VU marketing expert: how not to fall into the trap of discounts and skip unnecessary items?

Both in-person and online stores use various tricks to encourage impulsive shopping, and the holiday season is very favorable for this, says Dr. Indrė Radavičienė of the Faculty of Economics and Business Administration of Vilnius University (VU FEBA) during the Mokslas Be Pamokslų podcast. However, consumers are becoming more rational and more aware of unfair offers, and there are ways to combat reckless buying.

Blue color at the stores is soothing

According to Dr. I. Radavičienė, the visual representation of price has a significant impact on consumer decisions. Researchers have proven that when the price ends with a nine, consumers treat it as lower, which creates an incentive to buy a product that supposedly saves money, even though it is just one cent.

According to the researcher, the consumer is also encouraged to buy when instead of the full amount the price indicates the monthly or hourly equivalent, e.g., how much a single day of 30-day subscription costs.

Dr. I. Radavičienė says that the incentives to buy are transferred to both in-person and electronic stores.

“Those incentives can include placement on shelves or floor layout: customers have to walk a certain route to reach the item they are looking for and on their way to the said item, exposed to impulsive incentives, they add various completely hedonistic, pleasant goods in their carts,” the VU FEBA researcher said.

According to Dr. I. Radavičienė, our mood influences the purchase. “If we get paid that day and have a lot of money in our wallet, we’re in a good emotional mood, and we’re likely to be inclined to spend more. Stores, on the other hand, have a lot of incentives, such as footprints on the floor that everyone follows, and it works like navigation to reach a certain place,” she said.

According to the researcher, it has been proven that the blue color of the interior of the store is soothing, the environment becomes more acceptable. Furthermore, there has been an increasing focus on scent marketing recently.

“There was an experiment: when large queues formed at the check-out, stores played faster- and slower-pace music. The experiment proved that faster music implied that employees at checkouts work faster,” Dr. I. Radavičienė said.
According to the  VU FEBAlecturer, the purchase is also encouraged with the help of inexpensive items at the check-out aimed at pleasures.

Online shoppers are discount hunters

According to Dr. I. Radavičienė, the Internet often follows the dynamic pricing principle, i.e., constantly changing valuable offers. When shopping online, consumers can be like discount hunters - they can spend more time comparing goods while sitting warm and comfortable at home.
However, there are various tricks to encourage consumers to buy online, such as “Click here and now” or “Hurry up,” giving a very short time to buy a product.

“However, consumers realize that after closing the e-shop, after a while, they receive the same or even better offer,” the researcher said.

According to Dr. I. Radavičienė, stores also use the anchor effect, it’s when the area next to the price also indicates how many buyers have already bought this product, how many are satisfied: “I always say one should be skeptical. Has anyone really measured how satisfied those people are?”
Discounts are a pleasure

The VU FEBA lecturer says that the consumers aim to buy a useful product or service while the stores aim to encourage purchase, to make us fill up our carts and buy more at once.

“On the other hand, both parties want the purchase to be beneficial, the consumer to return and thus build loyalty,” she adds.
According to the researcher, discounts give pleasure, we are happy to buy cheaper.

“Pleasure is caused by the winning phenomenon, or the win-win behavior. It’s when a person has the opportunity to not only buy one product but at the same time get another product 50% cheaper or try the product for free. It’s a massive winning phenomenon,” Dr. I. Radavičienė said.
According to her, discounts can also have a dominance effect when the consumer is no longer the one who decides.

“If the discount is very high and it comes with another free offer, like two items for the price of one, we are no longer deciding. The decision-maker is the discount, it controls our emotions, us as buyers. We can see this during the biggest sales, when, for example, consumers are pushing each other, trying to get around each other to buy the goods they don’t necessarily need,” the researcher says.

According to Dr. I. Radavičienė, although we may just be happy to buy, we don’t necessarily buy exclusively the items we don’t need: “We may be attached to a certain brand and very loyal to it, we will always feel a great pleasure if the brand offers a product for cheaper. Then, we are not only the winners but also feel thrilled and get the pleasure of buying our favorite item cheaper.”

The researcher notices that when buying various items, people diversify their everyday life, trying to compensate for the routine, boredom, and perhaps even existing complexes and shortcomings. “In this case, shopping is like a way out, rehabilitation, things become a means to live more fun, sometimes more meaningful life,” she says.

Marketing is more than manipulation

Dr. I. Radavičienė assures that the science of marketing does not analyze consumer manipulation, instead, it looks at ways to create the best value and communicate it.

According to her, marketing aims to build a relationship with the consumer, encourage his or her loyalty, get feedback: more successful companies are mostly those that promote not only impulsive but also deliberate purchases and encourage the consumer to return.

“Research shows that even a small discount causes the consumer an emotional pleasure and a greater perception of price fairness. Consumers always think that the seller wants to profit from them or that the profit earned from the product is high enough. If the seller gives even a small discount, the trader is considered to be acting in good faith in giving the opportunity to buy the product cheaper, reducing his profit margin,” the researcher said.
The VU EVAF lecturer notices that humanity is accustomed to buying goods at a discount, which leads to the waiting period: consumers don’t buy the product at the usual price because they expect a discount.

“There are companies that treat discounts as a marketing, communication trick. But this is not the real discount a trader applies to reward and provide the opportunity to buy a product cheaper. This becomes a manipulative trick,” she said.
Holiday period is a good time for tricks

Dr. I. Radavičienė states that sellers use the holiday season to use tricks that encourage consumers to act even more recklessly. As early as November the sellers remind that Christmas is coming, decorating showcases, launching email marketing and holiday contests, sending greetings to customers.
“During the holiday season, we are more relaxed and therefore tend to spend more money. Discounts, promotions and sales work best, everyone is looking for good deals at that time because they need to buy presents for their loved ones,” she said.

According to the researcher, although sellers announce promotions for a limited holiday period, this is not necessarily true, discounts may continue after the holiday season. Sellers use emotional tricks, e.g., they offer to pack a product as a present.

“We begin to feel slight tension in November and it continuously increases. By the second week of December, we feel a great deal of tension if we don’t yet have all the presents wrapped and hidden in the closet. We then become completely spontaneous because there is a high probability that we will no longer be able to order goods online and get them before Christmas. We then buy everything we see,” she said.

Not everyone is equally susceptible to discounts

The researcher says a lot of research is being done to try to prove that women are more impulsive than men or that men are more affected by the red discount color than women. However, according to her, impulsivity is hardly determined by gender. It mostly depends on environmental factors, the mood.

“In general, a person may be more impulsive due to personal characteristics. Some may be more price-sensitive because their income is lower, those people tend to wait for discounts. A person can be a great hedonist, loving to relax and feel pleasure. People like that feel the need to reward themselves, it’s their way of achieving diversity. In addition, the more skeptical a consumer is, the more reluctant he is to buy at a discount,” says the researcher.
According to some people value social responsibility: they are more motivated not by an individual discount but by the fact that part of it will go to charity.
Dr. I. Radavičienė notices that consumers are becoming more rational, they are beginning to identify dishonorable incentives, unfair prices: “When people notice this, they take more control of themselves and say to themselves: calm down, maybe I don't need it today, I can come back to the same e-store tomorrow. Maybe, for example, I can determine the amount I want and can spend that day.”

The researcher discussed an experiment where participants’ credit cards were frozen in ice.

“A person is presented with a very attractive offer and is told that he has time to calm down and will definitely be able to buy the item when the ice melts. Most of the participants in the experiment decided they no longer needed that item. Therefore, I suggest cooling down and waiting a while. Then, you will be able to control your emotions, not be so impulsive and spontaneous,” says VU FEBA lecturer.