UAE: Why do we get drawn to discount sales and promotions?

Dubai: “We all love a bargain,” says Dubai-based Angeline Chandrasekaran. As a clinical psychologist, her reasoning is revealing.

“The perception of a discount can activate our reward system which signals in our brain that this event will lead to a favourable outcome,” she analyses.

Giving the example of a washing machine purchase, she says, “After searching through countless online sites and reviews, I eventually went into a well-known supermarket to purchase the product. This was due partly because I am old school and want the physical touch and feel of a product and secondly there was ‘a real bargain’ as the price was half the cost.”

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According to her, the price was set for a certain period of time. “Therefore, it activated a fear response which led to impulsive buying. Besides the sudden need or urge to complete the purchase, there was also the thrill and pride of being able to say to others (therefore, garnering social affirmation) that I saved money (and was being responsible),” adds the psychologist from Lighthouse Arabia.

In essence, multiple emotions are triggered that motivate our behavioural response to spending which can override a rational response of buying something if and when needed, she points out.

Fear of Missing Out (FOMO)

Dr Dhanesh Gopalan, another clinical psychologist from Abu Dhabi, agrees.

“When certain things are running short on stock, selling out rapidly, or are available for a limited time, they trigger the “Fear of Missing Out” response for a customer. The idea behind this piece of customer psychology is clear – people don’t like to miss out on great things, be it a memorable experience or a generous sale,” says the NMC Royal Hospital specialist.

“The ‘buy one get one free’ promotion is a big attraction for many of us. Offers and discounts and in-store promotional displays, play a key role in buying additional stuff. If a person arrives at a store expecting to spend an average of Dh70, he tends to spend an additional Dh40 due entirely to aggressive promotions,” says Dr Gopalan, who cites a study that found over 87 per cent of shoppers making impulse buys.

“The psychological key of promotions and discounts is to make customers happy. By offering them good deals, their sense of achievement and progress is boosted. This way, they are encouraged to buy more – and more often,” he adds.

Ironically, Dr Gopalan says in the name of the discount, we often end up buying more than we should, the sum total of which may actually add up to far more than an undiscounted product.

Chandrasekaran also points to how discounts influence perception. “You feel like you have more money to spend because you “saved”. The next product that you decide to purchase is slightly more than what you expected to spend but because you “saved” on the one product, you are technically getting the next product at a reduced rate. Talk about mental gymnastics that we engage in. So even though we paid more and got more than what we originally intended, we reason that we saved. In essence, our reasoning skills are being tantalised by clever marketing,” she says.

Need-based shopping

As a discerning shopper, Gaia Cianci, a PR specialist, says she takes advantage of sales and promotions only to buy products or services that she genuinely needs. “Otherwise, they do not motivate me to purchase something that was not initially part of my plans. I believe that minimising consumption is important, particularly from a sustainability perspective in order to reduce waste and the use of natural resources to produce these products,” she argues.

But even so, she admits a good bargain is satisfying, considering she is saving money, “especially when the discounts are 50-80 per cent off.”

“I believe that’s the psychological aim of the promotions and discounts, to make consumers feel smarter about their purchase. It happens all the time, whether it is a skincare product or a piece of clothing. I try to take advantage of the sales to purchase everything I need so that I won’t need to buy the products at full price when promotions are not there. It connects to the idea of scarcity as it encourages me to buy more as discounts are not always available,” she adds.

Another resident Alyssa Mariano, co-founder and CEO of a peer-to-peer social marketplace app, says, “When buying something at a cheaper price, it’s always exhilarating. It can be easy to get lost in online sales and discounts, especially during sale season! (Like Black Friday and Cyber Monday). But, I still try to remind myself “do I really need this item?” I try not to buy any more than I need during a promotion. If there is a bundle sale on household items or goods, then I will take advantage of that. For example, buy 2 get 1 free soap!”

She says, “Sales and promotions definitely attract most people. But it’s always good to do your market research and make sure it’s the lowest prices vs other competitors, and the company has not just raised the prices and offered a ‘discount’ on those raised prices. I also try to make sure I’m always buying only things I need, and that those things are good quality items.”

Value for money

Customer psychology and pricing are at the centre of all promotions.

Bertrand Loumaye, Country Manager of Carrefour in the UAE, at Majid AL Futtaim Retail, explains, “When choosing where to shop, price plays a crucial role in a customer’s decision. Promotions are a key factor when it comes to meeting customer demands by ensuring value for money. Just last year, we launched over 80 promotional campaigns to cater to our customers. “

Loumaye lets on that inhouse data shows that promotions become key considerations for customers during celebratory occasions.

“They look to retailers to help them effectively manage their spending and maximise savings. This is reflected in a significant increase in sales during promotional periods, which differs depending on the season, the campaign and the offers available.”