2 Little Known Ways That Retailers Are Making You Fat and Broke

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Every year, consumer spending on unhealthy, fatty processed “food” increases.

It’s not that North Americans are starting to get weaker willed as the years pass – it’s that retail giants collect more and more data each year. They are getting more savvy when it comes to pricing, product placement, and general consumer manipulation.

Human behaviour is heavily influenced by environment. Have you noticed that when you walk into a health food store, you get excited about eating healthy food? You probably walk out of the store with fresh produce, nuts, and organic food.

When you are in a mall, chances are you’ll consume some sort of unhealthy mall food, such as hot dogs, cinnamon buns, or fries, because it’s there.

Our environment influences what we spend money on, what we eat, and even what we think about.

You are far less likely to want potato chips if they aren’t out on the counter. You are also far less likely to want to watch television if your television isn’t positioned in front of your couch.

Knowing that human behaviour is so heavily influenced by environment is how many retailers get us to buy things on impulse.

There are many studies that examine consumer behaviour and movement throughout a store. It has been found that consumers automatically turn right when they walk into a store.

This isn’t something that you think about, but it was observed again and again.

Grocers (or at least the smart ones) take this into account when considering product placement. Consider how most chains place fresh fruit and vegetables to the right of the store, to ensure that is the first thing that consumers see when they walk through the doors. As a result, customers end up getting their produce first, before going down the aisles and perusing other goods.

Studies have shown a huge increase in unhealthy, processed foods purchased if the customer shops for healthy food like produce first. So it makes sense that the grocer would set up their stores this way. More products purchased = more profit.

Thus, if you went through the packaged food aisle first, you would be less likely to cave to impulse purchases of these unhealthy foods.

Consider also that the pharmacy is usually at the back of the store. You have to walk through aisles of junk food before hitting the pharmacy. If you only went to the store and only picked up your prescription, the store wouldn’t benefit from your business as much as if you were to buy something.

Large retailers like Walmart spend a lot of time and money analyzing this type of data. They use it to manipulate what you buy under different conditions.

You Buy Things You Don’t Want Or Need Because They are Relatively Desirable

There have been dozens of studies to analyze consumer behaviours resulting from different pricing schemes.

It has been shown that humans need reference points to make decisions. We need to compare our decisions against something else. If we are given three options – for instance a plain donut, a plain donut with icing, and a chocolate donut – we will almost always choose the option that is slightly better compared to the option like it. So most people will choose the plain donut with icing, even if they really prefer chocolate.

That’s because, relative to the plain donut without icing, the plain one with is better.

Retailers know this about humans, so they will price their goods accordingly.

This is described in great detail in Predictably Irrational, a fabulous book by Dan Ariely. In the book, Ariely describes a pricing observation with a popular newspaper. There were options for only web access (cheapest), only print (more expensive), and both print and web (comparable in pricing to the print only access).

Regardless of whether you only wanted web access to the newspaper when you were looking to sign up, you’re far more likely to pay for the print and web package, because relative to the print only package, it’s a better deal.

Now you know the results of these two studies and can probably think of a dozen times you’ve fallen into these traps. I know I can.

After I read about that study, I was driving to the mall to get some sunglasses. I pulled into the parking lot, and saw a handful of parking spots available. There was one parking spot under a tree, which provided shade on a hot summer day. There were two parking spots, side by side. One was next to a small car, and one next to a large truck.

You can probably guess which parking spot I chose. Instead of the desirable parking spot on its own in the shade, I chose the parking spot next to the small car. Relative to the one next to the huge truck, it was the better spot.

Think about how you’ve previously been sucked into these traps. You’re not immune to them (neither am I!) but recognizing them for what they are and how you’ve been influenced by them in the past can be a powerful behaviour hack.

If you have a hard time controlling impulses when you are at the grocery store or find yourself buying things you don’t need because they are a good deal relative to another package or product, you can use this information to your benefit. Keep these studies in the back of your mind next time you go to buy something or go grocery shopping. Manipulate your environment to ensure success.