Retail psychology – how to shop smarter

We’ve all popped into a shop to buy bread and milk, and found ourselves at the till with a basketful of groceries.

While we may blame ourselves for shopping impulsively, we are often the target of tried-and-tested psychological techniques that encourage shoppers to spend.

“Retailers spend millions of rands every year to understand how customers make decisions,” says Sarah Nicholson, customer experience manager at JustMoney.

“Every shopping detail, from store layout to music, lighting, and promotions, is designed to increase the likelihood of you making a purchase. ‘Christmas in July’, back-to-school promotions, and winter sales are current examples.

“Once you recognise these marketing techniques, you can make informed buying decisions and have more control over your budget.”

Common retail tactics

1. Pleasant scents. Many retailers diffuse fragrances of fresh bread, coffee, vanilla, or citrus. Pleasant scents trigger positive emotions and create a sense of comfort, making the shopping environment more appealing.
2. Carefully selected music. Relaxing music encourages customers to browse leisurely, while upbeat music increases energy and impulse buying.
3. Fresh flowers and produce at the entrance. Supermarkets frequently greet shoppers with colourful fruit, vegetables, and flowers. The display creates an impression of freshness and quality.
4. Essential items at the back. Milk, bread, eggs, and other staples are often located deep inside the store, forcing shoppers to walk past many other items to reach them.
5. Interspersed high-demand products. Popular products are separated rather than grouped, encouraging shoppers to cover more ground and encounter more things to buy.
6. Eye-level shelf placement. Products at eye level generally get the most attention. Manufacturers pay retailers premium fees for these prime positions.
7. Children’s eye-level displays. Cereals, sweets, toys, and snacks are often positioned where young children can easily see and reach them.
8. Impulse buy displays at the checkout. Chocolates, magazines, batteries, chewing gum, and small accessories are placed at queue points.
9. Large shopping trolleys. Bigger trolleys make purchases appear smaller, subtly encouraging shoppers to continue filling the available space.
10. Wide aisles leading to promotional displays. Spacious walkways guide customers towards promotional islands featuring  big-profit or seasonal merchandise.
11. End-of-aisle displays. Products at the ends of aisles get more attention than those located midway along shelves, even if they are not the cheapest.
12. “Limited time” promotions. Signs such as “Today only” and “Weekend special” create urgency, encouraging shoppers to buy at once.
13. Multi-buy offers. Promotions such as “Buy two, get one free” or “Three for R100” encourage customers to purchase larger quantities than they need.
14. Percentage discounts. A large “50% off” sign attracts attention even if the product’s original price was inflated.
15. Anchoring with premium products. Expensive products are displayed alongside mid-priced alternatives, making the latter seem like better value.
16. Strategic lighting. Bright lighting highlights fresh food, jewellery, cosmetics, and premium products, making them appear desirable.
17. Attractive packaging. Colour, texture, finishes, and premium packaging create the perception of higher quality, regardless of the product inside.
18. Free samples. Offering customers a taste or demonstration creates goodwill and increases the likelihood of a purchase.
19. Seasonal displays. Eye-catching Christmas, Eid, Valentine’s Day, and Mother’s Day displays encourage shoppers to buy gifts and seasonal items.
20. Lifestyle merchandising. Scenes of coordinated homeware, clothing, and accessories encourage shoppers to buy more items from a collection.
21. Store layouts without shortcuts. Some retailers create winding routes or one-way systems that expose customers to as much merchandise as possible.
22. Bright promotional signage. Large red, yellow, or brightly coloured sale signs attract attention, even when the discount is modest.
23. Digital price tags. Electronic shelf labels allow retailers to update prices and promotions quickly based on customer uptake.
24. Loyalty programmes. Reward points and cashback systems encourage customers to return to the same retailer, spending more to qualify for rewards.
25. Free Wi-Fi and comfortable seating. The longer customers remain in-store, the greater the chance of browsing and impulse purchases.
26. Product demonstrations. Cooking or appliance demonstrations and beauty makeovers encourage customers to imagine themselves using a product.
27. Cross-merchandising. Complementary products are placed together – chips next to soft drinks, pasta near pasta sauce – to encourage more purchases.

Tips to avoid overspending

“These techniques are simply smart marketing,” says Nicholson. “Problems arise when customers spend more than they intended to or buy items they neither need nor can comfortably afford. The worst-case scenario is when impulse buys lead to debt.”

Nicholson offers the following tips to avoid temptation and manage your money:

1. Compare prices across different retailers before you leave home.
2. Shop with a list and set a spending limit.
3. Never shop when hungry, tired, or stressed.
4. Compare the unit price, not just the promotional price.
5. Pause before making an impulse purchase. Ask yourself whether a special offer really saves money if you weren’t planning to buy the item.
6. Use a basket instead of a trolley when buying only a few items.
7. Avoid wandering through every aisle if you only need specific items.
8. Be cautious of multi-buy promotions on products that expire.
9. Shop alone where possible as children are likely to ask for additional treats.
10. Shop online.

“Retailers will continue finding innovative ways to attract customers and increase sales,” says Nicholson. “Understanding the psychology behind their techniques will help you enjoy shopping while remaining in control.

“Keep your long-term financial goals in mind. Every unplanned purchase is money that you could have saved, used to pay off debt, or invested to build wealth for yourself and your family.”

JustMoney is a South African financial services company providing a range of solutions, from loans to insurance, underpinned by the data and coaching individuals need to make good money choices.

JustMoney believes that money is personal, so its support is too. Customers are more than just a number; they are individuals with unique goals and dreams. From securing a loan or protecting what matters, to finally getting a handle on debt, JustMoney provides a personalised experience powered by insights that fit customers’ lives.