Buyology Article Archive

By CHRISTINA PASSARIELLO

(The following article may be found online on the Wall Street Journal website.)

In the past year, the guilty pleasure of shopping has turned to plain old guilt.

Guilt has always been part of the shopping experience. But retail executives say it has become such an overriding emotion among shoppers since the economic crisis set in last year that it is delaying the recovery of the luxury-goods industry. Shoppers are suffering from "luxury shame," consulting group Bain & Co. said in a research report earlier this week.

Right now, guilt is the single biggest problem in the way of getting people to shop again, said one executive of a European luxury powerhouse - although he declined to be identified for fear of sounding too negative about his outlook.

"Guilt has really increased in the last year," says Martin Lindstrom, a brand strategist and author of "Buyology: Truth and Lies About Why We Buy." "It can hamper any other good feelings" about shopping, he says.

Now some luxury brands are emphasizing marketing tactics that they hope will push away the guilt and reboot consumers' desire to spend. That can mean touting a special justification for splurging - profits are channeled to a charity, for instance - or offering novel shopping experiences that can make people forget their guilt.

"It used to be about keeping up with the Joneses, and now it's about outsaving the Joneses," says Alexis Maybank, the co-founder of Gilt Groupe, which organizes online, by-invitation-only 36-hour sales of high-end merchandise from labels such as Burberry and Matthew Williamson. "We need to encourage people to get excited about fashion." (The double entendre in her company's name dates from an era - 2007 - when the guilt that went with shopping was far less disruptive.)

Browsing and buying release a variety of emotions. Selecting clothes and trying them on produces a high. When shopping feels good, that's the dopamine in your brain, the same euphoria that eating chocolate can generate.

But guilt sets in quickly. "It's not very strong at the beginning but increases when you swipe your credit card through the credit-card reader," says Mr. Lindstrom, who conducted three years of studies in neuromarketing - hooking 2,000 people up to sensors to monitor the brain's response to ads and brands. Guilt flashes up in the prefrontal cortex - the same reaction generated in a smoker who has finished a cigarette.

Guilt is what Carolyn Hsu, founder of The Daily Obsession, a shopping blog, felt after her purchase of a Tod's bag at the beginning of the year. It was one-of-a-kind, she was told at the private luxury sale she attended. She decided to pay more than $1,000 for the large aubergine-colored bag, driven by the fear that she would never find the bag again.

"I try not to have those moments anymore," says the 24-year-old, who also works in marketing. "I still have [the bag], but it hides in the back of my closet."

Guilt is running so high these days that many people are simply not going into stores in order to avoid the temptation to buy, retail executives say. Shoppers are steering clear of the usual shopping zones, says Andrea Ciccoli, the administrator for Italian fashion group Ittierre SpA, the owner of Gianfranco Ferre and the licensee of labels such as Just Cavalli and John Galliano.

In response, some brands are trying to catch consumers off-guard with new outlets for selling. Ittierre is considering having some brands open pop-up stores - boutiques that exist for a few weeks or months - in unexpected parts of European and U.S. cities that aren't traditional luxury shopping districts. The idea is that pop-ups may not activate the psychological barriers that prevent shoppers from entering traditional stores.

Of course, many brands have used pop-ups in recent years to create buzz and test ideas. But the idea has new currency as a way to short-circuit guilt. "People are so disciplined, their super-ego tells them not to buy, and then they don't buy," says Mr. Ciccoli.

Encouraging Internet shopping, as many brands have been doing, can also help break old shopping habits. "Luxury shame" - epitomized by the showy act of walking out of a fancy store with a big shopping bag - is one of the main reasons for the estimated 20% jump in online luxury sales this year, Bain & Co. says.

'Luxury shame' has benefited online shopping outlets such as Gilt Groupe's site.

Online shopping involves different consumer behavior, says Gilt's Ms. Maybank. Instead of planning a chunk of time around going to the store, "you take five minutes out at a specific moment of the day to get the things you need [online]," she says.

Another tactic for taking some of the guilt out of shopping - offering a charitable-giving component - is gaining traction as well, especially ahead of the holiday shopping season, when people tend to feel the most pressure to donate. Shoe brand Cole Haan recently sponsored a typical promotion: Get a 15% discount on a new pair of shoes when you donate an old pair to a designated charity.

Such incentives could help with "the argument shoppers have with themselves," says Sue Phillips, the London-based chief executive of consumer-research firm Synovate Censydiam.

One of the hottest new stores in Paris this year, Merci, fuses fashion with philanthropy. The store's light, loft-like space is as trendy as that of other concept stores, selling apparel from brands such as Stella McCartney, special versions of Annick Goutal perfume, flowers and used books. The difference is that all of the profits, after operating costs are paid, go to children's charities. Last month, Merci - which was founded by Marie-France Cohen as a way of giving back after she sold luxury children's-clothing label Bonpoint - opened a temporary one-month shop in New York with help from the Gap.

The charitable argument may give consumers another reason to visit the store, Ms. Cohen says, although she believes "a consumer who is tempted by an item goes back to being just a consumer."

Other companies are putting more emphasis on the "guilt-free shopping" that is said to come with buying environmentally safe products. Stores are even offering to ameliorate the global problems of waste and - interestingly - overconsumption. Last year, upscale Swedish clothing brand Filippa K opened a secondhand store in Stockholm that sells used clothes of its own brand for at least 50% off.

Anders Wiberg, who oversees the boutique and is the brand's supply-chain director, says the boutique has boosted sales of the current collections. "The customer looks at us as taking more action," he says.

If for one reason or another, you’d slept through the past five years, only to find yourself suddenly awake in 2010, you’d quickly realise the world of advertising and marketing has fundamentally changed in three major ways. First, subconscious or subliminal communication (and research) has become part of the vocabulary of most marketers. Second, power has shifted from brand owners to consumers - even the most powerful brands know that successful campaigns have to systematically engage consumers, who will in turn use their mighty word of mouth to spread the messages opposed to relying on big media budgets do the work. Third, 2010 is shaping up to be dominated by guilt. Guilt for spending money in the midst of a debilitating global recession, guilt for polluting the world, and finally, parental guilt, as kids increasingly engage in their own online world, far removed from traditional values that were previously the exclusive domain of the family.

So what does this mean for a marketer in 2010? Don’t fall into the trap of believing that conventional research will do the trick. More than 80% of all the decisions we make every day are decided upon in our non-conscious part of the brain. Now if we can trust these numbers, and every study indicates that we can, then 2010 will be the year where marketers will be forced to investigate alternative research methodologies that tap into the subconscious processes involved in decision making.

2010 will also be the year where marketeers will have to surrender their brand to the consumer. What do I mean by that? We increasingly witness how brands can be seriously damaged by consumers who choose to vent their frustration or anger online. Witness how Dominos Pizza’s share price dropped by a massive 10% in just one day after a negative video clip posted on YouTube. How can a large organisation, which can rarely turn anything around in a matter of hours, handle such an attack? Yet, in order to stay abreast of the way things now work, brands are required to find the capacity to do just that.

And finally, this will be the year when marketers will play the guilt card in ways we’ve never seen before. This is the sad reality. Buyology taught us that fear probably is one of the most powerful drivers when building a brand. Fear has a very close association with guilt, and as the world spins faster on its axis, guilt becomes a major by-product. Brands that are able to elicit guilt - or even better, remove guilt - will be the winners. I already feel guilty writing this!

By Martin Lindstrom

Publication Date: 4th of January, 2009

"Make it bigger," the executive suggested as I scrambled to sign off on an ad on behalf of a major fashion brand. I wasn't the slightest bit surprised. For as long as I can remember, the size and placement of a product's logo has been the holiest grail of branding.

But considering that by retirement age the average American has watched roughly 2 million TV commercials (and no doubt been exposed to an equivalent number of billboard ads), has the logo overstayed its welcome? In a multimillion-dollar global neuro-marketing study dubbed Project Buyology, I decided to peer inside consumers' brains to find out.

Over the years I've been perplexed by the fact that despite worldwide tobacco-advertising bans and astronomical government investment in anti-smoking initiatives, global consumers continue to inhale 5,765 billion cigarettes a year--and that's not even including the huge duty-free or international black market trades.

The World Bank projects that the number of tobacco users is only going to shoot up further--from a current level of 1.4 billion smokers to roughly 1.6 billion by 2025. Four-year-old kids know about the health dangers of smoking; so why, pray tell, do brands like Marlboro and Camel still rank as among the most powerful in the world?

If experts generally agree that 85% of everything we do takes place in our subconscious minds, it seemed only fitting to target the human brain. Project Buyology, the largest project of its kind, enlisted roughly 2,000 volunteers worldwide, who agreed to submit themselves to functional magnetic resonance imaging (fMRI), a type of brain scan, while viewing various cigarette-marketing related imagery.

Over the years, I've turned down numerous entreaties from tobacco companies to work for their cause (if you want to call killing people a cause). For ethical reasons, I've always said no. But that hasn't kept me from distantly--and, admittedly, perversely--admiring these companies' tricks and strategies.

My question was this: Can the desire to smoke be triggered by images merely associated with a brand: images of a camel, a windswept desert, a rugged-looking cowboy or Marlboro's well-known sponsorship of the European Formula One racing circuit, which has forged an inextricable link between smoking and the company's bright red Ferraris? Do smokers even need to process the logos "Marlboro" or "Camel" for the craving spots in their brains to become activated?

Over a two-month period, Project Buyology exposed both social and long-time smokers, as well as non-smokers, to a raft of suggestive images as the fMRI painstakingly scanned their brains.

First, both groups were shown subliminal images that had no overt connection to cigarette brands--those he-man cowboys, sunsets, camels and deserts. Next, they were shown explicit cigarette advertising images including the Marlboro Man and Joe Camel hunched over his motorcycle, as well as the Marlboro and Camel logos. Our goal was to determine if the subliminal images would generate similar cravings to those generated both by the logos and by the clearly marked Marlboro and Camel packs.

Not surprisingly, as they viewed the actual cigarette packs, the MRI scans revealed a pronounced response in our smokers' nucleus accumbens, a small region in the brain associated with reward, craving and addiction. Far more intriguing was that when the smokers were briefly exposed to the subliminal imagery, their nucleus accumbens lit up even more pronouncedly in the same regions they had when they viewed the explicit images of the packs and logos.

In other words, the iconic imagery merely associated with Camels and Marlboros, such as the Ferrari and the Western sunset, brought on a higher craving activation than either the logos or the actual pictures on the cigarette packs themselves.

But wait a second--why? Well, whether it's due to brand boredom, increased media sophistication or consumers' by-now cast-iron defense mechanisms, when we're exposed to logos, our guards go up. We know we're being manipulated, and we'll do anything in our power to prevent that logo from winning.

So in practical terms, what does our research experiment portend? Think about this: Nearly a century ago, when the first-ever Coca-Cola bottle was in the planning stages, the designer received his marching orders. Company executives wanted him to develop a bottle so distinctive that if you smashed it against a wall, you'd still be able to recognize the pieces as part of a Coke bottle. The designer did what he was told, and to this day it works.

For obvious reasons, I call this philosophy "Smash Your Brand." Even back in 1915, Coke's aim was to replace its logo with a "smashable" component. Today, "smashable" could mean anything from a color, a shape, a sound, a fragrance, a design or any other indirect signal that tells a subtle, suggestive and logo-free story.

See that new iPod Touch over there? Where, on its front, is the word "Apple" spelled out? Nowhere. Did you happen to catch Disney's Pixar's latest flick, Wall-E? Did the white, gleaming female robot heroine put you in mind of anything in particular (such as any one of several Apple products)? That familiar sloping roof, that robin's-egg-blue box--are you thinking, as I am, of McDonald's and Tiffany?

Instead of flashing another logo, or bringing out yet another forgettable movie product placement--all of which will only induce consumers to respond defensively and critically--in the future the simple power of suggestion will entice customers to accompany advertisers on a journey, at the same time engaging their subconscious minds.

No, the logo isn't dead yet, but it's on life support. My prediction? That the battle for consumer loyalty and cash will no longer take place in our conscious minds. The ultimate decision-making process of whether we buy something will happen at the deepest levels in the human brain. Until recently, these places were out of reach. But thanks to the unlikely pairing of neuroscience and marketing, we're beginning to understand the secrets of our own human Buyology.

By Martin Lindstrom

Publication Date: 30th of Novemeber, 2008

What really goes on in our minds when we face the decision to buy something? That’s what I and a team of researchers tried to find out by studying the brains of shoppers around the world as they encountered various products, ads, and sales. Knowing the science behind what influences us to make purchases—whether they’re needed or not—can help us resist temptation. Here are five tips to help you make it through your shopping experience without breaking the bank.

Leave the Kids At Home

Consumers accompanied by children bought 40% more items than consumers who were shopping by themselves. Children, bless their little hearts, tend to use a variety of techniques to coax their parents into buying more stuff. These can range from negotiation (“I’ll clean up my room if you buy me those Lucky Charms”) to threats (screaming, crying, having a tantrum in the middle of the store) to sneaking the things they want underneath your other purchases. When you finally get to the cash register, chances are good that you’ll be too embarrassed—or worried about coming across as mean or cheap—to say anything.

Watch Out for Fake Bargains

The way signs and words are used can have a powerful effect on our brains. Take one store’s display of canned chicken-noodle soup. A sign above it read “$1.95 per can.” Customers pushed right past the pyramid of cans because $1.95 sounded like way too much money for chicken-noodle anything. The next day, a new sign left off the price and said, “Maximum 8 cans per customer.” The result: customers waiting in line. Another example: You pass by a box of spaghetti marked $2.50. A few days later, the same box features a sign reading “2 for $5.” You don’t consider that it’s the same price. You’re too busy snatching up as many boxes as you can.

Both of these “bargains” stimulate our natural hoarding instinct. A small region in the prefrontal cortex of our brains is associated with collecting. Scientists believe that it reacts as it did earlier in our evolution, when food supplies may have been scarce. In other words, we’re hardwired to respond to shortages by doing all we can to ensure our survival. The result? A lot of soup and a lot of pasta.

Avoid Big Carts

Strange but true: People buy roughly 30% more items when they shop with a big cart than when they don’t. And the bigger the cart we’re wheeling around the store, the more likely we are to stock it full of stuff we probably don’t need.

What’s the reason for this phenomenon? I believe consumers become self-conscious if their big shopping cart contains, say, only a celebrity magazine and a few sticks of gum. It’s as though we expect other shoppers to look down on us or even make a disparaging comment. Another thing: If our cart is enormous, the dopamine levels in our brain increase, and we begin pulling things down from the shelf to fill up every square inch. Dopamine is one of the most addictive chemicals our brain produces. It increases in anticipation of any kind of reward, and that includes food and clothing.

My suggestion: Avoid a shopping cart altogether and use a small basket with handles.

Don’t Sniff!

Ever wonder why more and more supermarkets are installing bakeries, rotisserie-chicken grills, salad bars, and snack-food outposts so near their entrances? It’s because smells can entice us into buying food even if we don’t really want it (and especially if we’re shopping on an empty stomach).

Smell is our most primal human sense. When we sniff something, the odor receptors in our noses make a beeline to our limbic system, which governs our emotions, memories, and sense of well-being. The fragrance of just-baked bread, for example, not only gives off a signal of freshness, it also evokes powerful feelings of comfort and domesticity. Supermarkets know that when the aroma of baking bread or doughnuts hits your nose, you’ll get hungry and start picking up food you had no intention of buying. (Not just bread, butter, and jam, either, but all kinds of produce.) Our gut response is instantaneous, meaning we don’t stand a chance. So bulk up before you go out.

Beware Of Shopaholism

Leave your credit cards at home when you shop. Using a debit card is OK, since it draws money directly from your checking or savings account. But when we slap down a credit card, we often feel as though we have unlimited funds at our disposal. That is, until the monthly statement shows up.

There are roughly 17 million “shopaholics” in the United States—people addicted to the feelings of reward, pleasure, and well-being that the brain chemical dopamine produces.

The average American household has accumulated about $10,000 in credit-card debt. As most consumers know, it can take years and a whole lot of self-discipline to dig yourself out of this hole. Don’t get into one if you can help it.

By Martin Lindstrom

Published Date: December 11, 2008

TEN years ago, in settling the largest civil lawsuit in American history, Big Tobacco agreed to pay the 50 states $246 billion, which they’ve used in part to finance efforts to prevent smoking. The percentage of American adults who smoke has fallen since then to just over 20 percent from nearly 30 percent, but smoking is still the No. 1 preventable cause of death in the United States, and smoking-related health care costs more than $167 billion a year.

To reduce this cost, the incoming Obama administration should abandon one antismoking strategy that isn’t working.

A key component of the Food and Drug Administration’s approach to smoking prevention is to warn about health dangers: Smoking causes fatal lung cancer; smoking causes emphysema; smoking while pregnant causes birth defects. Compared with warnings issued by other nations, these statements are low-key. From Canada to Thailand, Australia to Brazil, warnings on cigarette packs include vivid images of lung tumors, limbs turned gangrenous by peripheral vascular disease and open sores and deteriorating teeth caused by mouth and throat cancers. In October, Britain became the first European country to require similar gruesome images on packaging.

But such warnings don’t work. Worldwide, people continue to inhale 5.7 trillion cigarettes annually — a figure that doesn’t even take into account duty-free or black-market cigarettes. According to World Bank projections, the number of smokers is expected to reach 1.6 billion by 2025, from the current 1.3 billion.

A brain-imaging experiment I conducted in 2006 explains why antismoking scare tactics have been so futile. I examined people’s brain activity as they reacted to cigarette warning labels by using functional magnetic resonance imaging, a scanning technique that can show how much oxygen and glucose a particular area of the brain uses while it works, allowing us to observe which specific regions are active at any given time.

We tested 32 people (from Britain, China, Germany, Japan and the United States), some of whom were social smokers and some of whom were two-pack-a-day addicts. Most of these subjects reported that cigarette warning labels reduced their craving for a cigarette, but their brains told us a different story.

Each subject lay in the scanner for about an hour while we projected on a small screen a series of cigarette package labels from various countries — including statements like “smoking kills” and “smoking causes fatal lung cancers.” We found that the warnings prompted no blood flow to the amygdala, the part of the brain that registers alarm, or to the part of the cortex that would be involved in any effort to register disapproval.

To the contrary, the warning labels backfired: they stimulated the nucleus accumbens, sometimes called the “craving spot,” which lights up on f.M.R.I. whenever a person craves something, whether it’s alcohol, drugs, tobacco or gambling.

Further investigation is needed, but our study has already revealed an unintended consequence of antismoking health warnings. They appear to work mainly as a marketing tool to keep smokers smoking.

Barack Obama has said he’s been using nicotine gum to fight his own cigarette habit. His new administration can help other smokers quit, too, by eliminating the government scare tactics that only increase people’s craving.

By Martin Lindstorm

Published Date: 21st of November 2008

"Make it bigger," the executive suggested as I scrambled to sign off on an ad on behalf of a major fashion brand. I wasn't the slightest bit surprised. For as long as I can remember, the size and placement of a product's logo has been the holiest grail of branding.

But considering that by retirement age the average American has watched roughly 2 million TV commercials (and no doubt been exposed to an equivalent number of billboard ads), has the logo overstayed its welcome? In a multimillion-dollar global neuro-marketing study dubbed Project Buyology, I decided to peer inside consumers' brains to find out.Over the years I've been perplexed by the fact that despite worldwide tobacco-advertising bans and astronomical government investment in anti-smoking initiatives, global consumers continue to inhale 5,765 billion cigarettes a year--and that's not even including the huge duty-free or international black market trades.

The World Bank projects that the number of tobacco users is only going to shoot up further--from a current level of 1.4 billion smokers to roughly 1.6 billion by 2025. Four-year-old kids know about the health dangers of smoking; so why, pray tell, do brands like Marlboro and Camel still rank as among the most powerful in the world?

If experts generally agree that 85% of everything we do takes place in our subconscious minds, it seemed only fitting to target the human brain. Project Buyology, the largest project of its kind, enlisted roughly 2,000 volunteers worldwide, who agreed to submit themselves to functional magnetic resonance imaging (fMRI), a type of brain scan, while viewing various cigarette-marketing related imagery. Over the years, I've turned down numerous entreaties from tobacco companies to work for their cause (if you want to call killing people a cause). For ethical reasons, I've always said no. But that hasn't kept me from distantly--and, admittedly, perversely--admiring these companies' tricks and strategies.

My question was this: Can the desire to smoke be triggered by images merely associated with a brand: images of a camel, a windswept desert, a rugged-looking cowboy or Marlboro's well-known sponsorship of the European Formula One racing circuit, which has forged an inextricable link between smoking and the company's bright red Ferraris? Do smokers even need to process the logos "Marlboro" or "Camel" for the craving spots in their brains to become activated?