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Psychology of Buying

On a recent episode of NBC’s “Today” show, Martin Lindstrom showed host Meredith Vieira some of the subtle tricks that retailers use to sell items. What was most interesting was Lindstrom’s credentials – he’s chairman of Buyology Inc., a marketing and neuroscience company, and author of “Buy-ology: Truth and Lies About Why We Buy.”

With the economy in the dumps, Lindstrom said retailers are increasingly using psychological triggers to get people to buy more. While the tone of the segment portrayed retailers negatively, some of the subtle cues could be used to sell more fresh potatoes at retail.

The first thing he mentioned was that size matters. Shoppers purchase 30 percent more when the size of a shopping cart is doubled from the smaller size common in Europe to the larger American standard. Similarly, larger packages also encourage shoppers to consume more – Lindstrom likened that effect to soda manufacturers going to larger bottles in the 1980s, when increased consumption corresponded with the introduction of larger bottles.

Lindstrom also conducted a study on how public perception affects purchases. When shoppers were told to purchase batteries, they usually purchased off-brand unless there were other people around. When other shoppers were present, the consumers in the study almost exclusively purchased the higher-priced name brand batteries.

In the produce department, Lindstrom said the practice of selling two smaller packages for the price of one was effective. Consumers will typically buy the two smaller pack sizes rather than the one larger, even if the cost is higher, because they think they’re getting a better deal. Similarly, when a store adds a limit to purchases – like “limit 3 per customer” – sales increase dramatically, even if the price is unchanged.

Finally, smells are important to shoppers. Adding the smell of freshly cut grass in a home improvement store caused shoppers to report a 49 percent improvement in customer service versus stores without the scent added.
What can the potato industry learn from this? First, 60 percent of purchases are made within four seconds, so connecting with consumers and offering a perceived value is important. Second, Lindstrom said $12 billion was spent on market research in 2007, so there are companies out there that know how to market products to consumers. Using subtle cues to move produce isn’t a dirty trick, but can be an effective way to differentiate potato products among varieties, brands or competing products.

Originally posted Wednesday, Apr. 8, 2009

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