Worked example 1
A supermarket adds chocolate bars and phone chargers at checkout queues. Impulse sales rise 22%. After introducing contactless payment, average transaction value increases 15% but customers underestimate their monthly spend when surveyed. A buyer returns an expensive coat after sleepless nights worrying about the cost. Explain using buying psychology and evaluate the retailer's changes.
Show solution outline
POS displays — impulse buying: Checkout waiting time + low-cost items = classic impulse purchase trigger. Bypasses decision stages (2.3.1) — no search or evaluation. 22% rise confirms POS effectiveness (industry standard tactic).
Contactless — pain of paying: Reduced physical money exchange weakens salience of spending (Prelec & Loewenstein) → 15% higher transactions. Shoppers underestimate spend — payment decoupled from consumption moment.
Coat return — cognitive dissonance: Expensive high-involvement purchase (2.3.1) → post-purchase dissonance (Festinger) — sleepless nights = psychological discomfort from perceived bad decision → return as dissonance reduction.
Evaluate — retailer benefits: Combined changes maximise revenue per visit — POS captures impulse; cashless removes spending friction.
Evaluate — consumer welfare concerns: Exploits impulsivity — checkout items target children and fatigue (end of shop). Cashless overspending — especially harmful for budget-constrained consumers. Ethical tension — profit vs financial wellbeing. Returns policy partially protects but dissonance causes distress before return.