By Lynda Spence, Family & Consumer Sciences Extension Agent at UF/IFAS Extension-Marion County
Reviewed by Martie Gillen, PhD, Department of Family, Youth, and Community Sciences, University of Florida
Did you know psychology factors into your shopping behaviors? Retailers do. Various groups fund studies to understand more about consumers’ behavior, and to see what makes them buy…or not buy. Let’s consider a study about touch.
It seems that human beings are vulnerable to something known as the “endowment effect.” The theory behind this is that people value a good or service much more after their “property rights” to it have been established in one way or another. As it turns out, we don’t just feel this way about items we have actually purchased and now own. We also experience the “endowment effect” with objects we’ve merely touched. Who knew?
Please Touch Me
So how does this apply to your shopping experience? Let’s take a look. How many times has a sales associate talked about the product they wanted you to purchase and then placed the item in your hand? And what’s up with that “cut-away” packaging that allows you to feel a product?
Can’t actually pick a product up? There’s a way around that. For example, it’s not an accident that laptops displayed in stores are not opened the whole way. Retailers know you will most likely open it completely. Once you have your hands on it–well, you know the rest.
Casually looking at some clothes? Did the sales associate encourage you to start a dressing room? Once you try it on, chances are better that you’ll buy. Auto shopping? How about that test drive? And on and on.
If we want to play the shopping game successfully, it helps if we level the playing field between consumer and retailer. Understanding how the endowment effect can play into how we spend our money helps to even the playing field between consumer and retailer. When we are aware that merchandising strategies influence our shopping decisions, we become more empowered. Now that you know about the endowment effect, make sure you are making “sense” when it comes to how you spend your hard earned “cents.”
(Photo credit: Shopping by Jorge Franganillo. CC BY 2.0.)
References:
Consumer Credit Counseling Services of San Francisco. (2013). Beware the endowment effect. Retrieved from https://www.cccssf.org/education/quicktips/2013/web_0313.html
Holden, R.K. (2012). Avoiding the endowment effect. Negotiating with Backbone: Eight Sales Strategies to Defend Your Price and Value. FT Press. Upper Saddle River, New Jersey.
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