Short Wave - Why Your Brain Loves Sales

Episode Date: December 2, 2024

This Cyber Monday, a meditation on holiday sales. A quick trip to pick up presents can turn into an hours-long shopping spree thanks to all the ways stores use research from fields like consumer neuroscience and neuromarketing to entice you. Retailers create urgency and scarcity to push you to give into the emotional part of your brain, motivated by the release of dopamine. But with the help of NPR business correspondent Alina Selyukh, we get into the psychology of sales and discounts: Why it's SO hard to resist the tricks stores use — and some tips to outsmart them. Read Alina's full story here. Questions about the science driving the world around you? Email us at [e-mail] pcm.adswizz.com for information about our collection and use of personal data for sponsorship and to manage your podcast sponsorship preferences.NPR Privacy Policy

You're listening to Shortwave from NPR. Hi, Gina. Hey, how's it going? This is my daughter, Dory. Do you want to say hi? Hi. Alina, I'm so excited to go shopping with you. It's going to be amazing.

So I guess we should tell people why we're weirdly a recording. Yes. At a mall next to a Christmas tree. We are next to a giant Christmas tree. We're going to look for sales, right? We're going to look for sales and we're going to talk about how sales make us feel. All right, let's do it. Where are we going to go shopping?

Where didn't we go? shopping. Yeah, we walked around a lot. So Alina Selyuk, you're a business correspondent at NPR, and you apparently know a lot about malls. If teenage Alina knew that you can get paid for knowing stuff about the malls, she'd be really impressed. I cover retail, so I have to shop for science. Right, for science. And you are kind enough to talk to us a little bit about the science involved in shopping, right? Specifically the psychology of a sale, which is why we went hunting for sales at Pentagon City Mall just outside Washington. Yes, and this is the peak holiday shopping season.

There is one question that I always get around this time. You can probably guess what it is. I think I can. Are holiday discounts actually a good deal? That's exactly it. Bingo. And that is really subjective. Honestly, sales can be good. They really can.

And it really depends on your budget. It depends on how badly you need whatever this item is. Or do you even need this item, right? And none of this is science, to be clear. But there is a field of study called consumer neuroscience. And it has a slightly more controversial sibling or maybe cousin called neuromarketing. Oh, okay. And they both study what happens in your brain when you're making purchasing decisions or just generally wearing the shoes of a consumer.

Okay, so what makes neuromarketing controversial? It's more commercial. It's the field that advertisers have embraced, so companies use neuromarketing to get people to fall in love with their brand or to buy their stuff. So some researchers have split off into consumer neuroscience presenting it as a less corporate field, if that makes sense. But they're definitely linked. And they confirm this idea that something does happen in your brain when you encounter a discount. It's not really that complicated as far as science goes, but it's all about the sense of urgency. scarcity with a sprinkling of imaginative anticipation and

phomo, really. Today on the show, your brain on discounts. I'm here to tell you about how you process a sale, how stores, push your buttons, and how to outsmart them. I'm Regina Saruk. You're listening to Shortwave from NPR. How do you feel about shopping? I feel pretty overwhelmed.

There are way too many things. I don't know what to choose. It's a lot of pressure. It's a lot of pressure and we haven't even started. Yeah. Yeah. So you don't have a list. Don't have a list.

So you have a budget? I should, but I don't. You don't have a budget. Uh-uh. But I want to save money. Good start. This is a great start. I should have been better prepared.

Yes. Okay. So the mall was huge and it was busy. And standing in that food court, I definitely felt unprepared. I mean, this is kind of the perfect recipe for the stores of that. that mall. You know, they are thrilled when people like us come in without a plan with no list, with no budget. It's kind of ideal for them. Right. Because here's what happens when you shop. In your brain, there's a constant push and pull between what can be described as the emotional

and the rational parts. The human brain has essentially evolved to feel first and think next. That's Carolyn Yun, who's one of the top experts on consumer neuroscience. She's a professor of marketing at the Michigan Ross School of Business. Whenever you see anything, like a sum stimulus, like a chocolate chip cookie that smells really great, that immediately activates your nucleus accumbens, which is a part of this area called the ventral striatum, which is a key part of the reward circuitry. So that's where you get that dopamine hit, right? The neurotransmitter that motivates us and pumps you up to buy some cool new thing, like

when we went to Clares with my daughter Dory, that accessory store that's like a magnet for teens and tweens. All right, are you ready? I'm so ready. Wait, wait, don't look. Don't look. How do you feel right now? I feel okay.

Okay, now look at the sale. Buy three get three free. Clearance for $2. I feel like they have that every day. Everything is so sparkly. Sparkly and shiny. Butterfly. They're jingle bells.

I like how we said, it's the magnet for teens and tweens, but I am the one just losing my mind over the sparkly things. Yeah, we touched everything. We really did. Okay, so back to how sales work in your brain. So anticipation plays a huge role in getting you to buy stuff. When you spot something that you like, for example, you might start to imagine yourself having a great new life in which you have jingle bell. earrings. Even more so if there's a pleasant memory involved, like if you've had jingle bell earrings before and you are already predisposed to liking them. Okay. And your rational part of your brain

is just like chill in while you're having this moment? We are talking milliseconds here. Okay. Our neural processes are super fast. So a lot starts running through your brain kind of at the same time, including the counterbalance to the reward system, which is the cognitive mechanism, like your prudent little accountant. Humans don't go and like buy everything because they realize, you know, that they're thinking about their finances. So the ability to think can override the emotional state. But when people are stressed out or it's the holidays, it requires that much more cognitive resources, which is why I think when people go shopping under stress that can be, you know, quite dangerous. That was definitely me shopping under stress.

We're living on the edge. But so far, process-wise, pretty straightforward, right? We see something we like. We get excited. Then we go, whoa, that's expensive. It's like a mental scale with the dopamine-fueled reward mechanism motivating you on one side and the internal accountant on the other side in your frontal cortex. Now, guess what happens when you add a sale to the mix?

The accountant freaks out. Yes, the sale is like the thumb that tips your mental scale toward buying. Jorge Barraza, who's a consumer psychologist at the University of Southern California, says that just finding a sale, just seeing it, actually registers often as a win already. Of course. It's like delivering its own bolt of joy. Just the fact that they're getting a discount or they're perceiving that they're getting a discount, consumers, is rewarding in and of itself. So not only are we getting the product, but we're also getting that reward that we found something. And we've earned this extra thing.

Talking to Jorge, I immediately was like, it's our lizard brain. Like that ancient part of our brain that just like can't help itself. Yeah. And we were on Zoom and you could just see physically how much he hated that whole line of questioning. We want to simplify what's happening in the brain. And sometimes that simplification can be oversimplified and creates a caricature of something that's not really true. Wow. Okay.

So no lizard brain. Forget it. Our brains are too complex for these basic metaphors. Okay, so let's get back to the sales. We left them as we were weighing down our internal scales with some false sense of reward and freaking out our poor little accountant. Yes. And sales create a sense of urgency and a sense of scarcity. And these are the two building blocks of impulse shopping. Right. Like the sale is happening today while supplies last, you know? Today only. Everyone is here and they're buying that one thing that you want. Stores also use all kinds of tricks to sway your internal accountant toward buying. For example, there's decoy pricing.

Like, picture a store shelf where you have two bags of, let's say, candy. One is smaller and one's larger. How do you get people to buy the bigger bag of the two? You add a decoy third option, and that's a medium bag that's much smaller than the largest bag, but only slightly cheaper. Oh, this is like the whole thing they used to do with like supersizing and stuff. And popcorn and movie theaters. Yeah. It makes so much sense.

Okay. So it makes the big bag look like the best deal. Exactly. Even though it's getting people to buy, the most expensive option there is on the shelf. Well, I've been that sucker. Everyone has. I've fallen for it. Another classic trick is the suggested price.

And that's like when I went shopping recently for a coat and its price was like $80. But the tag on it said the suggestive. or original price was $150. I have no idea if the coat really ever was $150, but I felt like, what a nice coat for such a steel. So like this rewards mechanism has outweighed your cognitive concerns about your budget, your excitement to find this coat, to find it at a discount, like, makes you happen. Yes. And Jorge Barazza says that we put a lot of meaning into that original higher price that we might see on a tag. We actually not only perceive expensive of things as higher quality.

He says we actually experience them as higher quality. Implicitly, like deep down, it has a strong effect. So that whole element around suggested retail price can really pack a wallet. We can do two things there. We can communicate quality to a consumer, but then we can discount it and then have consumers think, well, not only am I getting quality product, but I'm getting that for a much cheaper price. Right. So the human being really has to work to, like, resist a sale. And I kept asking the experts, like what their trick was to approach discounts rationally. Okay. And they were like,

who says we do that? We all fall for sales just the same. Oh my gosh, no. So they didn't offer, like, any tips. I didn't say that. They did have to, they did have tips. They just said that no one is capable of completely rationally approaching it. But so, okay, one strategy they offered is maybe obvious, hard to do. But it's to make a shopping list in advance and then stick to it. Just don't get distracted by the sales. Okay, the thing that I didn't do at all. Uh-huh.

That's the first one. So then another one is to research stuff so you know if the sale really is a good price. You can do it in advance or you can do it on the spot from your phone. But the main piece of advice is also the hardest one to do, I feel like, which is give yourself time to cool off from that instant reaction to a sale. So like give your internal accountant like a moment to process. Because remember, we feel first and think later. It happens fast. Nonetheless, if you can avoid the rush, do it.

Okay. So we didn't follow any of this advice on our trip to the mall. Granted, we didn't know. But it turns out like Dori and I have pretty strong rational brains. Like, we don't love shopping and we didn't really want to buy that many things, but we couldn't really resist a visit to Claire's. And you could kind of tell it was a lot in the moment. Yeah, we didn't do this third tip. Actually, we didn't do any of these tips.

Yeah. But slowing down was really hard to do because there was just so much stuff there. This is a lot for my brain right now. That's kind of the idea. Yeah. Too many choices. And you have to make them now because it's buy three get three free or other. Otherwise, you're only going to get the three original ones.

Yeah. So true. We got the deal. Thank you. So you got a headband and two clips for free, but you spent $40. Yeah. I feel kind of... I don't know.

Was that worth it? No. Do you feel happy about it anyway? I mean... You didn't even get the dopamine. No. No, we didn't. You just lost some money.

What a trip to the mall. Okay. I mean, I do have to say, like, I do get happy when I find discounts, right? Like, since the three of us went to the mall, I have bought things online for Christmas, and I know now why that, like, I get this dopamine hit. But now you know the deal with deals. Thank you so much, Alina, for bringing us the story and for taking me shopping. You're welcome.

This episode was produced by Rachel Carlson, edited by a showrunner Rebecca Ramirez, and Alina Check the Facts. Maggie Luthor was our audio engineer. Special thanks to John Hamilton and Emily Kopp. I'm Regina Barber. Thanks for listening to Shorewave from NPR. Do you feel 15 again meeting up at a mall on a Friday night? Malls are way nicer than they used to be.

Even the one I used to work at is way nicer than it was when I worked there. Like the floors are clean, you know?