August 21, 2012 in Business

Study of shopping habits shows little math involved

Melissa Caceres McClatchy-Tribune
 

Julie Potashnick looks for deals while shopping. Studies show that bargain hunters are more attracted to items offering a “free” option, such as buy one get one free, rather than other sales which may offer better pricing.
(Full-size photo)

FORT LAUDERDALE, Fla. – Poor math skills are leading to bad shopping decisions, according to a recent study by the University of Miami School of Business.

Researchers examined attitudes about discounts, sales and bargain shopping. After surveying about 600 shoppers in retail stores and malls, they learned shoppers:

• Are attracted to “extra” or “bonus” items. “Shoppers often, and incorrectly, assume that the more of the product there is, the better,” said Michael Tsiros, a marketing professor at UM who led the two-year study.

Two-for-one deals, or packages with an extra sample or larger volume, don’t always involve big savings. But shoppers tend to ignore base prices, and automatically pick the larger package when given a choice between a discount or more product.

“Even though the promotions may be economically equivalent, more people were taking advantage of the bonus packs,” said Tsiros.

• Think that a 33 percent discount is the same as getting 33 percent more of a product for the same price. In a test that involved loose coffee beans, many shoppers saw the two choices, 33 percent extra for the original price or 33 percent off the original price, as equal.

Enrique Villamor, professor of mathematics at Florida International University, isn’t surprised that consumers couldn’t tell that the discounted choice was a better deal.

He says many fail to connect basic math knowledge to real-world situations like shopping.

“Many of these kinds of calculations can be done in your head,” said Villamor. “People don’t seem to apply the critical skills needed in that situation, which is very similar to a word problem.”

But not everyone has the time to solve math puzzles while shopping.

As the caretaker of her elderly parents in Fort Lauderdale, Julie Potashnick says she is always on the lookout for bargains at the grocery store but doesn’t spend her time comparison shopping at other locations or making price calculations.

“I usually walk around the front of the store where the ‘two for one’ deals are and just grab the things that I need,” said Potashnick.

The need to take advantage of the bargain at that moment usually means customers’ decisions are not always going to be the most rational ones, said John Fleming, director of communications from the Florida Retail Federation.

“If you look at the unit price and take some extra time to do the math,” said Fleming, “you’d be able to see the difference.”

• Will select the better bargain when the math is easier. Researchers found that when prices were easier to compare, like 50 percent extra product or 50 percent off the regular price, consumers will pick the better bargain.

They also found that bonus packs lose their appeal when it comes to cheaper or unfamiliar brands.

Hannah Allison, of Hollywood, Fla., says she is only attracted to bonus packs for pricey products.

“It may be more expensive but I know I’m buying something of quality and will work for me,” said Allison.

“I wouldn’t go with something that had a certain percentage more if it was just a generic brand.”

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