What is it that convinces us we must have some object? And what entices us into stores and compels us to plop down hard-earned cash (or well-worn plastic) for it? Is it the clever strategies of advertisers who know our weak spots? Do we have an insatiable need to shop? Can “stuff” really make us feel good?
Eager to get a grassroots view of American consumerism, Lee Eisenberg, former editor of Esquire magazine and an executive at Lands’ End, got a job as a floorwalker at Target. Beneath the big red dot, he learned firsthand about the complicated selling machine that lures us to the cash register. He also combed through piles of academic research—“There is no part of American consumerism that hasn’t been studied,” he says—to understand the complicated humanbuying machine and infused his latest work, Shoptimism: Why the American Consumer Will Keep On Buying No Matter What, with both the selling and buying sides of the equation. (Read an excerpt from the book.)
But why dwell on shopping psychology when there are far fewer dollars to spend? With optimism for better economic times building, perhaps now is the ideal time for a little navel-gazing about our own shopping habits. And, as Eisenberg told AARP Bulletin Today, a customer’s desire to acquire is not always such a bad thing.
Q. With fewer customers in stores, how are retailers compensating?
A. One way is by controlling their inventories. There’s a saying in the industry that in holiday season “stack ’em high and see ’em fly.” Last Christmas, retailers didn’t anticipate the collapse in October and November and had huge levels of merchandise. Customers could see discounts of 60 to 70 percent. Stores buy holiday merchandise six to eight months prior. So if you roll back the clock to spring, we were all pretty morose.
Q. If now it’s “stack ’em low and hope they go,” how can consumers get great deals?
A. If you want a specific toy or a specific consumer electronic item that you’re afraid won’t be there, buy early. But if you’re after a sweater, my advice is to wait a little bit. If the sweater’s gone, chances are there’s another perfect sweater not far away.
Q. In general, what pricing strategies do retailers use to get us to buy?
A. One strategy is to impose a sense of scarcity by advertising “one week only” or “while supplies last.” Another is to plant the idea that a product is versatile: “Has 101 uses!” or “Buy a pack for home, picnic and your car.” There’s also the old standby, “Three cans for $6.”
Q. Why does that work so well?
A. There’s a theory accepted by most academic researchers that we have in our head a reference price of what something should cost, whether we’re conscious of this or not. These tactics move our minds off the reference price and into another realm. We think we should stock up, or we’ll get a lot of use out of the product, or that there might be an occasion to use it that we’re not thinking about. These tactics tend to shift the debate onto another plane.
A. I’ll give you another we actually used at Lands’ End—a classic selling technique called “good, better and best.” In a catalog, or even in the store, we offered a product in three levels of quality and price. Take a down jacket. The high-price version has a fur-lined hood and has a down fill that will keep you warm in cold down to -50 degrees. Say it’s $220. We’d feature that jacket relatively small on the spread, or in the store, off to the side.
Q. In a not-very-noticeable place?
A. Yes. But there’s also an inexpensive version that costs, say, $89. It’d have less down, no fur-lined hood, and come in few colors. Both of those extremes pointed to the “hero” product, which was the one shown big on the page or prominently displayed in the store. It has more features than the low-priced one but fewer than the high-priced one. And it’s the one we want to sell the most of because we have the most in stock.