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Relaxed shoppers, looser wallets: research studies customers' willingness to spend based on state of mind.

The more relaxed consumers are when they enter a store, the more money they are likely to spend, according to a study published by Columbia University researcher Michael Tuan Pham in the Journal of Marketing Research.

Researchers conducted the study by using videos and music to make 670 participants feel relaxed. When presented an array of items, participants were asked to assess their value using a variety of purchase scenarios, including bidding in an online auction. Relaxed participants bid about 11 percent higher for a digital camera than their less-relaxed counterparts did in the first six studies. The opposite also held true, with less-relaxed participants coming in much closer to the actual value when bidding. The reason? The brain does not feel threatened in a relaxed environment, which encourages "abstract level" thinking about products to purchase in the store.

"In the store, people tend to be much more on guard," explains Bruce Temkin, managing partner of The Temkin Group. "They have to protect themselves from a lot of messages going on embedded in someone's environment."

It is "no surprise" that relaxed consumers made decisions differently than those who weren't relaxed, Temkin adds. However, he urges retailers to look beyond in-store behavior when analyzing customers. "For companies to make use of this, they have to also understand how people feel about the decision after the fact and not just look at a single step. Instead, look at the entire process," he explains.--Brittany Farb


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Title Annotation:Insight: CRM TRENDS AND NEWS ANALYSIS
Author:Farb, Brittany
Publication:CRM Magazine
Date:Nov 1, 2011
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