The Psychology of Shopping

28 March 2006 By: Vlad Tarko, Senior Editor, Sci-Tech News

The Psychology of Shopping

How do you choose what to buy and why do you choose a certain store?
Researchers from MIT have shown that people are most susceptible to be influenced by
advertisers and promotions at the entrance of the store. According to the scientists, people
usually don't have their shopping goals very clearly pre-determined; they decide not only
what specific product to buy but also what kind of product they want to buy during their
wondering through the supermarket's aisles.

"Consumers start with fuzzy shopping goals, which become more concrete as the shopping
experience progresses," explain Leonard Lee and Dan Ariely. "Because of the initial lack of
concreteness of their goals, consumers' sensitivity to external cues is likely to be higher in
the earlier stage of their shopping when their goals are more malleable."

Lee and Ariely have conceived a series of tests showing that consumers can be influenced
to spend more or less than usual, depending on the conditional coupons presented to them
at the entrance. On the other hand, when the coupons were given inside the store they had
little effect.

"When the required spending level is higher than their typical spending level, they spend
more; when the required spending is lower, they spend less," write the authors. "This
experiment also demonstrates that customers' spending tends to shift with the minimum
spending conditions stated on their coupons."

In another related study, also to appear in the forthcoming issue of the Journal of
Consumer Research, researchers from the Northwestern University have documented the
so-called paradox of choice: customers generally want to have as many options as possible
but at the same time want to be able to decide what to buy as easily as possible.

Alexander Chernev explained how we generally get around this paradox by observing that
our shopping experience is "a decision process that comprises two different stages:
selecting an assortment and, subsequently, selecting a particular option from that
assortment."

Thus, the two conflicting goals, "maximal flexibility and minimal decision complexity", each
operate in a different stage of the shopping experience. The interesting conclusion of the
study is that large stores may get many customers inside (because the goal of maximal
flexibility functions in the first stage of the shopping experience), but then these customers
may not buy so many products as they otherwise would (in a smaller store) simply because
they cannot decide (the decision complexity is too large).

In other words, large stores attract many customers but there is a downfall: "increasing the
size of the assortment tends to complicate the decision process and decrease the overall
probability of purchase", writes Chernev. Thus, there exists an optimal size of the store,
optimal in the sense that customers are spending in there the largest amounts of money
buying the largest number of products.


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