When it comes to shopping choices, we overestimate our abilities to keep our impulses in check. You can avoid poor shopping choices by developing a host of shopping mental skills. That’s the key take-away message of this episode of the Wise Decision Maker Show, which describes what influences your shopping choices.
Video: “What Influences Your Shopping Choices?”
Podcast: “What Influences Your Shopping Choices?”
Links Mentioned in Videocast and Podcast
- Here is the article: What Influences Your Shopping Choices?
- The book Never Go With Your Gut: How Pioneering Leaders Make the Best Decisions and Avoid Business Disasters is available here
- You are welcome to register for the free Wise Decision Maker Course
Transcript
Hello, everyone, and welcome to another episode of the wise decision maker show where we help you make the wisest and most profitable decisions. And today we’ll talk about the most profitable and wisest decisions about shopping. Specifically, what influences you to buy what you buy. In various contexts, you might think you’re a fully rational person who buys just what they intentionally think through and deliberately want to buy. But research shows that’s not the case, however much we might believe it. So that’s something that you need to realize is what actually influences your shopping decisions? And how do you become better at making the wisest, most profitable shopping choices? in all sorts of shopping? Whether you do it for your family, whether you do it as part of your professional business, all sorts of shopping decisions, how do you make the best shopping decisions? How do you buy the right things at the right time to fit your needs, not the needs of the people who are selling you the stuff that they want to sell? So that’s what we’re gonna be talking about, how do you make the right purchase decisions? Now, we often ignore the reality that we are not very rational, it’s very easy to make pretty irrational choices when we’re making shopping decisions, we’re going to be focusing on shopping decisions. So we’re going to be focusing on online and offline all sorts of shopping decisions. It’s easy to make bad choices in all sorts of contexts, because we tend to overestimate our extent of self control, self understanding, self management, we tend to greatly over focus and perceive ourselves as being more in control of ourselves of our decisions of our shopping choices than we actually are. We actually shop pretty impulsively, we’re mainly emotionally driven, even for the biggest decisions in our lives, like what house to buy, or what job to take. Or if you are in a professional context, you know what major service vendor to hire, or something like that, to make pretty rational decisions. And so this is important for us to know, and to address these dangerous judgment errors called cognitive biases that cause us to splurge on things that we don’t want to splurge on. Sometimes, you know, that’s not a bad thing to splurge. But that’s only when we deliberately think through and make that choice, whereas too often we’re just irrational about it. We’re pulled by our emotions, we’re tempted, and then we make bad choices that we leave that come to regret. Now, first, we need to understand what factors affect our shop, there are several external factors and several internal factors. The internal factors have to do with cognitive biases, external factors have to do with the external environment. Of course, these institutions, organizations, folks who want to make us sharp cause sharp shapes in our environment, our shopping environment in such a way as to induce us to shop online sites, for example, have reviews, there’s some reviews offline, but especially prevalent. Online, you’ve probably seen tons of reviews, and whether you make your purchases on Amazon, Google, Yelp, all of these reviews, many, many shoppers trust online feedback, sometimes more than they trust feedback from their friends and family, especially younger people, we see that from studies of what drives people to buy. And the online reviews are the second most or top most important factor depending on the study. And depending on the age of the participants. For younger people, they tend to be more important. For older people, they tend to be less important. So that’s something to really understand. But they’re all important even for older people. So usually the number two factor for older folks. Unfortunately, many of these reviews are fake, lots, and lots and lots of fake reviews probably heard that. And there are actually a number of companies that provide fake reviews for products for venues, they actually sell fake reviews, they’re specializing in providing that service. So when you see a lot of good online reviews, especially short ones, or brief ones, great products, and so on, it’s often going to be the case that the reviews are fake. And of course who buys fake reviews for people who don’t have very good products to sell you. They’re just trying to make money on selling you by buying the reviews and selling your crappy product. So you want to be very careful about whether you want to look at reviews that are not five stars, don’t look at one star reviews because you sometimes have companies that buy bad reviews for their competitors’ products. So they are bashing their competitor, which doesn’t really want to look at reviews that are in the middle 234 stars and ones that are lengthy and describe their experience with the product to get a more credible sense of what’s actually going on. So if you have like a 4.9 product doesn’t mean that everyone who left a review saying great product. Five stars is a fake reviewer, but if you don’t see any four or three star reviews give a lengthy description of why they like the product. That’s something to be suspicious about. So that’s something for free to be really aware of. Then another external factor is the quality of websites. We see a lot of research showing that the quality of websites rather than the quality of the products often compels us to buy. So if you have a similar product presented on two websites, one is higher quality and better graphics, all the design and so on another lower quality, lower graphics, lower design, people will tend to buy the product from the high quality website, even though this product may cost much more there. So this is a problem. And even though the product may be worse, when you have a better quality product and the worst quality product, the better quality product on the worst looking website will cause people to generally buy a lower quality product on a better looking website. That’s a problem for you. And that’s a problem for me, that’s a problem for everyone who shops. So that’s the quality of websites then think about that’s online reviews on websites and in person. shops have, of course, a lot more control over us. When we go in personnel, we don’t see reviews unless we research something on brands, but they control our whole environment. Whereas online, the environment that’s controlled is our visual environment. That’s the main environment, sometimes they have sounds, but I always make sure to turn off the sounds, I hope you do that as well. So that the sounds of the website don’t compel you to shop. So they only control your visual sense. But in the store, it’s not so simply visual, it’s visual, auditory, they can influence you for of course, tactile smells, they can influence, you have third touch, tactile, they can influence you for smells. And so there’s a lot of stuff that’s going on visually, see, hear, smell, touch, all of that sort of stuff that really influences us. So it’s even more powerful the influence on stores. So that’s something to be very much aware of. And of course, the visual impact in stores is much greater. Because online, you’re only looking at your phone screen or in your laptop, whatever monitor computer, that’s a small square, relatively speaking, where the store you’re completely surrounded by all of the products, and the store can do various experiments to see what influences you to buy what you buy. Now, when you shop online, you can take steps to protect yourself by making comparisons to make better decisions. There are a number of comparison websites that you can use to make better decisions. So you can see, you know, go to the net or top 10 or various other review comparison websites to compare a number of products together and write reviews. So you could actually compare things online. That’s a beneficial thing. And that’s a much more credible review, when you have external third party reviewers who have no stake in the game for reviewing the products, rather than the reviews of the products themselves that might be bought in fake. So that’s kind of something for credible websites, like I said, CD net wire of all of those sorts of stuff, the top 10. And you can also make comparisons on different websites I can go to, for example, Google Shopping, will give you comparisons of prices on different websites for various products. So you can check that out. When you’re shopping in person, you need to understand that you’re really overwhelmed by all the visual stimuli, especially that it’s very powerful. Humans tend to be more visual creatures than anything else, we tend to be very much visually processing tactile, as well. But visuals are very important for us. So you need to understand that you need to protect yourself from these visual stimuli. And it’s really hard to resist those impulse purchases. And visual stimuli are the most prevalent, but smells are really powerful. And you’ll be surprised how powerful they are to really reach deep into our the smell sensors most connected to our brain, and most immediately connected to our brain. So stores use that quite a bit to influence us and not simply about food, nice furniture smells, or something like that can also influence so you have to realize that and I would recommend doing more online shopping than in person shopping. For that reason. If you don’t want to overspend and splurge by buying things that you don’t want to buy, it’s much easier to resist doing that online than in person, less fun, but much easier to resist splurging. So that’s external factors. What about internal factors? What’s going on within us? Well, these are the cognitive biases that I mentioned earlier. These are the dangerous judgment errors we make because of how our brain is wired. So there’s four dangerous judgment errors that are particularly important to shopping that I want to highlight. And so are these cognitive biases. The first one is restraint, bias, restraint bias. So it has to do with our ability to restrain ourselves, we tend to greatly exaggerate our ability to control ourselves the moment we think, oh, we’ll be fine. We’ll control ourselves. I won’t get that second Dartmouth right. Or I won’t buy that appealing thing at the display counter. It will be fine but we are very much powerfully in flow Once by what’s happening in the moment, and we tend to greatly exaggerate the extent to which our future self will be restrained by are in the moment by our desires right now. So if I go to the store right now, you know, I might think while I’m here, before I go to the store that I won’t buy stuff that I want that I didn’t actually intend to buy it, but I’ll probably will just because my in the moment in the store self will have a difficult time restraining himself from that. Another factor is called the purse post purchase rationalization kind of cognitive bias post purchase rationalization. We justify our shopping decisions after making them rather than before making them . What happens in our brain is that our emotional part of us pulls us to make the decision to buy the thing. And so we buy it, and then we come home or after repaying, we rationalize it to ourselves, we say, well, there’s good reasons for us to buy reason x reason why reason z. That’s why I bought it. But the reality is you bought it because you’re emotionally pulled by it most likely due to the manipulation by the store, maybe some fake reviews online. And that is a problem for us. That’s something that’s really caused us to make bad decisions. So you want to make sure to do your rationalization, to explain to yourself why you want to buy something before you buy, rather than try to have a story afterwards about why you bought it. So okay, so we have restrained bias post purchase rationalization, there are two more cognitive biases that you need to remember, the framing effect. That’s how your options to buy something are framed. And stores really know this well. And they influence us very powerfully, where the context by which something is presented, really influences whether we buy it or not, which really determines our decision. So for example, if it’s something presented on a shelf at eye level in the store, or is it presented somewhat below eye level. And if it’s presented at your eye level, let’s say you’re an adult, you know, let’s say you’re five foot eight, right? So it’s present on that shelf. What about kids who are going with you? Is it what’s presented in the air, their eye level? And what are they tempted with? So you want to be thinking about this, what’s presented there? That’s kind of like one dynamic in the stores, then, of course, online, what are they presenting next to each other in the websites, we have, for example, we know we have research showing that if there are three items presented a, b and c, and B and C are similar on all characters, a is different from being scenes, it’s in same category, but somewhat different, b and c are similar, but C is higher priced than will tend to buy B even if that’s not the right option for us, even if a might have been the best option for us will tend to be weighed toward buying B by that presentation. So that’s a problem for us. That’s how they’re framed for if you want to make rational shopping decisions. Now, the fourth one is attentional bias, where we’re drawn by our attention to make shopping decisions that are not so great for us, we focus on what’s the most emotionally compelling part of whatever the product happens to be in front of us. Rather than all the other important factors, you know, if we like the color, or feel like the person presenting it to us, you know, if we’d like the real estate agent who’s showing us the house, if we like the backyard of the house, if we look at the car, and we like how it drives, if we are looking at I don’t know some product from the store, and we’d like the packaging where it says no, now it says organic or something like that, we will be influenced by that rather than considering a lot of other factors that might be quite a bit more important than that single one factor that drew our attention. So that’s a problem for us those four cognitive biases that you need to be aware of. So to defend yourself, of course, you need to address the external factors and the internal factors to address the internal factors you need to commit to being aware of and fighting these biases. So restrained bias, you need to be aware of that. And you need to make sure that you take steps to restrain yourself before going to the store. So for example, even if you set a budget, you can say, Hey, I’m not going to buy more than this amount of money. Same thing for the website of a when you go on a website. So that’s kind of a way of fighting the restraint, bias and post purchase rationalization. You want to address that by making sure that you have to explain to yourself why you are buying the thing before you actually buy it, and so on. So these are the kinds of things that you want to be thinking about the framing effect. You want to make sure that you’re not super influenced by things the way that that information is presented to you so that you don’t simply click on the first page of Amazon and say, Okay, I’ll be you know, I’ll be fine with this page. You want to go through, you know, a couple, two more pages. third page, see what the kind options are that you have. And that simply settle on what’s at the top because of course, Amazon will show you that more pricey things at the top, it’s in their interest to buy or the ones that are, have the biggest profit margins for them, for example, and the same thing in the store, you don’t want to only look at the shop shelf that’s on your eye level, which is very tempting. But you want to look at all i levels and know that the products that they want to sell you less because they have less profit margins on them will likely be knowledge, the level of adult and the same thing for the child, you know, that there’ll be trying to tempt the child with the eye level of the child. So you want to commit to fighting these cognitive biases and make sure that that’s something that you are addressing within yourself. So think about that, then change the context to limit bad shopping decisions. So I talked about the context. I strongly recommend that you choose to do more of your shopping online. It’s much easier to address bad shopping decisions online than in the store because you have much more control over your senses. And that you go to review websites to look at products rather than trusting the reviews in the potentially fake reviews. And if there are no good review websites of a specific product, and of course, they’re far from all products, have good review websites, have quality third party reviews dedicated to them, then look for reviews with 234 stars to give lengthy descriptions of what’s up, delay your decisions by at least half an hour. To get that emotional, attentional bias to address attentional bias, we talked about that. That’s one of our cognitive biases, that causes us to be very much prompted by the emotional salience of whatever fact we fixate on. So you want to delay your decision by half an hour. And give yourself time to calm down for all possible I mean, obviously, it’s not gonna be possible in the store. But if you’re going online, and you’re thinking about buying something, and if it’s not a small decision, if it’s like 100 $200 thing, then take a half hour to think about it, and not think through the full lead but just can do something else, and go away and come back. And then consider other factors rather than the one that initially drew you to what’s going on to address the attentional bias. And make a list of shopping priorities. It’s good whether you’re going online, and especially good when you’re going to the store, make a shopping list to make sure that you get your priorities met, and that you don’t buy too much stuff. Too much stuff that’s not in your list. Then finally, you want to get high quality advice like from this show on how to address bad decisions, how to address bad shopping decisions, so improve the quality of your decision making, not simply the specific object level shopping choices that you’re making. But the matter of the meta refers to the way you think about a topic, the way you process the way you understand the topic. So the meta decision, the meta shopping, how you think, how you make your decisions, how you approach shopping. So use this as a strategy. Think about your shopping, think about your shopping processes and decisions and change that change the process. So get good advice and chew as part of your shopping decisions. Alright, everyone. This has been another episode of the wise decision maker show. I hope we’ve helped you make better shopping decisions in all life areas. And I hope you will subscribe to this show at whatever venue you’ve been checking us out. We have a video cast in the podcast, so make sure to check out both there in the notes. Please click Like and share your comments. I’d love to hear what you think about it. Email me at Gleb at disaster avoidance experts.com. Again, that’s Gleb at disaster avoidance experts dot com to find to tell me what you thought and happy to chat with you about given there’s going to be a lot more information about the what you’ve heard about what influences your shopping choices and how to make better decisions in the notes to this podcast and I will look forward to seeing you next time. In the meantime, the wisest and most profitable decisions to you, my friends.
Transcribed by https://otter.ai
Originally Published at Disaster Avoidance Experts on June 15, 2021.
