Who Makes Your Buying Decisions?

Finance journey resource: Are you looking for ways to save money and reduce expenses at your small business? See this website for more information.

My fiancé ran an experiment at work. Employees at his office get the very nice benefit of several shelves of snacks and a fully stocked drink fridge, and he is in charge of keeping them stocked. Inside the drink fridge, there are three flavors of sparkling water: lemon, lime, and mixed berry. The lime and mixed berry are stocked on the bottom shelf, and the lemon is stocked on the next shelf up with the orange juice. Every few days when he restocks, he notices that much more of the lemon has been consumed than either the lime or the mixed berry. This week, he decided to switch the lemon with the mixed berry, so the lemon was on the bottom shelf and the mixed berry was on the next shelf up. Sure enough, when he went to restock the fridge, mixed berry was the most consumed flavor.

This tells us that people make their decisions of which flavor of sparkling water to drink based on the positioning of the bottles on the shelves rather than the flavor itself.

You might not be aware of it, but every time you go to the store to buy something, you are being deliberately guided to make certain decisions. A well documented example is the supermarket. If you haven’t read “What to Eat” by Marion Nestle, I highly recommend it. As Nestle explains, “supermarkets are in the business of offering ‘choice’ … but they do everything possible to make the choice theirs, not yours.” Their are legions of behavioral researchers figuring out exactly how consumers make decisions so supermarkets can lay out their stores in such a way that will result in maximum profits for them. Here are the basic rules supermarkets follow:

• Place the highest-selling departments (meat, dairy, produce, and frozen foods) in the areas that get the most traffic (the periphery).
• Place items that sell especially well based on impulse or look or smell enticing (produce, flowers, freshly baked breads) near the entrance.
• Use the displays on the ends of aisles to sell highly advertised products that people are likely to buy on impulse.
• Place high-profit, center aisle food items sixty inches above the floor, where they are easily seen by adults.
• Devote as much shelf space as possible to brands that generate frequent sales.
• Place store brands immediately to the right of name brands. People tend to shop the way they read, from left to right. So their eyes are drawn to the name brand, but they naturally look to the right to see the store brand too.
• Avoid using islands because they don’t have as good traffic flow.
• Don’t create gaps halfway through an aisle that allow shoppers to escape without seeing all the merchandise, unless the aisles are so long that customers complain.

To become a better shopper, you must understand the ways stores are trying to guide you to make certain purchases. But even if you know they’re taking advantage of your decision-making tendencies, it’s still hard to resist gravitating toward the products they have carefully selected to entice you. The best way to shop in your own interest rather than the store’s is to make a list and stick to it. If there’s nothing you need in a particular aisle, don’t even walk through it. When comparing brands, remember to look up and down to see everything that’s available to you. If you do see something on the end of an aisle that entices you, find where it’s located in the aisle where there may be a cheaper store brand next to it.

Above all else, for everything you buy, ask yourself why you want that particular product. What makes that brand better than the other brands? Is there another product that does the same basic thing but costs less? Is there a no-cost option that would be just as good (even if it’s a little less convenient)? Don’t merely buy what the stores put in front of you. Question every purchase you make.