Koert van Ittersum, associate professor of marketing, published the study in the prestigious Journal of Marketing.
Published on:03-01-2010During economic downturns, staying within budget at the grocery store may be more important than ever for many shoppers, especially those with low incomes. But a new study shows that the harder shoppers try to accurately calculate the total value of items placed in their carts, the worse they do.
Koert van Ittersum, associate professor of marketing at Georgia Tech College of Management, hit two supermarkets after the Dow Jones hit its lowest point in February 2009, interviewing 300 shoppers about their strategies for staying within budget at the grocery store.
Out of the 85 percent of shoppers who at least sometimes try to keep track of how much they're spending, 60 percent attempt to calculate it totally in their head, without using calculators or shopping lists. And most end up underestimating the total cost, putting them at risk of spending more than they planned, found van Ittersum and his research collaborators, Joost M.E. Pennings of Maastricht University and Brian Wansink of Cornell University.
Their study, titled "Trying Hard and Doing Worse: How Grocery Shoppers Track In-store Spending," appears in the March issue of the Journal of Marketing.
"It is well-known that mental computation is very difficult," van Ittersum says. "Just adding two three-digit numbers is complex; let alone adding the prices of 20 different products. We were fascinated to see that even among shoppers who basically cannot afford to overspend on groceries, the majority indicates that they try to keep a mental tally going."
Grocery stores are chaotic environments, where shoppers can easily get distracted by neighbors or special offers, making it easy to lose track of the total, van Ittersum says. The shoppers who do best at keeping track without calculators are those who employ short-cut strategies for making calculations, found the researchers.
As a general rule, the researchers recommend that shoppers round prices with cents amounts larger than $0.50 up (e.g. $1.89 to 2) and round down otherwise (e.g. $1.29 to $1). If you get distracted from your calculations, eyeball the number of items in your basket and multiply the total by the estimated average price of all the items (e.g. 15 items x $3=$45), they suggest.
"These short cuts may not be perfect, but they tend to be more accurate trying to calculate down to the last penny," van Ittersum says.
The shoppers who are most motivated to be accurate – those on tight budgets – may be at the most risk for spending more than their budget, he adds. That's because it is simply too demanding to mentally calculate the exact total.
Shoppers' success at effectively monitoring their spending has serious implications for retailers, note the study's researchers. "When shoppers must pay more than they expected, they tend to hold the retailers responsible and feel dissatisfied with the store," they write. "But when they pay less than expected, they attribute the benefit primarily to themselves and their store satisfaction remains neutral."
To improve customer satisfaction, retailers could help customers become more accurate estimators by informing them about effective computation strategies, the researchers suggest. "Retailers could also invest in the growing array of technical solutions that enable shoppers to track in-store spending accurately, including shopping cart scanners," van Ittersum says. "Shoppers could help themselves by sticking to shopping lists and using calculators."
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