Everyone likes a discount, but until recently shoppers had to wait for specific periods of the year for big sales, most notably after Christmas and in the New Year.
More recently, many high street shops appear to have sales at various points in the year and often have large ranges of stock on at a permanent discount. Some of these additional sales periods are seasonal, but others are for smaller events that shopping centres and retailers organise themselves, like fashion weekends.
A study by market research group IRI in 2015 discovered that far from being the exception, goods that are on sale or multi-buy offers (for example buy two, get one free) make up a significant part of products sold to European customers.
More than a quarter of goods (28.4 percent) sold in European supermarkets and major retailers were on promotions— rising to more than half (54.6 percent) in Britain.
At first sight, this looks like a good thing for consumers who would prefer to find the best possible bargains and save money by reducing their monthly spending. But while there are ways to exploit this trend, there are pitfalls that consumers can fall into.
Shop for Christmas at Easter
For the purely economically rational shopper, meaning someone who buys only what they need for their personal best interest, ongoing sales offer an opportunity to buy the goods that they had planned to buy at a lower cost.
While a lot of people don’t have the level of foresight and self-control of this mythical rational shopper, some could get close. A study by consumer analytics company Foresight Factory in 2017 found that in the previous year more than a quarter of consumers (27 percent) hunted for early bargains on Black Friday in late November.
Even more striking was that one in five consumers had already purchased a Christmas gift in early May, while 29 percent had done so by early October.
Online shopping technology can also help as people using internet shopping platforms can add the goods they want to their “wishlists” and only buy them during sales, saving money.
Furthermore, one study found that the use of wishlists decreased the likelihood that people actually bought the item because of the delay between choosing the item and the decision to pay for it.
Keep an eye on the anchor
Those of us without that level of self-control could fall victim to certain biases during a shopping trip. One danger is to focus on the amount of money saved rather than the amount you’re actually still spending.
A £2,000 watch reduced from £10,000 looks like a bargain because of the 80 percent saving. But is it really worth £2,000? The higher price acts as an anchor for the way the buyer views the value of the good on offer.
Retailers also try to lure in shoppers by warning that the deal will only run while stocks last or until a specific date. This works by tapping into our human tendency to fear losing out, known as loss aversion and now widely known as FOMO (fear of missing out).
One tip from this BBC guide is to take a break before making a decision, for instance by adding items to a wishlist.
Do the maths
The lure of getting a bargain can attract people to buy more than they originally intended. Research by the Money Advice Service, an independent organisation funded by the UK government, found that supermarket offers encourage people to spend 21 percent more than they had intended.
It found more than three quarters of shoppers (76 percent) regularly spend more than they mean to on a food shop because they are enticed by special offers and deals. They end up parting with an extra £11.14 on average per shop.
The fact that many shoppers might be rushing to get their shopping done won’t help in making sense of some price tags. For instance, an offer to “buy one and get 50% off another” can be hard to work out in your head unless the price is a round number.
An investigation by the consumer group Which? in 2013 found many examples of prices expressed in confusing ways. In one case a store raised the price of a yoghurt from £1.50 to £2.18 before it went on a "two for £4" offer, costing shoppers £1 more.
Not only that, but supermarkets now have to mention the unit price on price tags, but often they are phrased in different ways. For example, single tomatoes might be labelled with a price per kg, while the same tomatoes pre-packed could be labelled with a price per 100g.
The MAS survey found that just 2 percent of 2,000 people could identify the best deal when given four examples of prices explained in four different ways.
One example was: Of the following options for milk, which represents the best deal?
(1) Six pints of milk for £1.80
(2) Four pints of milk for £1.40
(3) Two six-pint cartons of milk on offer for £3.50
(4) Two four-pint cartons of milk on offer for £2
The correct answer is 4 – did you get it right?
One way to tackle overspending at the supermarket is to write a shopping list and trying to stick to it. Another is to avoid shopping when you’re feeling hungry, tired or downbeat as those states can make you spend more than you intended.
Retailers know we all love a bargain but understanding some of the reasons behind what look like special deals can help you to be a wider — and better off — shopper.