The Thrill of the Hunt

I have a favorite, although rather obscure, Monty Python sketch. An older housewife type (a "pepperpot") sits on a park bench. Another approaches dragging a car engine on a cart, saying she’s been shopping.IC_engine

"Did you buy anything?" asks the first.

"A piston engine!"

"What d’you buy that for?"

"Oooh! It was a bargain."

It’s not their most memorable bit. But it deftly sums up a way in which we can short circuit our own thinking when we shop.

As I’ve written here several times, when we shop we are not creatures of cold calculation. We can’t be. There are just too many choices at the mall and not enough time to find the one optimal allocation of our money over everything we could buy. Instead, we operate on a set of learned behaviors that approximate the optimal outcome. One of those is bargain hunting.

Bargain hunting not only saves money, but for most of us it is satisfying fun. Which is what makes it dangerous. There is something uniquely delightful about scoring an item for less than it should cost, that is, for less than it is worth.

If you didn’t know better, you might think that the greatest achievement in bargain hunting would be to find exactly what you were looking for at a great price. That’s certainly a good thing, but as shopping thrills go it is inferior to spotting a great deal on something you weren’t intending to buy. Discovering that the sweater you went to the store to buy is 50% off is passive. It is merely found money, like receiving a gift. But noticing that the gloves are 80% off and snagging the last pair is an active achievement. You are better off because you are a wily and decisive consumer. And that’s a rush.

I was reminded of this phenomenon by a recent New York Times Magazine article on on-line off-price retailers of luxury goods. That discounters of high-end apparel and accessories are doing well just now shouldn’t be much of a story. Recessions, particularly the first year of them, are usually the best of times for outfits that clear out the inventory of other retailers.

It’s not that folks are that much more interested in a bargain in recessions. (There’s no shortage of people interested in the thrill of buying good stuff cheap even in the best of times.) What makes the early days of recessions great for these companies is the generous supply of stuff to sell. Retailers and manufacturers of high-end merchandise start recessions stuck with a lot of stuff they ordered the year before when times were better.

But that’s not what the Times story is about. The three e-tailers discussed use a lot of theatre in how they sell their goods. They induce a sense of artificial scarcity with "time limits and unpredictable and quickly rotating supplies". And they build up a sense of "exclusivity" by being "invitation-only" and not allowing the sites to be indexed by search engines. You gotta know somebody.

Of course, exclusivity is all relative. The sites have about 1.5 million members each. Getting in without an invitation requires spending an arduous day or two on a waiting list. But the theatrics apparently work. There’s only two Dolce & Gabbana shorts at $278 left and you’re lucky to even know about it and you better hurry up and buy them right now!

What makes these sites effective, and dangerous to the consumer, is that they artificially create the feeling of scoring a great bargain without (necessarily) offering any great bargains. That’s not exactly a first in the world of salesmanship, but the new format may be enough to throw the normally sage shopper off his or her game. So proceed with caution. This is where piston engines come from.

No Comments

  • By Evan, October 13, 2009 @ 2:48 pm

    The limited availability to join was one of Madoff’s KEY selling tools!

  • By Dasha, October 13, 2009 @ 5:40 pm

    That skit summarizes why I hate bargain shopping. Since I live in NYC, I can do all my “window shopping” while walking around on the street and taking the subway. When I decide on a look I want (a fitted wool peacoat or jeans, for example), I check all my usual stores for it, and pick the one that is the best combination of price and what I am looking for. Shopping done. And I never look like a slob or out of style, and don’t have a closet full of stuff I never wear.

  • By Rob Bennett, October 14, 2009 @ 9:21 am

    This is why the solution to overspending has to be emotional in nature. The people trying to sell us stuff use psychology against us all the time. We spend most of our money management energies reading “tips” for saving money, which presume a rationality on our part that does not exist.

    Once you become excited about saving, you are on your way. You can balance your excitement over spending (which you should feel) with your excitement over saving.


  • By TH, October 14, 2009 @ 12:34 pm

    The one that gets me is the 2 for 1, buy now! When I’m shopping for non-staple items, I have to walk around the store and write down all those really nifty looking bargains, then go out and look at the list again to decide if there’s stuff on it that I *really* want and/or need. Just walking in with a cart results in *all* of it going home with me. Sigh.

  • By Rick Francis, October 15, 2009 @ 5:03 pm

    There are always enough bargins that purchasing them all will make you broke!

    Has anyone noticed that the language of sales is twisted?

    You see signs in stores that say: Save 50%

    However, if you buy anything you were not planning to buy anyway then you aren’t saving a dime. You are really spending more! These signs really should read: Spend 50% less than usual!

    -Rick Francis

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