SEATTLE — Melina Palmer is a Behavioral Economist and Host of The Brainy Business Podcast. These are some of Melina's tips to use when online shopping:
Have a plan:
- The pandemic has made all of our brains overwhelmed, which means your subconscious (which is driven by instant rewards and the thrill of buying) is doing even more. When you don't have a plan, you are likely to be swayed by shiny objects and may overspend.
- Feeling the loss over traditions you may not be able to keep up this year, you may be more susceptible to sales and feeling like you need to overcompensate. While it is fine to buy a few more things if you budget for them, resist the urge to go into your shopping without a plan.
- Using a credit card (as we do online) separates the pain of the payment from the joy of the purchase--it allows you to go through the whole season overspending and not realizing it, setting yourself up for a difficult January if you aren't careful.
- to know the person you are shopping for and have an idea in advance. If you don't have a plan, your brain is even more likely to want to overspend this year than others.
Learn to Recognize These Concepts Your Subconscious Loves:
- Scarcity -- limited quantities make us want to take action and believe there is increased value. Less available doesn't necessarily mean it is the right fit for you or the person you are buying for.
- Loss Aversion -- FOMO is real! We don't want to miss out on a deal, so when something is framed as a "last chance" or other sale language, we may feel inclined to buy so we don't miss out.
- Social Proof -- testimonials, reviews and "most popular" messaging helps us to feel comfortable with a decision to buy. Ask, "Do I have anything in common with the people who left these reviews?" to help to determine if it is a fit for you.
- Anchoring -- when things are listed as 10 for $10 you spend more than $1 each. Limited quantities also make it feel like you have to buy more (scarcity and social proof are tied in with this). Think about when the sales of meat had a limit of 3 during the early days of the pandemic. You maybe weren't planning to buy meat that week...or maybe you only needed 1 pack...but did you decide to buy 3 "just in case"? So did everyone else. Would meat have actually sold out if there hadn't been limits placed on how many you could buy? We won't know for sure, but it would have been less prominent.
- For each of these concepts, the lesson is to know the person you are shopping for and have an idea in advance. If you don't have a plan, your brain is even more likely to want to overspend this year than others
Melina has a book coming out in 2021! You can preorder Unlocked: Getting Inside the Consumer's Head with Behavioral Economics today!
Segment Producer Derek Haas. Watch New Day Northwest 11 AM weekdays on KING 5 and streaming live on KING5.com. Contact New Day.