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With the holidays coming up, we’re looking forward to lots of wholesome things like gingerbread and togetherness, but—we’re ashamed to admit it—we also find ourselves anticipating the less-wholesome act of shopping. Holiday gifts aside, our daily lives are filled with choices about how to consume what we consume, which products to get, and when to buy at all. Before letting the flashing colors of holiday sales seize us completely, we wanted to think about why we buy what we do, so we can focus through the clamor and make smart decisions. Here’s what we found:
It’s a Habit…Worse Than Biting Our Nails.
Undoubtedly, we are heavily swayed by our surroundings and our habits when we make our buying decisions, rather than pure reason or cost-benefit analyses. For example, conventional economic wisdom would say that, if you have lots of choices about which kind of jam to buy, you’d be more likely to buy a jar. In reality, though, people tend to be overwhelmed by the choices. Dan Ariely, a behavioral economist, points to an experiment in which academics set up a tasting booth that sometimes featured six kinds of jam, and sometimes featured 24. The days with more jam choices yielded 3% sales, whereas the days with fewer choices yielded 30% sales. To explain this irrational behavior, Ariely reminds us that people find it hard to choose based on “logical” cost-benefit analyses, and that they have habits. For the most part, people make a decision one time and stick with it, unless there’s a real reason to change: Habit. So, take this as a cue to evaluate what you do, when, and why. Are you acting in your own best interest, or simply because that’s how you’re used to acting?
Keep reading for a look at why we buy.
We Buy to Define Ourselves.
Case in point: The University of Minnesota found that people can actually feel and act differently when they use products from a certain brand because it makes them think of themselves in a new light. For example, using Victoria’s Secret products reinforces some people’s feelings of femininity and glamour—meaning that your preexisting views of yourself may have a significant impact on the way that you interact with certain brands. Similarly, a study by the Journal of Consumer Research found that we tend to be more careful when choosing items that make bigger statements about who we are (like clothing or a car) than things that don’t (like toothpaste or detergent). The next time you go shopping, keep this in mind by asking yourself whether the item in question does define you, and where the lines are between you and what you buy.
“It’s Not My Fault”: The Lure of Marketing and Branding.
Although marketing genius has made it harder and harder to face buying decisions rationally, remember that you are not a passive agent in all of this. Try to get around marketing ploys by asking yourself which products are better value, not which ones have the best advertising teams. Studies have found that some of the most effective advertising isn’t the kind that tells you what a product even is: The most important thing is to get you to remember the product’s name. Time and again, people gravitate toward buying items they’ve heard of instead of ones they haven’t, even if they don’t know anything about either except the brand names. In taste tests, participants have been shown to favor brand name items time and again, even when the product they’re testing is literally identical, just labeled differently. When decision time comes for you, keep your wits about you and remember that you’re preprogrammed to be biased by products’ advertisements. Fight your inner marketing monkey and make the wisest choice.
For more smart tips from Learnvest, check out:
What Would You Endure For Cheap Plane Tickets?
Bad Financial Habits to Drop By 30
The 3 Ps: Three Influences On Your Money Decisions