Motivation and emotion/Book/2021/Emotional buying

Overview
Emotional buying is when consumers make purchases based on emotional ideas. Emotional buying and impulse buying are similar and are, in most cases, interchangeable. It is common for people to make emotional purchases on cheaper items like sweets, drinks, simple pattern clothing, and cheap discounts. For others, it can expand to more expensive items, which can be a huge financial issue that can last years (Jung, 2017). Around 16% of all purchases made were impulse or emotional purchases (Mohan et al., 2013). To put this into context, Target made $28.3 billion in 2020 (Target, 2021). If we assume 16% of their purchases were emotional, Target would have made $4.53 million because people were illogical. That is a lot of money!

The chapter looks at what causes people to make emotional purchases, what advertisers and brands do to encourage the behaviour, and what you can do to reduce these purchases.

Before continuing, watch this video by The Checkout (Earl & Smith, 2013). It is a great introduction to all the topics being focused on in this chapter.

What Causes Consumers to Make Emotional Purchases


Consumers are assumed to be logical beings according to commerce, but we are not. If you watch the video previously mentioned, you will know that this is the case. However, what makes us act like this? According to a study by Donnelly et al. (2013), it is based on three significant factors: materialism, identity, and mood.

Before looking into the intricacies of emotional buying, it would be advised to read this chapter's discussion about Maslow's hierarchy of needs in context to consumerism. Not only will it give an insight into human needs and wants, but the hierarchy will be referenced throughout this section.

Materialism
Materialism is the desire to possess material assets for personal gain (Górnik-Durose, 2020). Note that the word desire was used and not need. Within Górnik-Durose's article, materialism is considered as a state of "want", which is different from needing something. The idea was found earlier by Saunders et al. (1998) when they looked at materialism and Maslow's needs hierarchy. With this knowledge, materialism is more likely the stepping stone from Love/Belonging and Esteem.

Within the brain, a fight between short-term emotional factors (materialistic mindset) and long-term rational factors (desires of long-term concerns) (Hoch & Loewenstein, 1991). People who compulsive buy more tend to have weaker rational reasoning concerning money. Górnik-Durose (2020) went a step further, looking at how neuroticism and narcissism take part in materialism. People who express grandiose narcissistic traits (described as "Peacocks") display high positive well-being compared to those who express vulnerable narcissism (the "Mice"). Describing it in this way helps understand how each "animal" pursues materialism. Peacocks tend to go out and buy whatever they see fit, while Mice only purchase items that suit them. It does not mean that Mice do not purchase emotionally as often as Peacocks. It is more like they know what they want, but Mice do not consider cost and their happiness longevity when they find something they want.

Similarly, a recent analysis by Sirgy et al. (2021) found that materialism is found in two ways, lack of material goods, and lack of life happiness. The lack of material goods was described before, but the lack of life happiness relates to the next topic, identity.

Identity
The idea of identity relating to emotional purchasing may be different for each person. It could relate to social identity, sexual or gender identity, or experimental identity. Hou and Yang (2021) found in a study with 1183 participants that undergraduate students who lack self-identity tend to purchase more on online shopping websites. Furthermore, a paper by Claes et al. (2016) with 254 Flemish people also connected identity and impulse buying and hoarding.

Unlike materialism, identity (about consumerism) is related to both Love/Belonging and Safety. Although both fit under the same category of identity, the reasons for purchasing items are different. Safety refers to physical and psychological danger. Some people make emotional purchases because they believe their identity is in danger (e.g. sexual, gender, and other personal identities). Love/Belonging relates more to social identity, fitting into social groups like friends, family, and clubs. Understanding the differentiation can better identify how to change your perception of emotional buying.

Parallel to materialism, both categories of people tend to make purchases on similar grounds to gain something (material goods and identity). However, suppose impulse buyers looking for identity face money issues. In that case, they tend to not purchase anything compared to people looking at materialistic values (Hoch & Loewenstein, 1991). Therefore, it is good to know this slight variation of a similar action when identifying why people make impulse purchases.

Mood Improvement
Before continuing, if you remember in the overview, it was mentioned that Emotional buying and impulse buying are similar and are, in most cases, interchangeable. Mood improvement is the topic that separates impulse and emotional purchasing. Although impulse buying is usually based on emotions, it also includes illogical reasoning unaffected by emotions. An example of an impulse purchase without emotional implications is purchasing something you want (a garage door) without considering alternative options or checking other stores. Although it is rare for it to occur, it is still essential to make it explicit.

An older study by Faber and Christenson (1996) found that mood before, during, and after purchasing can encourage impulse buyers in the future. Compared to the control group, Faber and Christenson concluded that impulse buyers expressed stronger emotions prior to going to a mall (see Table 1). When looking at the emotions throughout the purchasing process (entering the store, looking around, and exiting the store after purchasing), they noticed that impulse shoppers are more likely to experience happier emotions after purchasing compared to the control group (see Table 2). When participants were asked if they felt immediate mood changes after they purchase an item. All but one compulsive buyer said yes (95.8%). On the contrary, the control group tend to feel either no change or more negative after purchasing.

Table 1.

Frequency of Experiencing Different Moods Prior to Deciding to Go Shopping

''Note: Impulse buyers are more likely to experience stronger emotions prior to purchasing items. It is the thrill of purchasing items that get them wound up (whether positive or negative)''

Table 2.

Difference in Frequency of Experiencing Moods Prior to Versus During Shopping Note: People who identify as "impulse buyers" experience stronger positive emotions after making a purchase compared to the comparison group.

When comparing the previously mentioned three topics, mood is what makes more people tick when it comes to making emotional purchases. Emotion is a strong driving force which can either help or hinder a person’s decision making abilities. Companies can manipulate customers in order to drive sales and revenue.

Company and Marketing Strategies
As Luke Skywalker once said, this is where the fun begins. Looking into marketing psychology is a great way to understand how people make decision. For a lot of people, it is the look of the stores, the smell, the noise, but most importantly brand and store awareness. How most stores gain customers are advertising (Chang & Chang, 2014), but we’re not here for that, we are here to help identify what grabs the attention of impulse buyers. Where else to start than discounts and deals.

Discounts and Special Offers
There are two areas to look at, displays and the discount itself. Signs and displays with tags are designed to pop out and grab the attention of customers. They invoke emotional arousal are usually directed towards compulsive buyers (Gupta, 2013; O'Guinn & Faber, 1989). Considerations towards the colour, shape, text, font, size, and placement are all significant factors that make a discount tag POP (Norberg et al., 2016). When customers notice a discount sign, they are more likely to walk in, even if they do not want the item on display (Waani & Tumbuan, 2015). This eye-grabbing outcome is what companies want.

Similarly, the discount needs to be good as well. If the discount is not significant enough for the customer, they will move on (Waani & Tumbuan, 2015). There are different expectations for discounts for each store type and brand. This subconscious idea can assist in both discouraging and encouraging particular purchasing decisions of customers (Cachon & Feldman, 2015). "Why would you want to discourage customers from purchasing certain items?" you might be asking yourself. They want you to make purchases that drive more considerable revenue for the company.

Some companies choose to make cheaper items have smaller discounts to make more expensive items have larger discounts. This entices customers to make more significant purchases, even if the cheaper item is what they came to get (Cachon & Feldman, 2015). This marketing strategy is a double-edged sword though, as some customers can be turned away from making any purchase at all.

Employees
Do you ever think to yourself, “the staff here are so friendly and are easy to talk to? They seem to know me well immediately”? Most people do not notice it, which is the point. Employees are another way that companies can influence customers to make emotional purchases. Retail can train their employees to express certain emotions based on what the customer displays. This is what is called emotional labour.

Emotional labour is when workers actively express and suppress emotion within the work environment. Although it is not apparent through the definition, emotional labour is designed to encourage customers to engage with the store, associate the store positively, and encourage larger purchases (Singh, 2017). Emotional labour is described in two ways: surface-level and deep-level emotional acting.

Surface-level emotional labour is used when trying to get customers into stores. Not much effort is put into it, and it is not the best with sales. It is commonly seen by restaurant staff, entryways, and cashiers. Deep-level emotional labour is what drive sales. This is when staff come to you and ask “Can I help you with something?” They are actively engaging with customers to try to help.

Seger-Guttmann and Medler-Liraz (2020) found that deep-level emotional acting helps with more significant purchasing and longer browsing time. However, more help staff does not increase item sales. The interaction with the employee and consumer helps with brand exposure, associating the company with positive emotions. Tyng et al. (2017) ran tests looking at happiness and general long-term memory. Tyng and colleagues discovered that happiness is a solid contributor to logo and visual memory.

Loyalty Programs
Starting as a simple “buy 9, get the 10th free” coffee card, big chains and companies started using loyalty programs to lure customers into strictly shopping at their stores. Programs like Woolworth Rewards, Flybuys, and Velocity loyalty programs exploded during the late 2000s and early 2010s with the promises of “special bargains” and “bigger and better rewards”. These promises help build customer relations and retention rates, bringing bigger businesses for companies (Magatef & Tomalieh, 2015). So how does this relate to you?



Loyalty programs promote customer retention rates. They do this by rewarding customers with bonuses and exclusive offers. An excellent example of this is the classic coffee discount card previously mentioned (see Figure 2 for similar example). Kivetz et al. (2006) found that the closer you are to receiving a reward, the more likely you will shop there to get the reward, in this instance, a free coffee. The idea of a free item gives customers a rush of dopamine as they near closer to a free item.

The type of loyalty program is a tier or status program. These are systems that reward you the more you shop there. For most status programs, there are nearly negligible rewards the higher you go. Henderson et al. (2011) state that consumers seek higher status, even if there are no tangible benefits. The sense of pride that it gives is why consumers go back to the company.

The most recognisable program is a “points” program. These are programs that reward you with points whenever you spend money there. The problem is, these points are not very rewarding. For example, in 2017, one Woolworths Rewards point was worth about half a cent. How do you get points? Well, you earn one point per dollar spent. Wait, I spend one dollar, and I receive half a cent? Very rewarding.

Loyalty programs are not as beneficial as they seem to be. Nunes and Drèze (2006) say that companies make “incentives good enough to change behaviour but not so generous that they erode margins.” The quote sums up all loyalty programs in a neat bow. They do not give out much, but they give out enough so consumers stop looking elsewhere.

There are also other ways that stores can manipulate customers.
 * Other influences
 * Music within a store can influence customers to stay inside for longer (Beverland et al., 2006; Dubé & Morin, 2001).
 * The layout of the store, keeping the more desirable or common items at the back (Ang et al., 1997; Simonson, 1999)
 * Lighting (Summers & Hebert, 2001) and scent (Chebat & Michon, 2003) also alter in-store behaviours.

Although evidence is out there proving these methods work, there is not enough information explaining how they influence customers

Avoiding and Controlling Emotional Buying


Now that we have looked at why people make emotional purchases and what companies do to encourage the behaviour, we can discuss how to reduce emotional purchasing. It is important to mention that if you do have any financial issues or difficult spending habits, please look for financial assistance. A great place to start is the Money Smart website, specifically this two-minute article.

Two question approach
When you are shopping alone and find a shirt or dress that you want, what do you do first? Do you imagine wearing it? How does it feel? How much it costs? For some, all they think about is what it would look like on them. Unfortunately, consumers do not consider financial or longevity when looking at items. This is a big mistake!

Next time you shop, think of these two questions:
 * 1) Do I need this in three months?
 * 2) Will purchasing this cause any financial difficulties within the next two weeks?

Asking these questions will activate the orbitofrontal cortex (see Figure 3) and the anterior cingulate cortex (just behind the orbitofrontal cortex). These areas of the brain help with logical decision-making, which will help break down the emotional connection to the item.

The goal of this strategy is to reduce emotional processing and look at logical processing. This technique is something that I use when shopping for clothing or expensive items. It has helped me breakdown why I need it and if it will break my weekly budget.

Time When You Shop
It is a great idea to plan when, where, and with whom to shop. Considering these factors can help make better financial decisions (Gupta, 2013; Jung, 2017; O'Guinn & Faber, 1989). So let us tackle these factors and how to avoid making emotional purchasing.

When to shop is critical when making purchases. The time of day does not matter; how long you have to shop is what makes consumers buy impulsively (Gupta, 2013). A lack of time to shop makes customers more susceptible to make emotional purchases. Furthermore, if there is a date restraint like a birthday, people are more likely to impulse buy without shopping around. This impulsivity can cause people to make poor financial decisions and can cause hardship down the track. Similarly, where to shop is essential as well. If a store looks packed, people are more likely to make emotional purchases (Gogoi, 2017). Take time to search up when shops are the busiest to avoid being tempted to make impulsive purchases.

Shopping with other's can influence how you perceive shopping. A study by Chebat et al. (2014) concluded that shopping with a friend could either pull you away from making emotional purchases or entice you more into making emotional purchases. Likewise, family members can do the same. However, older figures tend to pull people away from making emotional purchases (Merrilees & Miller, 2019). Shopping by yourself can be helpful, but shopping with others polarises the two outcomes more, with little middle ground for debating whether to purchase. Therefore, it is best to know whom to shop with and how they shop before going out.

{What do people tend not ask themselves when they shop: - I wonder how this looks on me - I wonder how it feels + I wonder if I need this in the future - I wonder how much it costs
 * type=""}

{Your friends can help you when you want to reduce emotional purchases: + True - False
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Conclusion
Emotional purchasing can lead to financial hardship. This is because consumers who make emotional purchases have weaker rational thinking for their future, want to build an identity or feel positive through making irrational purchases. Companies encourage this behaviour to gain profits through emotional labour, special deals/promotions, music, scent, lighting, and store layout to influence customer decision making.

If you make impulsive purchases, the two strategies mentioned can help reduce the urge to make these purchases. However, emotional buying can be difficult to stop. If you are in financial hardship, go to the Money Smart website and ask for more professional help. There are programs to help you financially recover from any difficulties, and some are free. Do not be afraid to look for help.