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10 Ways Retailers Trick Holiday Shoppers

The holiday shopping season is here! Pushed earlier due to the corona virus pandemic, Amazon’s Prime Day marked October as 2020’s unofficial kick-off to end-of-year spending. As in previous years, some competitors had their own version of a Prime Day sale. Even Etsy got in on the action. The holiday season is a perfect opportunity for marketers and retailers to tap into a far more impulsive buyer, as pressures and emotions run high. It’s a time when instinctive rather than logical judgment tends to steer our purchase decisions.

The percentage of new shoppers during this sales period is significantly higher than at other times of the year. Also—during the holiday season, a typical consumer purchases an average of 3.5 items on a single visit to a website. At any other time of the year, a purchase of only 1.2 items takes an average of three site visits.

What’s different this year is the expected rise of online sales due to pandemic social distancing. According to the financial consulting firm Deloitte, we can expect a surge of 25-35% in e-commerce 2020 holiday sales. That’s good economic news considering these unprecedented pandemic times. But let’s talk about how to protect your wallet.

Here’s how to make holiday gift and food purchase decisions without zeroing your bank accounts:

  1. Free shipping. Web retailers know shoppers will leave their cart to avoid paying a shipping fee, so they often offer free-shipping deals if you spend at or above a specific dollar amount. During the holiday shopping period that dollar spending amount is often lowered to further entice us. So, what do we do if the item we need isn’t enough to qualify for free shipping? We spend time searching for extra items to add to the order. Shipping can get pricey, after all. But sometimes it makes sense to complete your original order and pay under $10 in shipping; other times you can find something else you’ve been meaning to buy and add it to the order—or even a gift for a loved-one’s upcoming birthday.
  2. Free gift wrapping. Another simple yet persuasive sales technique during the holiday season is to spend a certain dollar amount, or even a bundled purchase, to receive free gift wrapping. For example, a well-known candle company annually announces promotions such as buy three candles and an accessory, or spend a specific dollar amount, and score free gift wrapping.
  3. Holiday sales events. Most people know a store’s announcement for its “biggest sale ever” doesn’t mean it is. You’ve probably experienced visiting a store that advertised sale prices “as much as 70% off,” only to discover that most inventory is 20% off except for one or two endcaps in the back. It’s not false advertising; the ad clearly includes the qualifier “as much as.” So, remain skeptical of sale claims and don’t get pulled-in to the hoopla of a supposed holiday or once-in-a-lifetime deal. Same advice goes for a “secret” sale. These tactics (sometimes called loss aversion) are great sales motivators because they’re like telling someone he/she is about to lose a great opportunity.
  4. Sense of urgency. This popular time limitation (“today only,” “available for the next 24 hours,” etc.) is used during holiday sales season to influence you to take action quickly. Urgency is the feeling that taking action in the current situation is so crucial that it overrides the natural tendency to put off making a decision. Now people feel they have to buy immediately, today, this second.
  5. Holiday coupon savings. Coupons lure you in. If the after-coupon price is significantly lower, then the purchase is financially sound. Go ahead and use those coupons. They’re a great opportunity to purchase something you want to try; but refuse to pay full, or even sale, price for.
  6. Psychological pricing. “Charm pricing,” as it’s known, is the use of the number 9 at the end of a price. It must be the oldest trick in the book. How is it that the difference of one cent makes us think it’s a better deal? Other psychological pricing tactics are dropping the dollar sign (often used at high-end retailers and restaurants), establishing a per-customer limit on sales, and ads using a small type font.
  7. Multiple-purchase pricing. A favorite ploy of grocery stores is the 10-for-$10 promotion. The store uses this tactic to reduce inventory. If it’s an item you are certain to use multiples of then it’s a great buy. But if seven of the 10 items will sit in your pantry unused by the expiration date, it’s better to buy the three items you are certain to use at the regular price of $1.09, for example.
  8. BOGO deals. Similar to multiple-purchase pricing, the popular BOGO (or “buy one, get one” free) may dupe you into buying more than you planned. If you’re already planning to purchase the second item, it works out well. But if you rationalize the purchase of unneeded clothing due to a BOGO incentive, (one for a friend or family member, one for yourself because, you know, it’s the holidays!), you didn’t benefit from the savings offer. Don’t empty your pockets.
  9. Upselling items. When a seemingly helpful cashier mentions the cashmere socks are only a couple dollars more than the cotton ones you brought to the register, you’re being upsold. Or, did you ever notice some establishments’ sales staff ask something like, “What else can I help you find?” to create an expectation? Resist the temptation.
  10. Point-of-sale add-ons. This promotional strategy is the last opportunity to get shoppers to spend. These are the treat and tchotchke displays by the register that are especially plentiful during the holidays. Or the friendly sales associate who asks if we’d like to save 25% by opening a store credit card. You’re not safe from this tactic online, either. The review your cart stage of the purchase provides an opportunity for the merchant to display photos of items “you may also be interested in.” Refuse to fall for it.

Bottom line: Nothing is a bargain, sale, or deal unless you already needed it in the first place. Be a savvy shopper this holiday season by using these tips. Another word to the wise: Shop early before inventory runs out or you have to pay for premium shipping!

Resources: Amazon, CNBC, Deloitte, Department of Commerce, Etsy, Money Talks News