ever know what to do with.
And in case you need it — and we all do from time to time — here’s a reminder of the REAL meaning of Christmas.
If you are interested in even more business-related articles and information from us here at Bit Rebels, then we have a lot to choose from.