Take 5: Holiday Shopping
Skip to content
Marketing Dec 5, 2017

Take 5: Holiday Shopping

Our faculty explain the reasoning behind some common shopping scenarios.

People crowd escalators.

Michael Meier

The holiday shopping season is here in full force. And whether you are waiting in long checkout lines, browsing thousands of iPhone cases online, or even putting together your own wish list, Kellogg Insight has you covered.

This month, our faculty explain the psychology and economics behind some common holiday shopping scenarios, so you can navigate them with efficiency and cheer.

1. Don’t Let Choice Overwhelm You

Did you start your holiday shopping by plugging “iPhone 6 case” or “infinity scarf” into Amazon? If so, the tens of thousands of search results may have been enough to make you close the tab and save shopping for another day.

“Having a choice is a very basic need,” says Ulf Bockenholt, a professor of marketing at Kellogg. We feel satisfied when we are able to make a choice that is right for us—but there is such a thing as having too many choices.

Bockenholt and his Kellogg colleagues Blakeley McShane and Alexander Chernev recently studied a phenomenon called “choice overload,” the negative psychological, emotional, and behavioral effects of having too many options to choose from. Think “buyers remorse” or “analysis paralysis.”

When are we most likely to experience these negative effects? In two studies, the researchers find that some broad factors can predict choice overload. These include the complexity of the choice set, how much you understand about your own preferences, and the difficulty and type of decision you are making—if you must choose quickly, for instance, or whether you are actually clicking “buy” versus simply putting something in your cart to purchase later.

As a customer, it may not be possible to completely avoid choice overload this time of year. But to ease the stress, do some research to narrow down your options and truly understand your preferences before it’s time to take out your credit card.

2. Know Your Winding Lines

If you dare to enter a brick-and-mortar store—or bakery or coffee shop or post office—in December, you may encounter another kind of hassle: lines. Lines are a nearly inevitable result of “system constraints”—constraints in staffing, space, or other resources—on the part of the service provider. It is nearly impossible for businesses, particularly ones that rely on foot traffic, to predict and adapt to ever-changing levels of demand. So we customers get in line.

As Marty Lariviere, a professor and chair of operations at the Kellogg School, puts it, “queuing in many instances is the price we pay to maintain flexibility. If you don’t want to have to schedule every service you might consume ahead of time, you have to accept queuing.”

What can be done by businesses to alleviate frustration when the queues get a little too long? Lariviere explains that many retailers use “pooling,” where a single queue is served by multiple cashiers. This has the advantage of reducing customers’ stress about being stuck in the wrong line. It also increases perceptions of fairness. But if it allows cashiers to slow down a bit, it may not necessarily lead to shorter average wait times.

3. Embrace Outlet Malls

If you relish hitting up outlet malls to score a perfect gift, you are not alone. Factory outlets are a fast-growing segment of the retail industry.

And while outlet malls may have a bad reputation as a dumping ground for defective goods, it is a reputation that is generally undeserved.

Lakshman Krishnamurthi, a professor of marketing at Kellogg, explains that rather than specializing in defective or otherwise unwanted inventory, outlet stores offer distinct lines of products. “There is vertical differentiation,” he says. “There’s a higher-price and higher-quality option, and then you open an outlet where products are lower price and lower quality.”

And interestingly, research from Krishnamurthi and a colleague finds that rather than turning customers off from brands, shopping those brands at outlet malls seems to encourage customers to visit traditional retailer stores more often.

“Once customers adopt the outlet channel, they increase spending in the retail-store channel,” Krishnamurthi says.

The researchers hypothesize that outlet malls allow customers to become increasingly comfortable with the brand at a lower price point.

About the Writer
Kellogg Insight Editorial Team
Most Popular This Week
  1. One Key to a Happy Marriage? A Joint Bank Account.
    Merging finances helps newlyweds align their financial goals and avoid scorekeeping.
    married couple standing at bank teller's window
  2. Take 5: Yikes! When Unintended Consequences Strike
    Good intentions don’t always mean good results. Here’s why humility, and a lot of monitoring, are so important when making big changes.
    People pass an e-cigarette billboard
  3. How Are Black–White Biracial People Perceived in Terms of Race?
    Understanding the answer—and why black and white Americans may percieve biracial people differently—is increasingly important in a multiracial society.
    How are biracial people perceived in terms of race
  4. Will AI Eventually Replace Doctors?
    Maybe not entirely. But the doctor–patient relationship is likely to change dramatically.
    doctors offices in small nodules
  5. Entrepreneurship Through Acquisition Is Still Entrepreneurship
    ETA is one of the fastest-growing paths to entrepreneurship. Here's how to think about it.
    An entrepreneur strides toward a business for sale.
  6. Take 5: Research-Backed Tips for Scheduling Your Day
    Kellogg faculty offer ideas for working smarter and not harder.
    A to-do list with easy and hard tasks
  7. How to Manage a Disengaged Employee—and Get Them Excited about Work Again
    Don’t give up on checked-out team members. Try these strategies instead.
    CEO cheering on team with pom-poms
  8. Which Form of Government Is Best?
    Democracies may not outlast dictatorships, but they adapt better.
    Is democracy the best form of government?
  9. What Went Wrong at AIG?
    Unpacking the insurance giant's collapse during the 2008 financial crisis.
    What went wrong during the AIG financial crisis?
  10. The Appeal of Handmade in an Era of Automation
    This excerpt from the book “The Power of Human" explains why we continue to equate human effort with value.
    person, robot, and elephant make still life drawing.
  11. 2 Factors Will Determine How Much AI Transforms Our Economy
    They’ll also dictate how workers stand to fare.
    robot waiter serves couple in restaurant
  12. When Do Open Borders Make Economic Sense?
    A new study provides a window into the logic behind various immigration policies.
    How immigration affects the economy depends on taxation and worker skills.
  13. Why Do Some People Succeed after Failing, While Others Continue to Flounder?
    A new study dispels some of the mystery behind success after failure.
    Scientists build a staircase from paper
  14. Sitting Near a High-Performer Can Make You Better at Your Job
    “Spillover” from certain coworkers can boost our productivity—or jeopardize our employment.
    The spillover effect in offices impacts workers in close physical proximity.
  15. How the Wormhole Decade (2000–2010) Changed the World
    Five implications no one can afford to ignore.
    The rise of the internet resulted in a global culture shift that changed the world.
  16. What’s at Stake in the Debt-Ceiling Standoff?
    Defaulting would be an unmitigated disaster, quickly felt by ordinary Americans.
    two groups of politicians negotiate while dangling upside down from the ceiling of a room
  17. What Happens to Worker Productivity after a Minimum Wage Increase?
    A pay raise boosts productivity for some—but the impact on the bottom line is more complicated.
    employees unload pallets from a truck using hand carts
  18. Immigrants to the U.S. Create More Jobs than They Take
    A new study finds that immigrants are far more likely to found companies—both large and small—than native-born Americans.
    Immigrant CEO welcomes new hires
  19. How Has Marketing Changed over the Past Half-Century?
    Phil Kotler’s groundbreaking textbook came out 55 years ago. Sixteen editions later, he and coauthor Alexander Chernev discuss how big data, social media, and purpose-driven branding are moving the field forward.
    people in 1967 and 2022 react to advertising
  20. 3 Traits of Successful Market-Creating Entrepreneurs
    Creating a market isn’t for the faint of heart. But a dose of humility can go a long way.
    man standing on hilltop overlooking city
More in Marketing