Why Your Brain Loves Sales

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 https://www.npr.org/people/447244385/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 https://www.npr.org/2023/11/24/1214522140/black-friday-sales-deals-smart-shopping-tips. Questions about the science driving the world around you? Email us at [email protected] mailto:[email protected]. See pcm.adswizz.com https://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 https://www.npr.org/about-npr/179878450/privacy-policy

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• 0:00Speaker 00

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• 0:29Regina Barber?

  Hi, Gina.

• 0:30Speaker 00

  Hey, how's it going?

• 0:32Regina Barber?

  This is my daughter, Dory. You want to say hi?

• 0:34Speaker 02

  Hi.

• 0:35Regina Barber?

  Alina. I'm so excited to go shopping with you. It's going to be amazing.

• 0:38Speaker 02

  So I guess we should tell people why we're weirdly recording.

• 0:41Regina Barber?

  Yes.

• 0:42Speaker 02

  At a mall next to a Christmas tree.

• 0:43Regina Barber?

  We are next to a giant Christmas tree. We're going to look for sales, right?

• 0:47Speaker 02

  We're going to look for sales and we're going to talk about how sales make us feel.

• 0:51Regina Barber?

  All right, let's do it. Where are we going to go shopping?

• 0:54Speaker 02

  Where didn't we go shopping?

• 0:55Regina Barber?

  Yeah, we walked around a lot. So, Alina Seluk, you're a business correspondent at NPR and you apparently know a lot about malls.

• 1:04Speaker 02

  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.

• 1:13Regina Barber?

  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.

• 1:25Speaker 02

  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.

• 1:34Regina Barber?

  I think I can. Are holiday discounts actually a good deal?

• 1:38Speaker 02

  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.

• 1:52Regina Barber?

  Or do you even need this item, right?

• 1:54Speaker 02

  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.

• 2:08Regina Barber?

  Oh, OK.

• 2:09Speaker 02

  And they both study what happens in your brain when you're making purchasing decisions, or just generally wearing the shoes of a consumer.

• 2:17Regina Barber?

  OK, so what makes neuromarketing controversial?

• 2:21Speaker 02

  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.

• 2:41Regina Barber?

  And they confirm this idea that something does happen in your brain when you encounter a discount.

• 2:47Speaker 02

  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 FOMO, really.

• 3:02Regina Barber?

  Today on the show, your brain on discounts.

• 3:05Speaker 02

  I'm here to tell you about how you process a sale, how stores push your buttons, and how to outsmart them.

• 3:12Regina Barber?

  I'm Regina Barber.

• 3:13Speaker 02

  I'm Alina Silukh.

• 3:13Regina Barber?

  You're listening to Short Wave from NPR.

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• 4:49Speaker 02

  How do you feel about shopping?

• 4:55Regina Barber?

  I feel pretty overwhelmed. There are like way too many things. I don't know what to choose. It's a lot of pressure.

• 5:03Speaker 02

  It's a lot of pressure and we haven't even started.

• 5:05Regina Barber?

  Yeah.

• 5:06Speaker 02

  So you don't have a list?

• 5:07Regina Barber?

  Don't have a list.

• 5:08Speaker 02

  Do you have a budget?

• 5:10Regina Barber?

  I should, but I don't.

• 5:12Speaker 02

  You don't have a budget?

• 5:13Regina Barber?

  Uh-uh. But I want to save money.

• 5:15Speaker 02

  Good start. This is a great start.

• 5:18Regina Barber?

  Yeah. 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.

• 5:28Speaker 02

  I mean, this is kind of the perfect recipe for the stores of 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.

• 5:40Regina Barber?

  Right.

• 5:41Speaker 02

  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.

• 5:50Speaker 04

  The human brain has essentially evolved to feel first and think next.

• 5:56Speaker 02

  That's Carolyn Yoon, who is one of the top experts on consumer neuroscience. She's a professor of marketing at the Michigan Ross School of Business.

• 6:03Speaker 04

  Whenever you see anything like a some 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.

• 6:22Regina Barber?

  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 Claire's with my daughter Dory, that accessory store that's like a magnet for teens and tweens.

• 6:37Speaker 02

  All right. Are you ready?

• 6:39Regina Barber?

  Ready.

• 6:39Speaker 02

  Wait, wait, don't look, don't look. How do you feel right now?

• 6:43Regina Barber?

  I feel okay.

• 6:44Speaker 02

  Okay, now look at the sale.

• 6:45Regina Barber?

  Buy three, get three free.

• 6:48Speaker 02

  Clearance for $2.

• 6:50Regina Barber?

  I feel like they have that every day.

• 6:54Regina Barber?

  Everything is so sparkly.

• 6:56Speaker 02

  Sparkly and shiny. Butterfly.

• 7:02Speaker 02

  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.

• 7:11Regina Barber?

  Yeah, we touched everything.

• 7:13Speaker 02

  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.

• 7:39Regina Barber?

  Okay, and your rational part of your brain is just like chilling while you're having this moment?

• 7:44Speaker 02

  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.

• 7:59Speaker 04

  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.

• 8:26Regina Barber?

  That was definitely me shopping under stress.

• 8:28Speaker 02

  Living on the edge.

• 8:29Regina Barber?

  Yep.

• 8:30Speaker 02

  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?

• 8:51Regina Barber?

  The accountant freaks out.

• 8:52Speaker 02

  Yes, a sale is like the thumb that tips your mental scale toward buying. Jorge Barazza, 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.

• 9:09Regina Barber?

  Of course.

• 9:10Speaker 02

  It's like delivering its own bolt of joy.

• 9:12Speaker 05

  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 we found something, we've earned this extra thing.

• 9:28Speaker 02

  Talking to Jorge, I immediately was like, it's our lizard brain.

• 9:33Regina Barber?

  Like that ancient part of our brain that just like can't help itself.

• 9:36Speaker 02

  Yeah, and we were on Zoom and you could just see physically how much he hated that whole line of questioning.

• 9:44Speaker 05

  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.

• 9:54Regina Barber?

  Wow, okay, so no lizard brain.

• 9:56Speaker 02

  Forget it. Our brains are too complex for these basic metaphors.

• 10:00Regina Barber?

  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.

• 10:09Speaker 02

  Yes, and sales create a sense of urgency and a sense of scarcity. And these are the two building blocks of impulse shopping.

• 10:18Regina Barber?

  Right, like the sale is happening today while supplies last, you know?

• 10:21Speaker 02

  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.

• 10:56Regina Barber?

  Oh, this is like the whole thing they used to do with like supersizing and stuff.

• 10:59Speaker 02

  And popcorn and movie theaters.

• 11:00Regina Barber?

  Yeah, it makes so much sense. Okay, so it makes the big bag look like the best deal.

• 11:05Speaker 02

  Exactly. Even though it's getting people to buy the most expensive option there is on the shelf.

• 11:11Regina Barber?

  Well, I've been that sucker. Everyone has.

• 11:13Speaker 02

  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 suggested 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 steal.

• 11:36Regina Barber?

  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 happy.

• 11:45Speaker 02

  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 things as higher quality. He says we actually experience them as higher quality.

• 12:01Speaker 05

  Implicitly, like deep down, it has a strong effect. So that whole element around suggested retail price can really pack a wallop. We can do two things there. We can communicate quality to a consumer, but then we can discount it and then have consumers think, oh, not only am I getting quality product, but I'm getting that for a much cheaper price.

• 12:23Regina Barber?

  Right. So the human brain really has to work to like resist a sale.

• 12:28Speaker 02

  And I kept asking the experts, like what their trick was to approach discounts rationally. And they were like, who says we do that? We all fall for sales just the same.

• 12:42Regina Barber?

  Oh, my gosh, no. So they didn't offer like any tips?

• 12:45Speaker 02

  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.

• 13:03Regina Barber?

  Okay, the thing that I didn't do at all.

• 13:05Speaker 02

  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.

• 13:27Regina Barber?

  So like, give your internal accountant like, a moment to process.

• 13:31Speaker 02

  Because remember, we feel first and think later. Happens fast. Nonetheless, if you can avoid the rush, do it.

• 13:38Regina Barber?

  Okay, cool. 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, Dory 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.

• 13:58Speaker 02

  Yeah. We didn't do this third tip. Actually, we didn't do any of these tips.

• 14:02Regina Barber?

  Yeah.

• 14:03Speaker 02

  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, absolutely. Too many choices. And you have to make them now because it's buy three, get three free, or otherwise you're only going to get the three original ones.

• 14:19Regina Barber?

  Yeah.

• 14:19Speaker 02

  So true.

• 14:22Regina Barber?

  We got the deal.

• 14:24Speaker 02

  Thank you. So you got a headband and two clips for free, but you spent $40.

• 14:30Regina Barber?

  Yeah. I feel kind of...

• 14:32Speaker 02

  I don't know. Was that worth it? No. Do you feel happy about it, anyway?

• 14:38Regina Barber?

  I mean...

• 14:41Speaker 02

  You didn't even get the dopamine. No. No, we didn't. We just lost some money.

• 14:46Regina Barber?

  What a, what a trip to the mall. 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.

• 15:01Speaker 02

  But now you know the, the deal with deals.

• 15:04Regina Barber?

  Thank you so much, Alina, for bringing us the story and for taking me shopping.

• 15:08Speaker 02

  You're welcome.

• 15:12Regina Barber?

  This episode was produced by Rachel Carlson, edited by showrunner Rebecca Ramirez, and Alina checked the facts. Maggie Luthar was our audio engineer. Special thanks to John Hamilton and Emily Kopp. I'm Regina Barber. Thanks for listening to Short Wave from NPR.

• 15:39Speaker 02

  Do you feel 15 again? Meeting up at a mall on a Friday night?

• 15:44Regina Barber?

  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?

• 15:56Speaker 03

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