Don’t get seduced by the hype.
The holiday season is upon us and—based on all the Internet ads, television commercials, and store fliers about—it appears you’ve been granted a golden opportunity to reap huge savings on gifts for everyone on your shopping list.
We are, of course, being facetious—store sales are little more than hype and hyperbole conducted to move merchandise and boost retailers’ bottom lines. And yet even the savviest shoppers among us can be drawn in by the plethora of psychological tricks stores employ to get us to make impulse purchases and overspend.
Do not despair. It is possible to show restraint and become a more rational shopper. Whether you’re planning to head to the mall on Black Friday, traipse down Main Street on Small Business Saturday, or fire up your laptop on Cyber Monday, all you have to do is remember these three basic principles.
Do your homework
The difference between getting a bargain and overpaying for an item is all in the price you pay. Trouble is, the reference price for an item—that is, the amount you expect to pay based on a previously advertised price—is not easy to discern. We live in a discounted shopping culture, where the vast majority of retailers host sales on national holidays. Hallmark holidays, like Valentine’s Day, Mother’s Day, and Father’s Day, are also occasions for sales, as are back-to-school time and graduation season.
Read the full post at Fortune
Juanjuan Zhang is the Epoch Foundation Professor of International Management and a Professor of Marketing at the MIT Sloan School of Management.
T. Tony Ke is an Assistant Professor of Marketing at the MIT Sloan School of Management.