Take 5: Holiday Shopping
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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.”

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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.

4. Don’t Let Jeal­ousy Affect Your Choices

About to pur­chase a sequined ball gown to wear to the annu­al hol­i­day par­ty when a black blaz­er is your stan­dard fare? Maybe you are feel­ing jealous.

Jeal­ousy can actu­al­ly moti­vate peo­ple to seek atten­tion from the gen­er­al pub­lic, and in order to achieve that moti­va­tion, they pur­chase prod­ucts that are atten­tion-grab­bing,” explains assis­tant pro­fes­sor of mar­ket­ing Ping Dong.

In one exper­i­ment, some par­tic­i­pants were asked to recall a time when they felt jeal­ous, while oth­ers recalled a more neu­tral expe­ri­ence. Then par­tic­i­pants chose between clothes and acces­sories with either a small or large brand logo. Par­tic­i­pants who had dwelled on their own jeal­ousy were more like­ly to choose the items with large logos.

In a sep­a­rate exper­i­ment, Dong found that peo­ple prompt­ed to feel jeal­ous favored a sil­ly look­ing pair of asym­met­ri­cal plas­tic sun­glass­es (not unlike what you might see at a New Year’s Eve par­ty) over a more sedate pair — even at a for­mal work par­ty, where such an acces­so­ry would be inappropriate.

So, if you find your­self sud­den­ly attract­ed to flashy garb, step back and reflect on your emo­tions. Did you just view an ad try­ing to feed off of your inse­cu­ri­ties? Or per­haps you are irked that your cousin got way more atten­tion than you at the fam­i­ly gift exchange.

5. Smile. Or Don’t.

There you are at the gift exchange, per­fect gift in tow. But if you just aren’t feel­ing the hol­i­day spir­it, are you pre­pared to con­jure up some man­u­fac­tured cheer? 

A study by Kel­logg mar­ket­ing pro­fes­sors Aparna Labroo and Ping Dong sug­gests mixed ben­e­fits to those fake smiles.

If I sig­nal that I’m hav­ing fun, I might attract oth­er peo­ple and we might all bond bet­ter. No one wants to be with some­one who’s look­ing mis­er­able,” says Aparna Labroo, a pro­fes­sor of mar­ket­ing. But there’s val­ue in being authen­tic too. For some peo­ple, we’ve found that if you try too hard to enjoy some­thing, it reminds you that you’re not enjoy­ing the situation.”

The idea, Labroo explains, is that sim­i­lar actions are like­ly to be inter­pret­ed by our brain dif­fer­ent­ly depend­ing on the beliefs and men­tal asso­ci­a­tions that we have about those actions. If we believe that peo­ple smile when they are hap­py, then smil­ing can make us hap­pi­er. But if we believe the oppo­site — that peo­ple in essence fake it until they make it” — then smil­ing can actu­al­ly make us feel worse.

It becomes prob­lem­at­ic when you try too hard, when look­ing hap­py becomes a very con­scious and uncom­fort­able thing,” says Labroo. If you’re try­ing to fake it, at some point you know.”

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