Chris has worked in a business leadership role for the past 15+ years. He likes to share his experiences with others to help them learn.
Retail Warfare: Cutthroat Tactics and Gimmicks
Retailers do everything they can to increase their profit margins. However, stiff competition in the marketplace has resulted in the use of cutthroat tactics and advertising gimmicks on the retail battlefield. Retailers will stop at nothing to get you to spend more money. Some companies have even been known to consult with psychologists to advise them on how to get into our heads.
For the uninformed shopper, this could mean disaster. We've all seen casualties in this battle for your dollar. Don't let yourself become another victim.
6 Common Marketing Ploys Retailers Use to Make You Spend More Money
- The Aisle of Temptation
- Constantly Rearranging Merchandise
- Product Placement
- Long Checkout Lines
- Loss-Leader Items
- Selling Out of Your First Choice
Let's discuss these ploys in detail. Go ahead, arm yourself with some knowledge. You won't regret it.
1. The Aisle of Temptation
The aisle of temptation is a rather new strategy that many big box stores are starting to use. If you haven't seen or experienced this tactic, then let me explain. The aisle of temptation is a long and winding aisle or system of aisles used to funnel shoppers through the front of the store towards the checkout registers. Before you can spend your hard-earned cash on what you originally entered the store for, you have to walk through (and wait in) this aisle. The shelves are stocked with cheap novelty items meant to invoke an impulse purchase from the people waiting in line.
It's been said that the average American will spend up to $200 a month on impulse purchases. That is to say, $200 per month goes to purchase things that the average person had no intention of buying when they entered the store. That's a significant amount of money! Retailers know that we love a good impulse purchase, so they invented the aisle of temptation to cash in. What's interesting to note is that 71% of consumers who were polled regarding impulse purchases stated that they often regret it.
2. Constantly Rearranging Merchandise
One of the most frustrating things you can experience is going to your favorite store and finding that the employees have moved all of the stuff you like. This is when a 10-minute trip to the grocery store can easily become a 20-minute one. This is precisely what the retailer wants. They know that the more time you spend in a store, the more money that you will likely spend.
By constantly rearranging merchandise, it forces the customer to either spend more time searching for what they want (thus being exposed to more advertising and more products) or to ask a sales associate for help. Whenever a customer asks for help, the retailer has an opportunity to sell more things to them. This could include the worker attempting to up-sell you (i.e., "this more expensive brand is better than that one") or recommend items that pair well with your intended purchase (i.e., "this dip would go great with those chips").
3. Product Placement
I could write a whole series of articles on the subject of product placement in a retail setting. There is so much science that goes into how a store is arranged that it would probably literally blow your mind. In any case, I'd just like to touch on a few things in this article.
First, most stores keep their essential items like milk and eggs in the back of the building so that you have to walk past everything else before you reach what you actually need. Retailers also use the arrangement of products on the shelves to their advantage as well. More often than not, the most expensive items are placed on the shelves right at eye level (they might have some catchy advertisements there as well). The cheapest products are often placed on the bottom shelves. This means you have to bend over to get them unless you miss them completely. It sounds so silly, but it's surprising how much this tactic actually works. It's especially effective.
4. Long Checkout Lines
Ever wonder why your favorite big box retailer has up to 30 check-out registers but never uses them all? There are really only two reasons why retailers under-utilize the availability of registers, and it has a direct impact on their bottom line. The first and most obvious reason is that the retailer is attempting to spend less on payroll and employee benefits.
The second reason is to force you to spend more time in the store. As discussed earlier, the more time that you spend in a store, the more money you will end up spending. If a retailer can keep you standing in a line longer (especially in an aisle of temptation), they can almost guarantee that spending will increase. But this only works up to a certain point. If the lines are too long, customers may get frustrated and leave the store. A good store manager will recognize the balancing point between the number of customers and available cashiers. They know how to staff appropriately to maximize profits.
Read More From Toughnickel
5. Loss-Leader Items
Many retailers today still use the old "loss leader" tactic for increasing sales. This tactic can actually be pretty good for the customer, as long as they are aware of what's actually going on.
This is how the ploy works: The retailer typically picks one or two items to be their loss leaders. Those items get marked down to an unusually low price that no other retailer can match. This may result in the store actually losing money on those particular items (hence the name "loss leader").
The idea is to attract customers to the store with the low prices of the loss leader items in an effort to get people to purchase other things as well. It sounds risky, but the tactic does work well for many businesses. This is how most convenience stores (which have to compete with grocery stores) make a profit in today's marketplace.
6. Selling Out of Your First Choice
This ploy is another frustrating one for me. It's frustrating when you arrive at the store only to find that they are completely sold out of your favorite item. You might chalk it up to simple economics (increased demand) or even a lazy staff member who forgot to stock or order more. In some cases, you may be correct; however, this could also be another marketing ploy.
Retailers know that people tend to favor less expensive brands over more expensive ones, given the same characteristics of a product. This is especially true when product branding is not a significant factor. So in an effort to get you to purchase the more expensive items, a retailer may deliberately let the stock of cheaper items run dry. When faced with fewer choices, the customer can either spend more money for the same thing or not buy anything at all. Again, as with the long lines tactic, retailers have to be careful how about how often they let products run out.
This content is accurate and true to the best of the author’s knowledge and is not meant to substitute for formal and individualized advice from a qualified professional.
Christopher Wanamaker (author) from Arizona on September 17, 2014:
Huntgoddess - The "cash back" scam works like this:
1) The cashier scans your groceries and then waits for you to run your debit card.
2) The cashier selects to receive cash back from your debit card without asking you or telling you
3) You don't realize that the cashier chose to receive cash back and complete the transaction without looking at the total or at your receipt.
4) The cashier takes the "cash back" and puts it in his or her pocket.
5) You were unknowingly cheated out of some money and the cashier (or store) has basically stolen from you.
6) You realize that money was taken from you right under your nose when you attempt to balance your budget and the transactions don't match or when you finally do look at the receipt.
Unfortunately many people are careless, don't keep good financial records, and don't look at their receipts. So for these people, they may never even know that money was stolen from them.
This scam is common in both big box stores and mom and pop outfits. However, the difference is that in the big box stores it's usually the cashier's stealing for personal gain and not to support the profit margins of the company.
Huntgoddess from Midwest U.S.A. on September 17, 2014:
I'm not quite understanding some of these things? (Yes, I'm slow.)
How does putting "cash back" on the receipt make it a scam? I've never heard of this, and I don't see the scam.
I also do not understand the scam that tashaonthetown comments on. I'm interested, though. Just slow -- as I say LOL :-)
Eleanore Ferranti Whitaker from Old Bridge, New Jersey on September 17, 2014:
One word of caution about the new "tactic" of some retailers. Watch your cash register receipts. Several retailers in the US have rigged the computers for those cash registers. Here's what happens:
You pay with cold, hard cash. You check your register receipt and find it has a "cash back" amount of $20 or more. See the scam there?
Then, you question the "cash back" and are told "it can't be changed." Yes. It can. It means rescanning the items purchased and making sure the cash register computer doesn't add "cash back" to your receipt.
If this happens, demand to speak to a store manager. This is an outrageous way of handing retailers more profit.
Natasha Pelati from South Africa on September 16, 2014:
Great info and yes, yes! so true. My favourite products are always sold out before the specials have been printed in the paper. I am forced to buy the alternative which always ends up more than the special. Most of the time I find that the pricing is wrong and the product on the shelf is under a price that is for the smaller item, without thinking I take it to the till only to find after I have paid and stood in a que for ages, that I got the wrong one. Most of the time we do not go back and complain but I have learned that even for 50cents I will go back and argue just on principle.
Better Yourself from North Carolina on August 07, 2014:
Excellent hub! It's amazing how much thought goes into getting people to spend more time and money in a store. I've definitely noticed more stores implementing the Aisle of Temptation, and I make sure to keep my eyes forward as much as possible to avoid temptation.Well done!
RTalloni on August 04, 2014:
Useful information for consumers. Congrats on your Hub of the Day award for this post that can give a heads up where needed.
Huntgoddess from Midwest U.S.A. on August 04, 2014:
I really like this article. It has a lot of great information.
As far as groceries go, just read labels, and mostly purchase items that contain only one ingredient (potatoes, chicken, etc.).
Don't buy margarine. Butter is healthy. Don't buy anything with high fuctose corn syrup.
In any grocery store, buy mostly in the outer "ring." Try to stay away from the inner aisles --- as much as possible.
Try to buy from local farmers as much as possible. Go to farmers' markets.
Thanks so much for this very informative article. Personally, I wouldn't blame the manager so much. She or he is pretty much a wage-slave also.
It's the bigwigs, in the corporate offices. They are the ones who get the big profits from these especially designed floor plans.
Eleanore Ferranti Whitaker from Old Bridge, New Jersey on August 04, 2014:
My son worked in retail at Guitar Center for 5 years. The horror stories in that place are legend. The same for Value City Furniture. These are retailers who are practiced in the art of "Bait and Switch." Their ads are the sale prices. Most people believe that % off is off the advertised price. In truth, these retailers use phony advertising strategies to bring buyers into their stores.
cfin from The World we live in on August 04, 2014:
I truly believe that some, not all retailers are clearly manipulative in their marketing practices. Black Friday alone works as proof of this. Last year I joined people lining up outside of best buy. I spoke to a few people who would spend 2 hours or more of their time because of the hype, to get $20 off an ipad. The ipad, however, was a 2nd generation. When I told them that you could buy a 3rd generation for cheaper, they refused to believe me. They pointed to the leaflet and said "The ipad 2 is the one everyone wants...see?". I was astounded.
Another example is BOGO V 50% off. It's the same thing, except BOGO requires you to buy two items. The employees of the store stay late, even past midnight at places like Aeropostale changing signs and rearranging merchandise. They know that the prices haven't changed, but the customers don't seem to always realize. New flashy signs, promises of sales and trickery of words is enough to justify the $8 per hour they paid those people the night before.
miss_jkim on August 04, 2014:
This is a great article. It is every shopper's job to arm themselves with the knowledge and ability to shop smartly. However, there will always be folks who just don't care. My mother used to tell me, "A fool and his money are soon parted." I'm surly no fool; I work too hard for my money.
Eleanore Ferranti Whitaker from Old Bridge, New Jersey on August 04, 2014:
Great article. Frankly, I've lost all interest in gamers of any kind. I find their dishonesty and inability to project integrity a turn off. Last week, I walked into my grocery store to buy 5 lb.s of potatoes. Oddly, they only stocked 3 lb bags ...at the same price as 5 lb. bags. Not a gimmick?
I laugh when I buy a can of tuna "packed in water." It's really the other way around...Water packed in tuna.
Retailers use all manner of tricks to sell, sell, sell, sell, sell. That's why I don't buy, buy, buy, buy. I'm sick of having sales rammed down my throat by hot shots out for a fast buck. I buy what I need, when I need it and at the price "I", not they, choose.
One chemist friend of mine told me he took a study course in the science of color. Ever notice how the most subtle colors are used in upscale restaurants and in fast food restaurants they choose orange, yellow or a combination of other wild colors?
As my friend stated, colors affect mood of buyers of any goods or service. Subtle colors keep a customer spending. Bright colors are intended to bring in more customers and subtly prohibit "hangers on."
I wrote a short story once about Bizarro Sales World where everything, every second of every hour was a sales pitch. Needless to say, the people who lived in Bizarro Sales World had gone postal in droves.
Christopher Wanamaker (author) from Arizona on August 04, 2014:
Hello Chinaimport - I have also spent many years in my youth working for retailers. I have seen all of these ploys put to use by my employers. I agree that things are certainly better for the customer today than they were 50 years ago however retailers still use these (and other) tactics to boost sales. I realize that this article may not necessarily represent the philosophies of every retailer in business today but that is not the point. My goal with the article is simply to inform readers what some retailers are doing to get you to spend more money. I appreciate you taking the time to prepare a comment on this article.
Kamal Mohta from Guangzhou on August 04, 2014:
Your article seems to convey that big box retailer’s deliberately use tricks to fleece hapless consumers. I have worked closely with many big retailers during their store rollouts as our company supplies retail fixtures to set up a new store.
Let me tell you that people who design and rollout stores (project manager, visual merchandizers, planners) are normal people like you and me just doing their jobs. As you pointed out, there is an intense competition in big box retailing segment that has pushed companies to innovate.
Foot fall studies and merchandise presentation, both are responsibility of a visual merchandising and store design team. Their job is to provide a better shopping experience within a limited budget available for a store rollout. If you compare retail store of 1960s to now, you will notice mostly things have changed for better. There are better signage and way finders. Safety has improved.
I do agree that there are many proven ways to stall a customer by providing visual distractions and guide her to a cold zone where sales are falling. Retailers do resort to such tactics. They do this not because they want to but more for reasons that other retailers would resort to such methods and eat in their revenues.
Looking at the bigger picture, why blame retailers only? In today’s world TV, internet and social media are also modifying your opinion in a subtle way.
As a consumer myself I share your concern. I think there is a need to increase awareness among consumers and your hub is a step in the right direction.