Some people go shopping with a get-in-and-get-out mentality: they know exactly what they want to buy, stick to their original purchase plan and leave the store quickly. But most consumers head to a store with only a general idea of what to buy and a vague sense of how much they wish to spend. This uncertainty makes them susceptible to external factors, such as marketing promotions, that can influence their purchases, shows new research from Professor Leonard Lee.
Lee and coresearcher Dan Ariely of the Massachusetts Institute of Technology examined how consumers’ goals become increasingly concrete throughout the shopping process and identified two shopping stages. During stage 1, shoppers are uncertain of their goals and think of the products they intend to purchase in general terms; as shopping progresses and consumers reach stage 2, they are exposed to more products and have considered them in relation to their own needs and preferences, so they are more certain of what they want to buy and how much to spend.
A psychological aversion to uncertainty is what motivates consumers to move from “I’m looking for a snack and a drink” to “I’m buying Lays potato chips and a Coke.” “Consumers have a strong desire to decide what they want to buy and how much they want to spend; the evolution from less-concrete to more-concrete shopping goals is pretty natural,” Lee says.
Not surprisingly, when shoppers are at the snack-and-a-drink stage they are most likely to be influenced by marketing promotions. At this point, consumers are building their shopping preferences based on internal likes and dislikes as well as on available environmental cues. Lee found that goal-evoking marketing efforts, such as conditional coupons (spend $10 and get $1 off, for instance), could act as a motivational tool to spur these purchase decisions because the minimum dollar requirement suggests a concrete spending target. “People use coupons not just to save money but also to help them decide what to buy or how much to spend,” he notes.
To test the relationship between goal concreteness and promotional marketing susceptibility, Lee and Ariely conducted a series of field experiments at a convenience store. The researchers handed conditional coupons to shoppers just outside the store entrance — when customers would be in the first, undecided shopping stage — or along the store’s back aisles, when the shoppers had reached the second shopping stage, characterized by concrete goals. The reserachers also manipulated the coupons’ spending requirements (either a minimum amount of $6 or $2 to receive a $1-discount) to be either above or below consumers’ typical spending at the convenience store so they could be certain shoppers were using the coupons to help construct concrete shopping goals and not just to save money.
As expected, the coupons had different effects on consumers depending on the concreteness of their shopping goals. Shoppers who received the coupons inside the store (those who had goals that were more concrete) responded in similar ways to the two minimum spending levels, while those who received the coupons outside the store (those with goals that were less concrete) differed in their average spending.
Compared to the shoppers in the later stage, the undecided shoppers shifted their spending in step with the minimum spending conditions on their coupons. When the required level was higher than what shoppers typically spent, they spent more; when the required level was lower, they spent less. “The earlier you expose consumers to these promotions, the more effective the promotions are. Once consumers have decided what they want to buy it is more difficult to get them to change their minds and their spending amounts,” Lee explains.
Because of the goal-driven nature of consumers’ responses to promotions, marketers must be careful when setting spending requirements for these types of coupons, Lee cautions. Though companies can clearly influence undecided shoppers by offering conditional coupons, setting the requirements too low can backfire and result in lower overall spending.
“Common sense says that consumers who receive a conditional coupon will always be more willing to spend money,” Lee says. “But because they are using these conditions to set goals, if the minimum spending requirement is low, they will likely spend less money.”
Leonard Lee is assistant professor of marketing at Columbia Business School. This paper won the Journal of Consumer Research’s 2007 Robert Ferber Award (honorable mention).