Splurge, For Sure
With the holidays nearing fast, even procrastinating gift-givers are headed to the mall. And they're not alone: A survey by the National Retail Foundation found that as of Dec. 10, 2010, only 10 percent of Americans had finished their Christmas shopping. Another 37 million hadn't even begun.
The pressure is on for retailers, too, many of whom depend on the holiday shopping season to keep them in the black. So while you're trying to seek out the perfect present for Grandma, marketers are hoping you'll throw a few extra items into your cart. [The Truth About Shopaholics]
Here are the top tricks shops use to tempt you to splurge.
Take a sale and add a sense of urgency, and you've got holiday marketing in a nutshell. Black Friday is the best example, when retailers open their doors in the wee hours of the morning (or evening) after Thanksgiving and offer deep discounts for just one day.
Limited-time-only sales may boost impulse buys, but retailers may not necessarily want consumers to feel too rushed. A 1993 study published in the journal Advances in Consumer Research found that as Christmas approaches, people feel more pressure to buy gifts quickly. That leads to quick, pre-planned shopping trips, instead of the type of browsing that can encourage extra purchases.
Sales, Sales, Sales
It's no surprise: Starting the day after Thanksgiving, stores go crazy with discounts, and people respond. Just the act of bargain hunting can be a reward, according to Peter Darke, a marketing professor at York University in Toronto. His research has found that even when people are given $10 to buy an item and told they don't get to keep the change, they get excited about getting a discount. People see price cuts as a reflection on themselves as savvy shoppers, Darke said in an interview.
"There's also a tendency for people to look at the virtuous side of the discount and use that as an excuse to make a purchase they wouldn't ordinarily [make] otherwise," Darke told LiveScience.
One pitfall of discounting goods is that people may start to think of the product as cheap. York University's Darke did one study in which people judged the value of a pair of headphones priced at $60 and marked down to $40. Instead of seeing the headphones as a deal, the volunteers believed they were only worth $40 in the first place.
"If the price is discounted, they will sometimes say, 'What's the reason for it being on discount? Maybe because the quality isn't so high,'" Darke said.
A good way to get around the problem is to offer a free gift instead of a discount. A $20 free gift costs the shop as much as $20 off, but consumers don't link the gift to value in the same way they do discounts, Darke found.
The makeup counter is offering free perfume spritzes, and that stand in the middle of the mall wants you to try a new face cream. Turn around, and someone in a Santa hat is offering you freshly baked Christmas cookies.
Free samples are everywhere around the holidays as retailers try to prompt impulse buys and get customers hooked. It just might work. One 1991 study in the Journal of Consumer Marketing found that people given chocolate samples in a store made more chocolate purchases, though not necessarily of the chocolate they'd tasted. A 2004 study published in the journal Marketing Science found that the effectiveness of free samples varies widely, but can produce boosts in sales as much as 12 months later.
It's beginning to sound a lot like Christmas
It's hard to escape Christmas music this time of year, and that's no mistake. "[Retailers] think, 'If we make the holiday prominent in consumers' minds, they'll buy more,'" said Lisa Cavanaugh, a professor of marketing at the University of Southern California.
Up-tempo music keeps people moving, Cavanaugh said, while slower, softer songs encourage browsing. Matching the music to the environment may be key: One 1993 study found that classical music induced wine-buyers to spend more money. It's not that the shoppers bought more wine, the researchers reported in the journal Advances in Consumer Research. Instead, the elegant music influenced them to buy pricier bottles.
Do you smell pinecones?
Likewise, retailers who use inviting scents to lure shoppers may want to consider the big picture. Nice smells alone don't make people like a shop more, according to a 2005 study published in the Journal of Business Research. Researchers created a mock retail store and asked volunteers to provide feedback under the pretense that the shop was considering opening a new location in town.
Some of the volunteers went into the store after the researchers sprayed it with a room spray called "Enchanted Christmas," while other volunteers experienced no smell. In both the smell and no-smell conditions, volunteers heard either Amy Grant singing a Christmas song or a non-holiday song.
As it turned out, people rated the store more favorably when the Christmas scent and the Christmas song coincided. When the two cues were out of phase (say, Christmas scent with non-holiday music), people didn't rate the store any better and sometimes liked it less.
Turning your friends into salespeople
One of the newest holiday marketing tricks doesn't take place in the store. Retailers are increasingly turning to social networking to recruit average shoppers as advertisers. Take JCPenney, which is offering coupons for people who "check in" to their stores using smartphones. Of course, "checking in" on social networking services such as FourSquare or Twitter transmit your location to all of your cyber-friends – which translates into free publicity for the shop.
Other stores have their own ways of crowdsourcing their advertising. Walmart's Facebook-based "CrowdSaver" asks people to becomes fans of the store on the social networking site. If enough people become new fans, Walmart offers a discount on a new item. And clothing store Gap had launched a sales promotion involving GPS-enabled reindeer (yes, real reindeer) in a pasture in Minnesota. Each reindeer, visible on webcam, is associated with a sale, and users can boost their favorite – and Gap's public profile – by Tweeting their support. Rudolph would be proud.