The global financial crisis that started in 2008 hit consumers hard. Three years later, they're still reeling. Spending is down across the board, and even the affluent are watching their pennies. In this fearful climate, retailers are applying ever more scientific and psychological tactics to lure shoppers. This was made clear to me on a memorable day in 2010 when I visited the laboratory outside Chicago of one of the world's largest consumer-goods manufacturers.
After driving nearly two hours, I reached my destination: a huge, imposing warehouse with no outward signage and a vast parking lot full of cars. A friendly receptionist checked my identity, had me sign all sorts of paperwork and directed me through a door labeled CONTROL ROOM. The space I entered was massive and resembled images I've seen of NASA's operations area--row upon row of people staring intently at hundreds of screens. Only instead of monitoring satellites, they were watching shoppers pushing carts through the aisles of a supermarket designed to test their responses to different marketing strategies. "Take a careful look at this lady," said one of the monitors, pointing to a middle-aged woman on the screen. "She's about to enter our latest speed-bump area. It's designed to have her spend 45 seconds longer in this section, which can increase her average spend by as much as 73%. I call it the zone of seduction."
This section of the market was different from the usual aisle. It had upscale floor tiles--a type of parquetry imparting a sense of quality. And instead of the cart gliding quietly across nondescript linoleum, it made a clickety-clack sound, causing the shopper to instinctively slow down. The shopper's speed was displayed at the top of the screen, and as soon as she entered the zone, her pace noticeably slowed. She began looking at a tall tower of Campbell's soup and then plucked a can off the top. Bingo! The sign in front of the display read, 1.95. MAXIMUM 3 CANS PER CUSTOMER. Before the shopper sauntered off, she had selected three cans for her cart.
Sophisticated as we may be, there's no getting away from our more primitive survival technique of hoarding food to see us through lean times. So when we come across a deal that appeals to this ancient instinct, dopamine is released in our brain, giving us an instant rush of pleasure. My guide explained the exercise: "Yesterday we ran exactly the same offer, with two distinct differences. There was a dollar sign in front of the price and no 'Maximum 3 cans per customer' line. We also gave the shoppers smaller-size carts and changed the floor tiles." These seemingly small changes translated into big differences. On the first day of the experiment, only 1 in 103 shoppers purchased Campbell's soup. Today, however, about 1 in 14 succumbed--a sevenfold increase.
Over several months of experimenting, the team noticed that using a dollar sign in front of the price decreases shoppers' likelihood of making the purchase. The dollar sign is a symbol of cost rather than gain. Removing the sign helps the consumer sidestep the harsh reality of outstanding bills and longer-term financial concerns. No doubt the larger cart and the floor tiles also played their part, but what was most surprising was the impulse to hoard. The dictum allowing only three cans per customer sealed the deal.