The holiday season offers an opportunity for marketers to help consumers find and buy gifts for their friends and family that will hopefully bring feelings of joy and love.
This is why we sought expertise from Consumer Psychologist Shilpa Madan. With a Ph.D. in Marketing from Nanyang Business School in Singapore, she has spent the better part of her career trying to understand the links between consumption and the pursuit of happiness.
After explaining the psychological benefits behind buying gifts for others, Madan shared a few ways she saw marketers using consumer psychology this gift giving season:
People prefer avoiding losses to acquiring equivalent gains.
“If I were to tell you that you would lose five dollars rather than gain five dollars, you would read losing five dollars as the bigger thing,” Madan said.
In other words, consumers believe it is better to not lose money from their wallet than to gain it from somewhere else.
Marketers play into this by capitalizing on a consumer’s fear of missing out. Which Madan says is especially effective online.
Taglines of the season often read like breaking news. “Get this deal now or never!” or “50% off merchandise for today only!”
Losing something they could’ve had, like a great deal or a hot ticket item, can feel like a defeat to a consumer. Including a sense of urgency to act before a deal becomes unavailable is often how marketers reel consumers in.
Having access to customer email lists makes it easy for marketers to send reminders on anything and everything, Madan explained.
Because the holiday season can be stressful, these reminders are meant to make consumers’ lives easier. Additionally, they’re a way to get consumers to buy more products.
Madan pointed to more personalized emails reminding consumers to buy for a specific person in their life. Whether it was their “picky friend” or their mother, brands were then able to point to products on their website that would be suitable for the recipient.
These reminders also came in the form of Christmas, Hanukkah and New Years Eve countdown clocks.
“Buying gifts for others can be overwhelming for many during the holiday season,” Madan said. “Brands are looking to help simplify customers’ lives so they continue to drive value of the brand but also within the messaging."
Drawing Out the Hype
The internet has enabled marketers to draw out the hype and sales around holiday shopping.
One obvious display of this, according to Madan, is how the discounts around Black Friday have been extended from one day to many. She said the majority of these sales are exclusively available online, and wouldn’t be as effective in a brick and mortar setting.
A significant amount of the hype came in the form of act now emails, “don’t miss out” social media posts and countdown clocks on retailers’ homepages.
All of these consumer psychology tactics used during the holiday season helped marketers to stand out during the most lucrative time of year.